A leading Vietnamese trade expert suggests that Vietnam seek alternative trading partners to reduce reliance on China market, and revise cross-border trade policy with its neighbour to increase value-added exports, radio The Voice of Vietnam (VOV) reported on July 6.

Professor Pham Tat Thang, a senior researcher of the Ministry of Industry and Trade, said in an interview with VOV that it is crucially important to reduce reliance on the Chinese market, and to do so requires closer coordination and improved awareness by ministries, sectors, businesses and farmers of their roles.

*What difficulties will Vietnam meet if China closes its border gates and tightly controls border trade?

Undoubtedly trade ties between Vietnam and China have grown and flourished substantially since Vietnam implemented its open-door policy. Both countries have benefited from annual trade growth of between 15 and 22 percent.

However, after China illegally placed its oil rig Haiyang Shiyou-981 deep inside Vietnam’s exclusive economic zone, there was a false rumour that China closed border gates with Vietnam. The Ministry of Industry and Trade said that was incorrect information.

Most recently, Chinese lychees were said to have entered Vietnamese border markets. Experts noted that was misleading information.

The fact is that China is a leading trade partner of Vietnam, consuming one third of Vietnamese farm produce output annually. Notably, China imports 70-75 percent of Vietnamese rubber latex, 20 percent of cashew nuts, 100 percent of cassava, and 67 percent of dragon fruits. Therefore, Vietnam should work on contingency plans just in case China decides to impose restrictions on these imports.

*Cross-border trade currently is an important trade activity between Vietnam and China. In your opinion, how will our border trade policy be adjusted to reduce overreliance on China?

After joining the World Trade Organisation (WTO), both Vietnam and China have desired to develop trade relations officially under signed agreements or contracts. There are a number of border gates erected along the long border between the two countries, making it easier for informal cross-border trade activities every day, and this kind of trading will be maintained in the coming time.

The crux of the matter is how we keep a tight grip on such cross-border trade to minimise risks and optimise business operations that are in the best interest of Vietnam. For example, Chinese dealers recently came and purchased lychees grown in Luc Ngan district, Bac Giang province. They asked Vietnamese farmers to pack boxes of lychees under their guidance in order to reduce customs procedure clearing and travel time.

*Several experts say Vietnam should reduce both trade transactions and economic relations with China. What do you think about this comment?

Our consistent policy is that the Vietnamese economy should not be highly dependent on any market, especially China. China is a global economic power. There is a fact that trading with China brings benefits to Vietnam, but poses numerous risks at the same time.

We need to keep a cool head in trade exchanges with China so that we can gain more benefits and simultaneously minimise dependence on this market. To do this, Vietnam should make a drastic change in terms of its management capacity and infrastructure investment.

As one example, China currently consumes 67 percent of Vietnamese dragon fruits. To diversify its export markets, Vietnam needs to comply with strict technical specifications set up by other importers.

The US, Japan and Australia, for example require all dragon fruits to pass rigid radiation tests. That requires Vietnam to make huge investment in terms of labour force, education and infrastructure investment. It also requires closer coordination among ministries, sectors, businesses and farmers.

Similarly, if we do not diversify our rubber products, we will only can export unprocessed rubber latex to China.-VNA