The Impact of China’s Greater Economic Integration with South-East Asia on Vietnam Amitayu Sengupta. Pre 1986 closed Economy model state-controlled Foreign Trade Corporations (FTCs) Planned Import Volumes State determined prices. Doi Moi Relaxation in FTC 1998 – 30 1994 – 1,200
Pre 1986 closed Economy model South-East Asia on Vietnam
state-controlled Foreign Trade Corporations (FTCs)
Planned Import Volumes
State determined prices
Relaxation in FTC
1998 – 30
1994 – 1,200
2001 – 16,200
Removal of QRs and Tariff Reforms
Liberalizing Foreign exchange regimeTwo Phases of the Vietnamese Economy
Tariff or Trade tax system was introduced in 1988. The original structure was rationalized in 1992 and later simplified in 1999 following Vietnam’s accession to the ASEAN Free Trade Agreement (AFTA).
Tariff rates for Vietnam South-East Asia on Vietnam
Vietnamese Exports by percentage South-East Asia on Vietnam
Vietnamese imports by percentage South-East Asia on Vietnam
Vietnamese Trade balance in USD million South-East Asia on Vietnam
The New Millennium South-East Asia on Vietnam
The East Asian Crisis
New Reforms Since 2000 – Focus on import liberalization, banking reforms and improved business environment.
The China Factor
Imbalances in Trade composition and volume.
Chinese accession to WTO.
Greater Global Integration.
USBTA in 2002
CEPT scheme under AFTA
Vietnam joining WTO in 2006
Vietnam China Trade Terms South-East Asia on Vietnam
China Vietnam Trade is mainly dictated by the China ASEAN FTA agreement.
Vietnam, Lao PDR, Myanmar as smaller partners agreed to country specific reduction commitments.
Under the agreement, the ASEAN 6 and China agreed to the following schedule for tariff reduction.
Tariff rate commitments for ASEAN 6 and China
Tariff rate commitments by Vietnam South-East Asia on Vietnam
Vietnam gets 5 more years to remove tariffs.
The rate of reduction is accordingly lower.
EARLY HARVEST PROGRAMME South-East Asia on Vietnam
EHP was a special inclusion to address the concerns of the less developed nations.
EHP allows the poorer nations better access to Chinese markets.
EHP has provisions for Exclusion List , where products deemed sensitive can be excluded from the agreement by a member country.
Meat and Edible Meat Offal
Other Animals Products
Edible Fruits and Nuts
Top partners for Vietnam Imports South-East Asia on Vietnam
Top Partners for Vietnam Exports
Vietnam Imports from China South-East Asia on Vietnam
Vietnam Imports from World
Vietnam Exports to China South-East Asia on Vietnam
Vietnam Exports to World
Vietnam’s Trade Surplus in Petroleum with China South-East Asia on Vietnam
Vietnam mainly exports 270900 (Petroleum oils, oils from bituminous minerals, crude) to China and imports 271000 (Oils petroleum, bituminous, distillates, except crude) from China.
This surplus helps Vietnam fund a part of its imports from China.
A lot of Chinese FDI is involved in Vietnamese Petroleum sector.
The GMS initiative South-East Asia on Vietnam
Chinese FDI in Vietnam South-East Asia on Vietnam
According to the FDI Bureau of Vietnam’s Ministry of Planning & Investment (2007), by April 2007 China ranked 15 out of 77 countries and territories which supports FDI in Vietnam.
For China, Vietnam ranks second amongst ASEAN countries in terms of its FDI flows.
Composition of Chinese FDI in Vietnam South-East Asia on Vietnamproject registered till 2007
Distribution of Chinese FDI in Vietnam South-East Asia on Vietnam
Regions with good infrastructure
Regions closer to the Chinese Vietnam border
Forms of Chinese FDI in Vietnam between 1988-2008
Characteristics of Chinese Investments in Vietnam South-East Asia on Vietnam
CONCLUSION South-East Asia on Vietnam