Authors: Do Quynh-Anh & Jack Balavadze
It is true that the political institutions in Vietnam are profoundly influenced by China. When China conducted the economic reform in 1978, Vietnam faced with new situations domestically and internationally, also followed the Chinese footsteps by the Innovation or Doimoi in 1986. If during the Cold War, the Soviet Union and China played the important role as the supporters of Vietnam, after the collapse of the Soviet Union (1991), China became more important and meaningful partner for Vietnam. It is not only the captain of the remaining communist countries, the largest remaining, but also a good example of reform. That is the valuable experience for Vietnam in Doimoi process. Since the normalization of relations in 1991, China and Vietnam have developed a stable relationship on two pillars: First, the regular exchanges between the Communist Party and the governments of the two countries set up to expand cooperation, manage affairs and disagreements and resolve disputes through peaceful negotiation. Second, Vietnam and China join multilateral mechanisms, especially the mechanisms led by ASEAN to implement preventive measures and preventive diplomacy. Based on these two pillars, the political trust and cooperation in various fields between the two countries are reinforced and expanded rapidly.
Given this, when the socialist regime no longer prevails in the world as in the Cold War period, only five communist party-ruled countries left in the world – China, Vietnam, North Korea, Cuba and Laos. The relationship between Vietnam and China became more and more essential. In particular, facing the complex global political situation and incessant integration, the “hostile forces” are always waiting for the chance to fight against socialism and overthrow the communist states. This demands the two parties and two states to come closer together, to deal with all kinds of external attacks. Communist regime could not be considered as the optimal choice, but at the present time, it plays an important role in stabilizing the social order of the both countries, a collapse of each side will be likely to cause the collapse of the other or at least it also causes unstable security and society situation.
Economically, both the Chinese Communist Party Congress XIV (10/1992) and the Vietnamese Communist Party Congress VI (12/1986) declared the goal of “building the market economy-oriented socialist regime”. This explains why Vietnam and China together share the same economic development model with the leading role of the state-owned enterprises. So, the economic cooperation between the two sides has many advantages such as fast procedures, many incentives, advantage of transportation. The economic relations between Vietnam and China in recent years have been carried out in various forms. Besides the traditional forms such as trade, development aid, economic and technical cooperation between the two governments, there is also private economic cooperation which still is small in scale. The exchange of commodities across the land border has been developed extensively. The land border between the two countries is nearly 1,450 km includes 7 provinces of Vietnam and 2 provinces of China. All of these forms have developed very vibrantly and effectively. Economic relations between Vietnam and China has a “win-win” content. The bilateral trade benefit of the two countries is a truism. China is currently the 8th largest foreign investor in Vietnam and Vietnam is China’s largest trade partner in ASEAN. The economic dependence between the two sides is reflected in each other’s role.
Chinese enterprises have won contracts in major national projects, especially in power projects, infrastructure. For FDI, according to the Ministry of Planning and Investment (MPI), for the first 10 months of 2017, the registered capital in total from China is over 1.8 billion USD, ranking 8th out of 128 countries investing in Vietnam. Until September 2017, China had 1,747 FDI projects with a total investment of more than US $ 11.9 billion invested in Vietnam.
The industries of Vietnam heavily depends on China, most of the basic materials for manufacturing products of Vietnam (fabric, electronic components …) are imported from China. China also has built up a developed auxiliary industry. China is known as the world’s factory currently, with the advantage on fast production, low price, competitive models, plenty of types. Therefore import from China is a reasonable choice, both fast and convenient, creating a larger surplus value while preserving the environment.
In terms of agriculture, China is still the main buyer of most of Vietnam’s raw agricultural products (pepper, fruit, sugar cane, etc.). Vietnam is currently lacking a closed production process as well as output of products. These factors have made China be an indispensable part of the Vietnamese economy, especially in terms of agriculture and industry, with both input and output. It is estimated that if China ends its bilateral economic relations with Vietnam, Vietnam’s GDP will decrease by 10%. Currently, Vietnam is one of the largest export markets for China and the largest trade partner of China in ASEAN. According to Chinese statistics, in the first nine months of 2017, the total value of Chinese exports to Vietnam reached 49.8 billion dollars. China is keeping trade surplus in bilateral trade, so that the annual flow of foreign currencies from Vietnam to China plays a not small role in its budget. China wants to ensure that the flow of capital from the country at the lowest level of cost, through the establishment of AIIB, exchange foreign currency with the aim of “Repositioning the stature of the world’s second largest economy.” In addition, as mentioned above, with the strength of a developed agricultural country rich natural recourses, Vietnam is one of the main supply sources of raw materials at relatively cheap price for China. Moreover, Vietnam is also an important link in the new economic policy set by President Xi Jinping for the B & R initiative with the aim to re-build the “Silk Road legend” which will connect China with Europe. Vietnam obviously should not stand outside because the silk-road passes through the most of ASEAN countries.
Up to the present time, Vietnam and China have had a long-time trade relationship so any changes will make the two sides face the risk of crisis, causes the losses for the both sides. On the prospect of Sino-Vietnamese relations, despite there are many disagreements such as the South China Sea issue but it is not the whole Sino-Vietnamese relations. The leaders of the two countries will not, because of this issue, ruin the good relations between two sides. They will continue to work together to promote bilateral friendly cooperation. At present, China and Vietnam have agreed to build the relations on the basis of common interests and mutual benefit. The two parties have been working together to implement and abide by the international conventions such as the Code of Conduct for the South China Sea (COC), with the aim of restraining conflicts and disagreements in the South China Sea and the region which will create a platform for the development of the relations of the two countries.
In addition, at present time, with the goal of becoming a leading power in the international arena, China still needs a stable environment domestically and internationally to continue to strengthen its capabilities, stable alliances, relationships with other regional. They all are best measures for China in order to build a better position on the way of rise.
In summary, in the present context, the important premise for the stable and healthy development of China-Vietnam relations in long-term is to implement effectively the agreements reached between the two sides, handle the disagreements, reinforcement of mutual trust, promotion of cooperation for the benefit of each side, public diplomatic promotion of friendship between the peoples of two countries.
*Do Quynh-anh is a PhD student from Vietnam, and Jack Balavadze is MA student from Georgia. Both are studying in Jilin University, China
