Vietnamese economists believe that China will be careful about Vietnam-China trade because the economies of both countries are interdependent, while cross-border trade is now the main source of income for the poorest Chinese provinces, the English-language news website VietNamNet Bridge has said.
According to the news website, worries have been raised that Vietnam’s economy, which depends on China as a material supplier and finished product consumer, would suffer heavily if China unilaterally stops doing business with Vietnam amid the escalating tensions in the East Sea.
However, economists have affirmed that Vietnam should not be too worried because China understands that it will suffer if it does this, as it also depends on Vietnam economically.
Vu Tien Loc, Chair of the Vietnam Chamber of Commerce and Industry (VCCI), said trade activities with Vietnam across the border have been bringing profits to China, especially its poorest provinces.
Also Vietnam is now the biggest market in Southeast Asia for Chinese contractors, while Chinese investors can see benefits from their investment projects in Vietnam.
Vietnam now imports up to 60 percent of materials it needs for local production from China, while it hires Chinese EPC (engineering, procurement, construction) contractors for 90 percent of its projects.
“The great benefits Chinese can expect in Vietnam will force them to think carefully before making any decisions related to economic sanctions,” Loc said.
In today’s world, when production lines and global supply chains are organised in a modern way, all economies are, to some extent, interdependent. This is why many countries in the world, including Vietnam, want to do business with China.
“We are now in an era of global liberalisation, when economies and businesses depend on each other for mutual benefit. The principle is right for both Vietnam and China,” Loc said at the National Assembly’s session on June 6.
“We will continue struggling to ask China to withdraw the oil rig out of the Vietnamese waters. And we can say that any move to damage Vietnam-China trade activities will badly affect the two economies and their businesses.”
Vu Viet Ngoan, Chairm of the National Finance Supervision Council, also thinks China would not choose the way which could badly affect its economy.
There are two scenarios for Vietnam’s economy in 2014. One is that China would not take steps that could affect the bilateral economic relationship. If so, Vietnam’s economy would not be affected much, according to Ngoan. The other is that if China applies the policies which are contrary to Vietnam-China mutual benefits, Vietnam’s economic growth targets may be unreachable.
“However, in my opinion, the second scenario will not happen,” Ngoan said, stressing that Vietnam needs to “prepare for the worst” and that it is the right time for the country to diversify markets to ease reliance on some specific partners.-VNA
According to the news website, worries have been raised that Vietnam’s economy, which depends on China as a material supplier and finished product consumer, would suffer heavily if China unilaterally stops doing business with Vietnam amid the escalating tensions in the East Sea.
However, economists have affirmed that Vietnam should not be too worried because China understands that it will suffer if it does this, as it also depends on Vietnam economically.
Vu Tien Loc, Chair of the Vietnam Chamber of Commerce and Industry (VCCI), said trade activities with Vietnam across the border have been bringing profits to China, especially its poorest provinces.
Also Vietnam is now the biggest market in Southeast Asia for Chinese contractors, while Chinese investors can see benefits from their investment projects in Vietnam.
Vietnam now imports up to 60 percent of materials it needs for local production from China, while it hires Chinese EPC (engineering, procurement, construction) contractors for 90 percent of its projects.
“The great benefits Chinese can expect in Vietnam will force them to think carefully before making any decisions related to economic sanctions,” Loc said.
In today’s world, when production lines and global supply chains are organised in a modern way, all economies are, to some extent, interdependent. This is why many countries in the world, including Vietnam, want to do business with China.
“We are now in an era of global liberalisation, when economies and businesses depend on each other for mutual benefit. The principle is right for both Vietnam and China,” Loc said at the National Assembly’s session on June 6.
“We will continue struggling to ask China to withdraw the oil rig out of the Vietnamese waters. And we can say that any move to damage Vietnam-China trade activities will badly affect the two economies and their businesses.”
Vu Viet Ngoan, Chairm of the National Finance Supervision Council, also thinks China would not choose the way which could badly affect its economy.
There are two scenarios for Vietnam’s economy in 2014. One is that China would not take steps that could affect the bilateral economic relationship. If so, Vietnam’s economy would not be affected much, according to Ngoan. The other is that if China applies the policies which are contrary to Vietnam-China mutual benefits, Vietnam’s economic growth targets may be unreachable.
“However, in my opinion, the second scenario will not happen,” Ngoan said, stressing that Vietnam needs to “prepare for the worst” and that it is the right time for the country to diversify markets to ease reliance on some specific partners.-VNA
