The Belt and Road Initiative Promises Huge Cooperation Space for China and Vietnam

Interview with Chinese Ambassador to Vietnam Hong Xiaoyong

Emb Hong

By staff reporter ZHANG HUI

AS close neighbors, the friendship between China and Vietnam goes back to ancient times. And as socialist countries under the leadership of their respective communist parties, China and Vietnam are both in the process of deepening reforms. In the midst of their discrete national independence campaigns and progressing socialist construction, the two countries have extended helping hands to each other, thus consolidating their bond of friendship.

In November 2015, Chinese President Xi Jinping made a state visit to Vietnam on the occasion of the 65th anniversary of the establishment of the two countries’ diplomatic relations. Early this year, after re-election as General Secretary of the Communist Party of Vietnam (CPV), Nguyen Phu Trong made his first visit to China. The frequent top-level state visits between the two countries underline the importance their state leaders attach to the bilateral relations. The two leaders have also expressed their mutual intent to advance the China-Vietnam comprehensive strategic partnership of cooperation towards sustained, healthy, and stable development. The two sides are committed also to linking the Belt and Road Initiative with Vietnam’s “Two Corridors and One Economic Circle” plan, so to promote connectivity and encourage and promote bilateral investment and economic cooperation.

People in both Vietnam and China are eagerly anticipating the upcoming Belt and Road Forum for International Cooperation. But there may still be some who hold a wait-and-see attitude towards the initiative, or who harbor doubts about it. How, then, is China-Vietnam economic and trade cooperation progressing? And what benefits can the Belt and Road Initiative bring to Vietnam? With these questions in mind, reporters from China Today, China Report, People’s China and china.com.cn, which are all members of China International Publishing Group (CIPG), jointly interviewed Chinese Ambassador to Vietnam Hong Xiaoyong.

CIPG: What progress is apparent in China-Vietnam economic and trade exchanges?

Ambassador Hong: Economic and trade cooperation is an important part of bilateral relations. China has been Vietnam’s biggest trade partner for 13 consecutive years. And last year, Vietnam surpassed Malaysia to become China’s biggest trade partner in the ASEAN region, with a bilateral trade volume topping US $98.2 billion. Throughout long-term trade exchanges, Vietnam has been vexed by trade imbalances, in view of China’s sizable trade surplus in this respect. Over the past two years, however, the problem has eased. Last year saw a 20 percent growth in Vietnam’s exports to China, while there has been a declining trend in China’s exports to Vietnam. In the first quarter of 2017, Vietnam’s exports to China increased a further 40 percent. The bilateral trade structure is thus becoming more balanced.

Investment is another important facet of bilateral economic and trade cooperation. China long held a ninth or tenth ranking among all investors in Vietnam. But with the progress in bilateral ties towards more stable development, last year saw an impressive increase in China’s investment in Vietnam that took it to the eighth rank. This momentum increased in the first quarter of this year, bringing China to the second position in terms of investment increment among 38 countries and regions that have invested in Vietnam. As an important link between the two countries, economic and trade cooperation has greatly promoted bilateral relations.

The trade imbalance between the two countries is actually a temporary problem, attributable to the market and to their different stages of development. Vietnam is now greatly advancing its industrialization and strengthening its manufacturing sector. However, as spare parts and accessories cannot be produced locally, Vietnam needs to import them from China. Mobile phone accessories are an example. Garment manufacturing is another. Vietnam now has many garment factories, but still needs to import fabrics and printed and dyed textiles from China. But Vietnam also exports locally produced clothes to other countries, which generates foreign currency. China mainly imports minerals, agricultural produce, and industrial raw materials from Vietnam.

CIPG: It’s often said that economic complementarity exists between China and Vietnam. How do the two countries complement each other economically?

Ambassador Hong: This economic complementarity hinges on the two countries’ different stages of development, and on the structure of their production factors. As China’s reforms to its economic structure deepen, more surplus production capacity becomes available for overseas transfers. Vietnam is an ideal destination. China possesses abundant capital, advanced technology and equipment, and good management expertise, all of which Vietnam urgently needs for its social and economic development. On the other hand, Vietnam’s advantageous demographic dividends, high-quality work force, huge market potential, and demand for improved infrastructure, as well as its rapidly developing economy, all imply huge scope for China-Vietnam cooperation. This is why we believe high economic complementarity exists between the two countries.

