Stronger bilateral relations seen helping
Chinese businessmen are making serious money in Vietnam, as Vietnam’s economic development has provided many business opportunities, according to several Chinese entrepreneurs in Vietnam.
Ou Kui, chairman of Vietnam Yanian Clothing Co, a clothing manufacturer and exporter in Vietnam, said that his company’s order quantities have been able to “guarantee 20 percent growth” annually in the last few years.
Chen Xiying, chief representative of Dongfang Electric Corp’s Vietnam office, also noted that Dongfang Electric has carried out many hydropower and thermal power projects in Vietnam.
“So far, power equipment manufactured by Dongfang Electric in Vietnam has a total capacity of 10 million kilowatts,” he said.
Big industry, good business
The Chinese businessmen the Global Times talked to said that certain business sectors in Vietnam are developing very fast, which has offered opportunities for Chinese businessmen there.
For instance, Chen said that Vietnam’s power industry is still in the midst of a “rising period” currently.
“Chinese power companies entered Vietnam’s power construction market around a decade ago. Nowadays, the northern areas in Vietnam no longer suffer from frequent blackouts – this has a lot to do with projects completed by Chinese companies,” Chen said. “Now that the Vietnamese economy is continuing to grow, there is still development space and market demand in the power sector.”
Ou also said that the clothing industry in Vietnam is “booming,” with the sector’s revenue currently accounting for about 15 percent of the country’s annual GDP.
“We chose Vietnam to be our manufacturing base for a number of reasons: The country has abundant resources; it has a mature labor force; and the Vietnamese government has rolled out a series of policy bonuses for overseas companies,” Ou said.
He added that these factors have prompted many domestic clothing companies to move to Vietnam.
Another factor aiding Chinese businesses in Vietnam is the fact that the two countries’ economic and trade relations are warming up rapidly.
China’s exports to Vietnam surged by 16.3 percent year-on-year to $56.36 billion in the first 10 months this year, while imports increased by 30.1 percent, according to Chinese customs data published on Wednesday.
China’s investment in Vietnam in 2016 also surged by 130 percent on a yearly basis to $1.28 billion, data released by the Ministry of Commerce showed on November 2.
Gu Xiaosong, an expert on Southeast Asian studies at the Guangxi Academy of Social Sciences, said that in the past, Sino-Vietnamese political friction negatively impacted the two countries’ economic relations for quite a long time, and the situation hit a low point in 2014, when anti-China protests broke out in certain parts of Vietnam.
“The friction around 2014 frightened many Chinese businessmen away from investing in Vietnam. But the two countries’ relations have warmed up in the last two years. I believe there will be a big wave of investment from China into Vietnam, particularly with the progress of the Belt and Road initiative,” Ou told the Global Times Thursday.
Gu also said that the two countries’ economic relations have got back on track in the past two years.
“For one thing, both China and Vietnam are prompting economic development by expanding overseas economic cooperation. Also, changes in the global political situation – such as the US paying less attention to the Asia-Pacific region after Donald Trump took office as US president – have impelled Vietnam to embrace products, businesses and capital from China,” Gu told the Global Times on Thursday.
“Vietnam can’t do without help from China to carry out its economic construction. In the future, at least in the short term, economic relations between the two countries will continue to proceed smoothly,” Gu noted.
Ou said that challenges still remain for Chinese businesses in Vietnam, including a lack of project information, the language barrier and rising costs.
Chen said that the biggest problem is still how the two sides adapt to each other in completing the projects.
“When we started to do business in Vietnam, we needed to understand local laws and business regulations, while the Vietnamese side needed to understand our technological features and construction habits. But after several years, we have got to understand each other better and business has become more efficient.”
Source: Global Times