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Ralph Jennings

What do durians, lobsters and snow have in common?
They are all delivering economic dividends during an upbeat year for China’s ties with Vietnam.
Off and on since the 1970s, ships from the two nations have faced off in disputed parts of the South China Sea, sparking occasional mishaps and strongly worded diplomatic declamations.
But this year, as people on the ground tell it, each side found the other’s economy too influential to ignore.
“The Chinese government has kept an open attitude,” said Ding Wei, chairman of the China Business Association’s branch in Ho Chi Minh City, Vietnam’s main financial centre.
“It’s willing to invest in Vietnam and wants to have economic ties with Vietnam.”
Stronger economic ties have borne fruit this year in high-level dialogue, brisker trade and new direct investments in factories and infrastructure.
Two-way trade swelled to US$212.9 billion in the first 10 months of this year, according to Chinese customs data, up from US$183.9 billion over the same period last year.
Vietnam shipped US$2.78 billion worth of durians to China in the first 10 months of this year, a year-on-year increase of 42.6 per cent, according to Chinese customs data.
In October it surpassed Thailand to become the largest supplier of the pungent, spiky fruits, which can sell for US$25 apiece in Chinese supermarkets, the data shows.

Over the first three quarters of the year, the value of Vietnamese lobsters exported to China shot up by 3,285 per cent. Beijing cancelled import restrictions last year.
Growth in trade has increased the urgency of better connecting Chinese and Vietnamese railways for goods train use, said Carl Thayer, a veteran Southeast Asia-watcher who is now an emeritus professor at the University of New South Wales in Australia.
Two railway lines from the Chinese border to cities in central Vietnam will have the spacing between their tracks increased to 1.43 metres (4.7 feet), consistent with the Chinese standard, the Yicai Global news website in China reported in August. China and Vietnam are “joining forces” to do the work, it said.
China State Construction Engineering would separately participate in a US$67 billion high-speed railway project that will run from Hanoi, Vietnam’s capital, to Ho Chi Minh City, according to the country’s Association of Foreign Invested Enterprises.
The high-speed railway project could eventually link up with the Kunming-Bangkok-Singapore rail system that will run from China to the tip of continental Southeast Asia, Thayer said.
China has made a name for itself in completing technically advanced railway projects and other infrastructure work, including projects in many other parts of Asia.
Trains are moving more tourists as well as freight this year.




In the first half of the year, China ranked as Vietnam’s second-biggest source of tourists after South Korea with 1.8 million arrivals, up from 557,000 in the first half of last year, according to the Viet Nam National Authority of Tourism.
The first charter train from China to cross the border at Lao Cai recently brought tourists to Vietnam, the Viet Nam News reported in November.
Chinese tourists are fans of Vietnam’s long coastline, while Vietnamese may head the other way to see snow, which seldom falls in their home country, said Phuong Nguyen, communications manager of the 23-property Fusion Hotel Group in Vietnam.
She said travel agencies and internet influencers have helped increase Vietnamese tourists’ interest in China this year.
People travelling from Vietnam accounted for 4 per cent of the arrivals processed in China last year, according to market research firm Statista.
Economic relations between the two communist countries have long waxed and waned. They wax when leaders from each side see the benefits piling up on the other despite lingering territorial disputes, said Jack Nguyen, CEO of the professional services firm InCorp.
A landmark example was their 2007 agreement to explore jointly for oil and natural gas in the Gulf of Tonkin – known in China as the Beibu Gulf – which lies off their coasts in the northwestern part of the South China Sea.
The two countries’ top leaders met in December last year and again in August to discuss, among other topics, transport connectivity.

