Vietnam-China: Investment and Trade Promotion

 

Due to the policy of renewal, Vietnam has doubled its GDP in 1991-2000 and maintained an economic growth rate of over 7.5 per cent in the last four years. In the first half of 2005, in spite of a price hike in raw materials, Vietnam continued to see growth rates of over 7.5 per cent. With socio-political stability and a comparative edge in natural resources, workforce and location, Vietnam has become a potential destination for foreign investors. So far, Vietnam has over 5,200 FDI projects with registered capital of over US$48.5 billion. Each year, the FDI sector contributes 14.5 per cent in GDP, nearly 20 per cent in social investment, 31 per cent in export value (excluding crude oil) and nearly 35 per cent in industrial value. After the regional financial crisis, FDI flow resumed in 2001, adding over US$4.2 billion in 2004 and US$2.7 billion in the first half of 2005 ( 1.7 times that of the same period last year). Vietnam has established economic cooperation with over 150 countries and territories and participated in regional and world organisations such as ASEAN, ASEM, APEC and WTO.

 

To achieve the goal of becoming an “industrialised country by 2020”, Vietnam will develop inner strengths and continue to garner international support, making the investment environment more liberal and attractive in the following orientation :

 

·         Expanding investment encouragement, gradually lifting restrictions applied to foreign investors on market access, opening a service market compatible with international commitments.

·         Removing discriminations between local and foreign investors, creating a level playing field for all economic sectors, accelerating the price re-adjustment in favour of investors.

·         Improving policy on investment, especially land use, foreign exchanges, technology transfer, environment, financial and monetary system.

·         Refining investment formalities, management capacity and delegating power to lower levels.

·         Upgrading infrastructure, power and water supply, public works, and seaports.

·         Improving the quality of human resources to meet the demand of investors.

 

In addition to the promotion of foreign investment, Vietnam continues the equitisation process of State-owned enterprises including those in important sectors such as energy, civil aviation, metallurgy, mechanics, and chemistry thereby facilitating indirect investment of foreign entrepreneurs and organisations.

 

By the end of 2005, the National Assembly of Vietnam will consider and promulgate important laws including the Investment Law and Enterprise Law applied to both local and foreign investors creating a liberal, transparent and equitable legal framework for all economic sectors.

 

Vietnam-China relations have been defined by the leaders of the two countries as ”Friendly neighbourhood, bilateral cooperation, lasting stability, looking towards the future”. It is most gratifying to note that alongside the high economic growth, the investment and trade between the two countries has recorded important progress. The two-way trade value increased from US$2.5 billion in 2001 to US$4.6 billion in 2003, US$7.2 in 2004, and US$3.8 in the first half of 2005 ( 25 per cent more than the same period last year) and China has become Vietnam’s biggest partner. By June 2005, Chinese enterprises had 333 projects operating in Vietnam with registered capital of US$689 million, ranking 14^th among 69 countries and territories investing in Vietnam.

 

The two neighbouring countries are successfully carrying out the policy of openness, gaining important achievements and promoting bilateral cooperation in investment and trade, especially in such programmes as ‘Two corridors and one economic ring”, “Sub-Mekong region cooperation” and “ASEAN-China cooperation”.

 

Vietnam highly values the economic cooperation with China, encouraging Chinese enterprises to invest in Vietnam especially in sub-materials for garments, footwear, electronics, mechanics, information technology, construction, consumer goods, food processing, wooden products for export and herbal medicines.

 

For its part, the Ministry of Planning and Investment will support and facilitate Chinese investments in compliance with Vietnamese law and international commitments.