Vietnam, China Fortify Multifaceted Cooperation

General Secretary and President To Lam, accompanied by his spouse and a high-ranking official delegation from the Party and State of Vietnam, successfully concluded a state visit to China from August 18-20. This visit marked General Secretary and President To Lam's first foreign trip in his new position and represented a very important diplomatic event for both Vietnam and China this year. It had a profound impact on shaping the future course of the long-term relationship between the two Parties and countries.

Chinese General Secretary and President of China Xi Jinping (R) welcomes Vietnamese General Secretary and President To Lam

Reinforcing political trust and maintaining regular exchanges

During the visit, General Secretary and President To Lam held talks with Xi Jinping, General Secretary and President of China. He participated in a signing ceremony for cooperation documents between the two countries, attended a tea party, and held meetings with key Chinese leaders, including Li Qiang, Premier of the State Council; Zhao Leji, Chairman of the Standing Committee of the National People's Congress; and Wang Huning, Chairman of the Chinese People's Political Consultative Conference. Additionally, General Secretary and President To Lam met with the Secretary of the Guangdong Provincial Party Committee and interacted with representatives from Chinese friendship organizations. He also visited the Chairman Mao Zedong Memorial Hall, the Central Party School of the Communist Party of China, and MEGVII Company.

During this trip, General Secretary and President To Lam, along with his wife and the high-ranking Vietnamese delegation, also laid flowers and offered incense in honor of Martyr Pham Hong Thai at the Huanghuagang Mausoleum Park and visited the historical site of the Vietnam Revolutionary Youth League's headquarters in Guangzhou City, Guangdong Province. Additionally, they visited the Vietnamese Embassy and met with the Vietnamese community in China.

During the talks and meetings, the two sides provided updates on the current situation of their respective Parties and countries, exchanged in-depth perspectives, and reached important common understandings regarding their bilateral relationship. They also discussed current international and regional issues.

General Secretary and President To Lam and General Secretary and President Xi Jinping agreed to enhance political trust and ensure regular exchanges and interactions between senior officials of both Parties and countries. They emphasized the strategic guiding role of the Party channel in overall bilateral relations. Additionally, they agreed to deepen theoretical cooperation through seminars, share the latest theoretical and practical advancements, and contribute positively to the goals of each Party and country.

General Secretary and President To Lam and his Chinese counterpart Xi Jinping witness the signing of cooperation documents between the two countries

The two sides agreed to further reinforce cooperation in security and defense and foster economic, trade and investment cooperation, including promoting the connection between the "Two Corridors, One Belt" Initiative with China's Belt and Road Initiative, enhancing infrastructure connectivity in railways and roads, bolstering supply chain cooperation, and economic cooperation between border provinces, and increasing exchanges on the reform of State-owned enterprises (SOEs).

General Secretary and President Xi Jinping affirmed that China is willing to increase imports of Vietnamese agricultural products and expand trade promotion offices in the country and pledged to create favorable conditions for high-quality Vietnamese agricultural goods to enter the Chinese market.

The two sides agreed on the need for further enhancing people-to-people exchanges, boosting mutual understanding and friendship between the two countries' people, especially the youth. They agreed to designate 2025 as the “Year for Vietnam-China Humanistic Exchange”.

The two leaders also exchanged international and regional issues of shared concern and stressed the coordination and mutual support at multilateral forums and international mechanisms for the legitimate interests of the two countries to make positive contributions to the common interests of the international community.

Strongly expanded economic, trade and investment cooperation

In recent years, economic, trade and investment cooperation has continuously deepened and become a bright spot in the Vietnam-China relationship.

China has long been Vietnam's largest trading partner and the second largest export market for Vietnamese goods. Vietnam is China's largest trading partner in the Association of Southeast Asian Nations (ASEAN) and ranks as China's fifth largest trading partner globally, following the United States, Japan, Korea, and Russia.

The two-way trade value reached US$171.9 billion in 2023 and US$94.8 billion in the first six months of 2024, of which Vietnam's exports to China totaled US$27.8 billion, marking a 5.3% increase compared to the previous year.

According to the General Department of Vietnam Customs, Chinese companies are interested in manufactured industrial goods, agricultural and aquatic products, especially tropical agricultural products, and fruits like durian, watermelon and banana. They have increased their imports from Vietnam.

China continued to be Vietnam's largest import market with an estimated value of US$67 billion, an increase of 34.7% in the first six months of 2024. Vietnam ran a trade deficit of US$39.2 billion with China in the period, up 67.9% year on year or an increase of US$14.7 billion.

According to data from the General Department of Customs, major imports from China include computers, electronics products and components, machinery, equipment, tools, fabrics, phones and components, iron and steel, plastics, chemicals, textiles and garments, leather and footwear, electric wires and cables, yarns, fibers and glass.

The talks between Vietnamese General Secretary, President To Lam and Chinese General Secretary, President Xi Jinping

China has the most new FDI investment projects in Vietnam. According to the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment, among 91 countries and territories investing in Vietnam in the first seven months of 2024, China has the largest number of new investment projects in Vietnam, accounting for 29.7%. China's investment in Vietnam has increased more than sevenfold, making it the 6th largest investor among 146 countries investing in Vietnam. The investment fund from China surged significantly, rising from US$2.92 billion in 2021 to US$4.47 billion in 2023.

According to Minister of Planning and Investment Nguyen Chi Dung, many world-leading Chinese international corporations have been present in Vietnam, engaged in technology, electricity-electronics, processing, manufacturing, infrastructure, renewable energy and electric vehicles.

Chinese foreign direct investment (FDI) in Vietnam was previously concentrated in sectors such as wooden furniture, iron and steel, leather footwear, apparel, food processing, and plastic packaging. However, in recent years, Chinese investment has increasingly shifted toward high-tech industries, industrial components, electronics, automotive, and green energy.

Binh Duong is a popular destination for FDI projects in the country, with China having the most with more than 1,660 projects with a registered value of over US$10 billion (as of the end of 2023). Bac Ninh province licensed 105 FDI projects licensed in the first quarter of 2024, with more than half (60 projects) coming from Chinese investors.

Trade and investment prospects between Vietnam and China are expected to remain strong, supported by recovering import demand for production. Both countries are poised to benefit from increased investment and cooperation, leveraging incentives from bilateral and multilateral agreements such as the ASEAN-China Free Trade Agreement (ACFTA) and the Regional Comprehensive Economic Partnership (RCEP), to which both Vietnam and China are signatories.

By Lan Anh, Vietnam Business Forum