“[Vietnam] needs to keep good relations with China,” Nguyen said. “This goes back a thousand years. Economically, Vietnam buys a lot from China.”
China’s considerable imprint on Vietnam’s manufacturing sector has grown over the past five years or so, adding a major new source of investment to a Southeast Asian economy that is largely dependent on infusions of foreign capital.
Investment in Vietnam from China in the first seven months of this year amounted to US$1.97 billion, a Ministry of Commerce spokesman said in Beijing in October, adding that the figure reflected “rather fast growth”.
While many of those investors operate factories, some work in tourism or packing and logistics for China-bound durian shipments, Ding said.
In Beijing, officials want more railway connectivity throughout Southeast Asia to help extend their economic influence, Thayer said.
China’s involvement in the high-speed railway project running from northern to southern Vietnam will “extend China’s connectivity” from Ho Chi Minh City to Cambodia and Thailand, Thayer said.
Zha Daojiong, an international studies professor at Peking University, said “attainable cooperation in the land spaces” helps relieve pressure from the two countries’ maritime disputes.
Now it’s like ‘let’s get down to business’ and that’s just really recent and that’s good
Frederick Burke, Hong Kong Business Association in Vietnam
“So, the two sides have found a way to practice competitive cooperation: not relenting on issues of principle over maritime space but a focus on feasible cooperation on land,” Zha said.
Vietnam was particularly ready for engagement with China this year after overcoming two political hurdles, some analysts in Ho Chi Minh City said.
The ruling Communist Party of Vietnam’s Central Committee picked a new general secretary, To Lam, in August after the death of his predecessor, while a knotty, high-level anti-corruption drive also wound down this year.
“Now it’s like ‘let’s get down to business’ and that’s just really recent and that’s good,” said Frederick Burke, the Ho Chi Minh City-based vice-chairman of the Hong Kong Business Association in Vietnam. “I feel like people are ready and it’s been too long.”
Nguyen said Chinese companies are searching for places to grow as their domestic economy is stuck in the doldrums and storm clouds loom on the horizon.
Vietnam’s location on China’s border and the fact it is free from punitive US tariffs on Chinese imports means that a Chinese company can move production without having to worry about any extra duties on US-bound shipments.
The Vietnamese economy is expected to grow faster than China’s this year, according to the Asian Development Bank. Vietnamese Prime Minister Pham Minh Chinh said on December 1 that his government will push for 8 per cent growth next year, Vietnam’s Tuoi Tre News reported.


Vietnam’s middle class is growing within the total population of about 100 million, business consultancy Dezan Shira & Associates said in a November briefing. That expansion represents a market for Chinese vendors.
Signage for Chinese consumer electronics brands such as TCL and Xiaomi speckles the streets of central Ho Chi Minh City, and a Haidilao hotpot restaurant, another emblematic Chinese brand, operates in their midst.
Increases in Vietnamese people’s spending power over the next five to 20 years will attract expansion-minded Chinese vendors, Ding from the China Business Association said.
“More and more Chinese enterprises will be here,” he said. “When they get to a certain level, they’ll want to go outside to expand.”
Two-way e-commerce has grown so fast that the Vietnamese Ministry of Industry and Trade demanded this year that Chinese budget-shopping platforms Shein and Temu register their businesses in the country.
They have now suspended operations in Vietnam as they await approval from authorities to restart their local services.
Vietnam’s Ministry of Industry and Trade ordered Temu, owned by Chinese e-commerce giant PDD Holdings, to halt its business after the platform failed to complete the required business registration process by the November 30 deadline, VietnamNet Global reported on Thursday.
Meanwhile, Shein has published a notice on its website saying that its shopping platform is temporarily unavailable in Vietnam as it works with the ministry to register its e-commerce services.
Vietnam assiduously pursues a policy of diversifying and ‘multilateralising’ its external relations
Carl Thayer, University of New South Wales
Some equity investments have been faring better. Chinese electric vehicle battery developer Gotion agreed last year to invest US$150 million in shares of VinFast, Vietnam’s first electric vehicle maker.
The carmaker’s parent company, Vingroup – the largest conglomerate in Vietnam – said in November that Gotion is now a “partner” in VinFast’s supply chain and “part of our efforts to collaborate with potential partners globally to diversify our supply sources”.
VinFast cars sell across a network of flashy showrooms in Ho Chi Minh City. Vingroup said 22,348 electric vehicles were delivered to customers in the first half of this year, more than in the same six months of last year.
In another hint of what may be next, Vietnamese Defence Minister General Phan Van Giang suggested to a visiting Chinese official in October that the two sides work together on the “defence industry and military trade”.
However, the two countries have not settled their maritime disputes, and Hanoi complained in October that Chinese law enforcement personnel had assaulted 10 Vietnamese fishermen near a disputed South China Sea archipelago.
China and Vietnam are unlikely to abandon each other economically if the maritime issue crops up again, experts say.
But Thayer said Vietnamese leaders would look past China for help on major projects such as railways.
“Vietnam assiduously pursues a policy of diversifying and ‘multilateralising’ its external relations and thus keeps all avenues open with respect to large-scale infrastructure projects,” he said.


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China trade

From durians to snow tourism, China-Vietnam economic ties enjoy banner year

Illustration: Henry Wong

Staff label durians to be exported to China at a durian processing plant in Dak Lak province in Vietnam. Photo: Xinhua

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A Vinfast electric cehicles factory. Photo: Getty Images

Quy Nhon port in Vietnam’s Binh Dinh province. Photo: AFP

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A railway worker holds a flag to signal safety for a passenger train passing through a railway crossing in Hanoi. Photo: AFP

Workers repair tracks at Van Dien Station in Hanoi on Saturday. Photo: AFP

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Brisker trade and new investments in factories and infrastructure among the fruits of pragmatic approach to relationship


Brisker trade and new investments in factories and infrastructure among the fruits of pragmatic approach to relationship.


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