CIPG: Since China proposed the Belt and Road Initiative, how have the two countries aligned their development strategies? What are the highlights of bilateral cooperation?

Ambassador Hong: Since being put forward in 2013, the Belt and Road Initiative has had a wide response from the international community, so has naturally attracted Vietnam’s attention. In November 2015, President Xi Jinping paid a state visit to Vietnam, and early this year, General Secretary of the Communist Party of Vietnam Nguyen Phu Trong visited China. During these top-level meetings the two countries confirmed they would align the Belt and Road Initiative with Vietnam’s “Two Corridors and One Economic Circle” plan. The relevant departments are now negotiating the documents specific to the alignment. The two countries have also signed a memorandum on production capacity cooperation. This highlights the clear intention of the two governments to cooperate. As to specific cooperation projects, major headway and impressive achievements have been made as regards transportation, electricity, the manufacturing sector, and construction of industrial parks.

A Chinese company (China Railway Sixth Group) is now constructing Vietnam’s first urban light rail, notable for its Chinese technology, capital, equipment, and standards.

As to electricity, since commencement of its reform and opening-up Vietnam has relied on China in this regard. Formerly buying electricity from China, the country now invites Chinese companies to build its power plants. The representative project is the Vinh Tan 1 Power Plant, constructed by the China Southern Power Grid, involving an investment of US $1.8 billion. Upon completion, this project will considerably alleviate electricity shortages in South Vietnam. The project has gained commendation and awards from the local government due to its high standards, strict observance of local laws, and integration with the local community.

In the manufacturing sector, the Chinese private company Texhong Textile Group Limited, which set up a branch in Vietnam more than 10 years ago, is prospering, and has achieved effective localization. Apart from a few managerial staff members, the workforce consists entirely of local residents. Its factory in Bac Ninh Province is one of the biggest taxpayers in the region, and has provided jobs for more than 7,000 local residents.

As regards construction of industrial parks, the Long Jiang Industrial Park in South Vietnam’s Tien Giang Province, mainly invested by Chinese private companies, has basically taken shape. Covering 54 hectares, it so far seats around 36 companies. Industrial parks are integral to promoting local employment and strengthening bilateral ties. Apart from attracting construction investment, they also draw companies to set up shops there, so boosting foreign investment and generating revenues for the country. Construction of the China-Vietnam (Shenzhen-Haiphong) Economic and Trade Zone is now in progress. Upon completion, it will achieve an estimated annual output worth around US $1 billion.

CIPG: With regard to the Belt and Road Initiative and the “Two Corridors and One Economic Circle” alignment, which problems still exist that need to be urgently addressed? What other sectors also have the potential for cooperation?

Ambassador Hong: At the macro level, the two sides need to map out a cooperation blueprint. The specific document necessary for the two sides to realize strategic alignment must be drafted after negotiation, and will play a guiding role in future cooperation. China and Vietnam share a 1,500 km-long boundary, and Vietnam’s seven provinces border China’s Guangxi Zhuang Autonomous Region and Yunnan Province. To boost border economy, the two sides are advancing the construction of cross-border economic cooperation zones instrumental to promoting bilateral connectivity. Therefore, we need to accelerate the relevant negotiations and document-drafting process. China and Vietnam have already achieved close cooperation. There are 1,500 or more registered Chinese companies in Vietnam, but they inevitably encounter problems. When dealing with them, it is imperative to adhere to the principle of mutual understanding and mutual accommodation, so to advance cooperation.

At present our two countries mainly cooperate in such fields as infrastructure construction, electricity, and manufacturing. After the macro blueprint has been introduced, many areas, such as the service sector involving telecom, e-commerce, logistics and finance, may realize their potential for cooperation.

