Gu Chaoqing, chairman of the Business Association of China in Vietnam, talks to China Daily online from Vietnam. (PHOTO PROVIDED TO CHINA DAILY)
Chinese and Vietnamese companies have enhanced their cooperation during the pandemic and created opportunities out of the crisis, a business association leader says.
Despite all the challenges posed to bilateral trade and economic exchanges by the pandemic, Gu Chaoqing, chairman of the Business Association of China in Vietnam, said companies from both countries have strengthened their collaboration and expanded cooperation in areas like the healthcare sector.
Established in 2011 under the support and approval of the Chinese embassy in Vietnam and the Vietnam Chamber of Commerce and Industry, BACV is committed to strengthening cooperation and communication between Vietnamese and Chinese businesses.
Chinese companies have played a positive role in Vietnam’s economic recovery amid the pandemic, which has helped safeguard the smooth operation of the supply chain in the region and beyond, said Gu.
“China and Vietnam have effectively controlled the pandemic under the strong leadership of the governments, which has created the prerequisite for the resumption of the economy and industrial production,” he said.
Established in 2011 under the support and approval of the Chinese embassy in Vietnam and the Vietnam Chamber of Commerce and Industry, BACV is committed to strengthening cooperation and communication between Vietnamese and Chinese businesses
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“When the COVID-19 situation eased in China, many Chinese companies returned to Vietnam to resume production and accelerate the manufacturing and export of medical equipment and relevant products,” said Gu, adding that this has contributed to Vietnam’s pandemic control and economic recovery.
The cooperation between Chinese and Vietnamese companies has also been enhanced, especially in the logistics industry, said Gu.
“When Vietnam’s industrial chain was at a breaking point, these companies speeded up production and ensured smooth logistic operation via land, sea and air transportation, helping safeguard Vietnam’s supply chain,” he said.
Though many were not sure what to do at the beginning, they formed partnerships and jointly face the crisis, said Gu, adding that the pandemic has created opportunities for companies in both countries to jointly explore third-party markets like Europe and the United States.
Vietnam’s national index for industrial production rose 2.7 percent year-on-year in the first ten months of 2020, according to Xinhua News Agency, citing data from Vietnam’s General Statistics Office.
Vietnam’s economy is expected to grow 1.8 percent this year and bounce back to 6.3 percent in 2021, according to a forecast by the Asian Development Bank. This will make it one of the few economies in the Asia-Pacific region, along with China, that can post positive economic growth this year.
ADB’s report said that the recovery of the Chinese economy will also be a contributing factor to Vietnam’s positive economic outlook.
Bilateral trade volume between the two nations also saw continuous growth since the beginning of this year, thanks to the two countries’ efforts to control the contagion, said Gu. “The China-Vietnam trade cooperation is resilient,” he said.
Noting that their bilateral trade exceeded US$160 billion last year, he said this is expected to increase in 2020.
In the first ten months of 2020, bilateral trade between China and Vietnam reached nearly US$150 billion, up 16.2 percent year-on-year, according to data from China’s General Administration of Customs. During the same period, it accounted for over 27 percent of China’s trade with the Association of the Southeast Asian Nations, and Vietnam – its chair this year – remained China’s biggest trading partner in the 10-member bloc.
Gu said that Chinese and Vietnamese economies complement each other and that he expects that the cooperation between the two countries in trade and economics as well as in industrial capacity will continue to grow steadily.
In fact, China has already become an important source of foreign investment of Vietnam. “As of August, the number of direct investment projects by Chinese companies in Vietnam amounted to 3,049, with the accumulated investment volume reaching US$21.1 billion,” said Gu.
Citing statistics from the Vietnamese Ministry of Planning and Investment, Gu said China ranked third among over 100 countries and regions investing in Vietnam in the first ten months of this year. The registered investment capital reached US$2.17 billion, accounting for 9.2 percent of the Southeast Asian country’s total foreign investment.
Currently, the investment from Chinese companies mainly focuses on such sectors as the processing and manufacturing industry, real estate, and electricity, according to Gu, who expects more Chinese companies to invest in Vietnam with enhanced bilateral relations and cooperation in trade and economics.
“The favorable climate of international trade in Vietnam has provided a platform for Chinese companies to participate in the global industrial chain,” said Gu. “On the other hand, the investment by Chinese companies has injected impetus in Vietnam’s economy and created more jobs.”
But there are also challenges for Chinese companies to invest in Vietnam, said Gu. For example, the average size of investment projects by Chinese companies in Vietnam is still relatively small. In addition, he said there is a lack of a comprehensive understanding of local regulations among Chinese companies, as well as their awareness of localization.
To help tackle the challenges, Gu said BACV has been working to promote bilateral cooperation in trade, economics and investment. It has been facilitating the integration and synergy among investment projects in different industries by setting up various industry bodies; organizing trade and investment events to connect businesses from both countries; and providing consultancy services in terms of legal and market information.
“During the pandemic, we also organized consultations and other activities to explain government policies, and encouraged Chinese companies to participate in events organized by the Vietnamese government,” said Gu.
BACV also established cooperation with the Vietnam Chamber of Commerce and Industry to help Chinese companies in Vietnam.
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Gu said China and Vietnam should deepen their trade and economic cooperation after the pandemic, make full use of their respective strengths and promote mutual development as well as cooperation in trade, economy and industrial chains. “This will help provide support from an industrial chain perspective to the recovery and development of the global economy,” he said.
Amid rising protectionism and anti-globalization, Gu said that Chinese companies in Vietnam will firmly uphold globalization, further expand industrial cooperation with Vietnamese companies and bring more direct investment to Vietnam, making contributions to promote bilateral trade, economic cooperation and the economic development of both countries.
At BACV, he said the association will work more proactively to serve the building of the Belt and Road Initiative, provide needed services to Chinese companies in Vietnam, participate in social activities for public good and encourage its members to do the same, and become the bridge for companies in China and Vietnam.
