China's dispatch of an oil rig and an aggressive flotilla into Vietnam’s EEZ ignited protests across Vietnam and the world, but it has yet to significantly dampen trade between the two neighboring countries, officials announced at a Thursday meeting in Hanoi.
Minister of Industry and Trade Vu Huy Hoang reported that industrial figures have been climbing year-on-year and surveys of sectors that regularly depend on Chinese trade found that business (like the export and import of agricultural produce) has remained normal.
“The situation has yet to cause any signs of significant disturbance,” he said.
The Asian giant is investing in several major projects in Vietnam including two hydropower plants in the south as well as fertilizer, iron and steel factories outside Hanoi. It also provides the main contractors for Vietnam’s bauxite projects in the Central Highlands.
Work at the projects have proceeded as scheduled, officials said.
The steel factory in Lao Cai Province, in which China holds a 49 percent stake, just delivered its first products.
During the recent meeting, Prime Minister Nguyen Tan Dung said that Vietnam and its big neighbor will always have an economic relationship.
The ongoing conflict, which has involved a deadly riot at a Chinese-owned factory and the self-immolation of a Vietnamese woman, is just part of the ups and downs of that relationship.
In the long term, bilateral trade will still benefit both sides, he said.
He said China will suffer losses if it stops exporting to Vietnam and has to buy agricultural produce from other countries at higher prices.
In the time of globalization, no trade will come to a dead stop, he said, noting that China cannot simply shut its doors.
Doing so would expose the country to huge pressure from World Trade Organization and arbiters of the ASEAN-China free trade agreement, he said.
The PM urged Vietnamese citizens to fight for their sovereignty with one hand, and with the other hand maintain normal trade relations with Chinese partners.
Given the situation, however, the prime minister warned that the economy needs to be prepared to engage alternative partners at any time.
Vietnam needs to diversify its markets for import, export, tourism, investment and labor, he said.
Trade minister Hoang also said it’s time for Vietnam to reduce its trade dependence on China, given that the bilateral trade deficit climbed to around $40 billion last year.
He said Vietnam needs to seek new partners, in case trade with China is interrupted.
Vietnam is a suffering trade deficit with China but it enjoys a trade surplus with the US and Europe, so there is room to maneuver, officials said.
Minister of Agriculture Cao Duc Phat said that Chinese dealers have put pressure on the prices of several products like sweet potatoes and rubber, but that’s not a problem as local businesses can find alternative sources for those materials.
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