CIPG: How have people of various walks of life in Vietnam responded to the Belt and Road Initiative? What benefits will bilateral cooperation under the Belt and Road framework bring to local communities?

Ambassador Hong: The Vietnamese government has shown support for the initiative, and expressed willingness to participate actively in it. Some people, however, have qualms, misgivings, and doubts about the initiative, and are still discussing what benefits it might bring. Consequently they look forward to the Belt and Road Forum for International Cooperation. Vietnamese President Tran Dai Quang will attend the forum, and this will help these doubters understand the tenet of the initiative and the China-advocated principle of achieving shared growth through discussion and collaboration. The forum will show them that aligning Vietnam’s development plan with the initiative, and their active participation in it, will bring more, and much-needed benefits, such as improving Vietnam’s development level, boosting employment, and improving its infrastructure.

The Vietnamese economy is export-oriented. Therefore, integrating with the world will advance the country’s development. China is ahead of Vietnam in this regard, due to having earlier taken the road of reform and opening-up. Many people in Vietnam believe their country can learn much from China’s experience. Its close cooperation with China in such fields as manufacturing, agriculture, electricity and infrastructure is bound to raise the country’s development to a new level.

CIPG: Cultural and people-to-people exchanges have played an important role in lubricating and facilitating bilateral ties. How are bilateral exchanges in this regard?

Ambassador Hong: The Chinese and Vietnamese cultures are inextricably linked due to Confucianism, which has historically wielded indelible influence on both. Vietnamese traditional festivals also closely correlate with Chinese ones. For example, Spring Festival is the most important holiday in both countries. Our peoples thus feel an affinity with each other’s cultures. The four classic novels of Chinese literature are also widely read in Vietnam. Many Vietnamese people can cite specific scenes from these masterpieces. Since the 1980s, TV dramas based on these works of Chinese literature have been hugely popular in Vietnam. Shortly after the death of Yang Jie, director of the TV drama The Journey to the West, Vietnamese websites were inundated with posts mourning her passing.

The two governments have always attached great importance to bilateral cultural exchanges, and approved the setting-up of cultural centers in each other’s territory, so facilitating exchanges. TV dramas popular in China can now also be seen synchronously on Vietnam’s TV channels.

Education is also a vital aspect of bilateral exchanges. The number of Vietnamese students in China remains at around 10,000 throughout various disciplines. There are also thousands of Chinese students in Vietnam. And educational exchanges have helped to cultivate many of Vietnam’s outstanding talents. For example, Do Thi Thanh Ho, a Vietnamese student studying in Guangxi Arts University, attained the title of champion of the month in the CCTV entertainment program Avenue of Stars, and has since become a popular singer in Vietnam.

More and more students in Vietnam are studying Chinese. Financed by scholarships from Chinese universities, many Vietnamese students go to China every year to study Chinese language. Meanwhile, we also offer support for Chinese education in Vietnam’s colleges. A Confucius institute has indeed been set up in Hanoi University. Moreover, in cooperation with the Confucius Institute Headquarters, we have held the Chinese Bridge Chinese Proficiency Competition for Foreign College Students in Vietnam. This has added fire to local students’ passion for learning Chinese, and expanded the influence of Chinese culture.

CIPG: What do you think about the role of China-Vietnam cooperation under the framework of the Belt and Road Initiative in promoting China’s relationship with ASEAN?

Ambassador Hong: China’s relationship with ASEAN is an important part of its neighborhood diplomacy. ASEAN is also an important partner for China’s international cooperation along the 21st Century Maritime Silk Road. Vietnam is located in central East Asia, bordering China. So China’s cooperation with Vietnam under the Belt and Road Initiative framework will be conducive to building consensus on the initiative among ASEAN member countries and expanding cooperation with them. Vietnam’s economy is on the fast track, and its position in ASEAN will inevitably continue to rise.

Moreover, the alignment between Vietnam’s “Two Corridors and One Economic Circle” plan and the Belt and Road Initiative will set a perfect example for other ASEAN countries. As Vietnam is the only country in ASEAN with land and sea borders with China, it acts as a bridge connecting China and ASEAN.

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