VietNamNet Bridge – Vietnam and China both have committed to increase the two way trade turnover to $60 billion by 2015. Analysts believe that China would get more slices of the $60 billion cake.

Among the countries which have trade relations with Vietnam, no other has such a sharp increase in the two way trade turnover.

At first, in 2000, Vietnam and China agreed to set a goal to obtain the turnover of $2 billion. However, the two-way trade turnover of the year actually reached $2.5 billion.

After that, the target was lifted to $5 billion by 2005. However, the two-way trade turnover reached $7.2 billion in 2004 already. Since then, China has been the biggest trade partner of Vietnam which makes up 14.8 percent of the total import & export turnover of the country.

The target was then raised to $20 billion by 2010, but once again, the threshold was exceeded when the turnover reached $20.18 billion in 2008.

The rapid trade development has prompted the two countries to raise the target sharply to $60 billion by 2015.

In order to speed up the implementation of the commitments, the two sides have signed the agreements on the establishment of trade promotion offices in every country, the memorandum of understanding on the establishment of the Vietnam-China border economic cooperation zones, the memorandum of understanding on the establishment of the taskforce that supports the implementation of the Chinese invested projects in Vietnam.

However, economists have warned that this is not good news at all, if Vietnam cannot improve itself to boost more products to the Chinese market. The increase in the two-way trade turnover may mean the higher trade deficit for Vietnam.

China is the Vietnamese biggest trade partner, the biggest exporter to Vietnam and the biggest market with which Vietnam has trade deficit.

Meanwhile, Vietnam’s export volume to China only ranks the fourth, after the US, EU and Japan. In the first 10 months of 2013, Vietnam’s export turnover to China was just equal to 55 percent of its export turnover to the US during the same time.

China buys Vietnamese rice in large quantities. It imports rubber from Vietnam and then exports tires to Vietnam. It imports coal and iron and then exports steel.

China makes investment in mining in Vietnam, carries iron to China, invests in power plants, mostly small and medium hydropower plants, pours money into car part production projects, motorbike assembling and animal feed factories.

At the same time, Chinese businesses bring backward technologies and equipment, which cause environment pollution, and thousands of workers to Vietnam.

Vietnam’s trade deficit in the relation with China is bigger than any other trade partner. In 2001, the trade deficit was modest, at $200 million. Meanwhile, the figure soared $19.7 billion in the first 10 months of 2013, or 98 times higher.

Chinese products have been flooding the Vietnamese market, from cosmetics to clothes, from species to big machines, from food to preservatives.

A report said Vietnam imports over 40 categories of products from China, including five categories which have the turnover of over $1 billion (machines, tools and accessories, phone and accessories, computers, electronics and electronic parts, fabric, and steel).

Nguyen Duy Nghia