Vietnam and China, Part II
HO CHI MINH CITY, Vietnam — Keeping good relations with China will certainly continue to be one of the Vietnamese government´s main priorities.
The reasons for this have been of political nature; but increasingly economic reasons take priority. While there are some success stories like Vietnamese companies winning back the local beer market, the Vietnamese reliance on Chinese products and production materials is huge. According to a government official, the bilateral trade volume between China and Vietnam amounts to $15 billion a year. Vietnamese imports from China clearly outstrip opposite trade flows - the Vietnamese trade deficit with China is at around $8 billion.
When traveling in Vietnam, we heard about two recent instances where China flexed its muscles in times of economic challenge: When a British oil company explored drilling possibilities of Vietnamese oil fields close to the Chinese border, China forced the company to stop. Find a related news article here.
When Vietnamese media reported about Chinese-made toys containing lead paint, China retaliated by suspending food imports from Vietnam. A media representative said that they were told by their editors to immediately stop reporting about the lead paint scandal.
The Vietnamese plans to continue their economic reforms, to diversify their economy and to rely on quality and productivity instead of quantity make much sense; but it will remain difficult to strike a balance between economic dependence on China and attempting to go their own way when it comes to domestic economic growth and greater political freedom.
It is interesting, though, that some Vietnamese have revised their perception of China. For them, China is first and foremost a market of 1 billion people next door to Vietnam.