SFC Exclusive丨Nguyen Viet Dung：Vietnam benefits from China's experience in economic development

21st Century Business Herald reporter Sharon Hu

China-Vietnam cooperation is accelerating. Vietnamese Prime Minister Pham Minh Thanh visited the Lao CAI - Hanoi - Haiphong Railway project in Lao CAI Province on December 22, stressing that the design of train speed and gauge should ensure smooth docking with Chinese railways, and close cooperation should be maintained with China during the design and construction of the project.

Nguyen Viet Dung, Consul General of Vietnam in Guangzhou, said in an exclusive interview with the SFC journalist that China and Vietnam have stressed in a number of joint statements to promote the docking of the development strategies of the two countries, and implement the joint cooperation plan of the Belt and Road Initiative and the framework of the "Two Corridors and One Circle".

Guangdong is also an important part of the trade between China and Vietnam. Nguyen Viet Dung said he has visited many cities in Guangdong and witnessed the vitality of Guangdong's development in the past five months, especially in the aspects of digital transformation, green innovation, smart city construction. The urban and rural landscape of Guangdong has undergone tremendous changes and people's lives have become better and better. He believes it is an inspiring success story for many developing economies.

SFC: This year marks the 75th anniversary of the founding of People's Republic of China. What do you think of the growth and resilience of the Chinese economy over the years?

Nguyen Viet Dung: Over the past 75 years since the founding of the People's Republic of China, Vietnam has witnessed Chinese people compose a magnificent chapter in China's revolution, construction and reform, attaining miraculous accomplishments. It is not easy to make an assessment of the development of the Chinese economy over the past 75 years in just a few words, however it is widely agreed that the growth and resilience of the Chinese economy has offered more opportunities and brought about a variety of experiences to developing countries in general and Vietnam in particular.

Firstly, over the past years, China’s reform and opening-up has realized significant achievements globally, continually overcoming various risks and challenges. In 2023, the total economic output of the country accounted for about 17% of the global total. From 2013 to 2023, China's average contribution to global economic growth exceeded 30%. Such data to some extend has proved the resilience of the Chinese economy against the unpredictable factors of external environment. And such growth has made China a major commercial partner of many countries, including Vietnam.

After decades of high-speed growth, China is now focusing on high-quality growth. By embarking on a high-quality development path that is innovation-driven, environmentally sustainable and increasingly open, China has continued to offer the world new growth momentum and opportunities. Therefore, both China and its partners will be beneficial in this transformation and continuous cooperation.

Secondly, the experience on how the Chinese economy transformed and thrived in three-quarters of a century offers valuable lessons for developing countries, especially Vietnam because both countries share many similarities in our progress of industrialization and modernization. Over the past 75 years, China has turned itself from a poor country into the world's second top economy, accomplished the first centenary goal, successfully established a moderately prosperous society in all respects, and historically eradicated absolute poverty. That’s why it is mentioned that, “The Vietnamese side highly values the great achievements China has achieved in the new period; believes that China-style modernization has opened up choices of paths and implementation plans for the autonomous development of developing countries.” in the Joint Statement on further strengthening the comprehensive strategic cooperative partnership between the two countries with “6 more direction” and building a Vietnam-China community with a shared future on the occasion of state visit to China by Party General Secretary and State President To Lam from August 18th to 20th  this year.

SFC: At present, China is steadily promoting high-quality economic development. In your opinion, which industries offer more opportunities for growth?

Nguyen Viet Dung: As China’s economy has matured, the Chinese Government has emphasized the need for high-quality economic development, and acknowledged the importance of embracing a new growth model that relies more on private consumption, services, and innovation to drive economic growth. 

Since 2015, China announced a plan named “Made in China 2025” to upgrade and modernize China’s manufacturing in 10 key sectors. This is an evidence of Chinese government’s strategy to make the innovation a top priority in its economic planning. Earlier, China has stated that we must increase innovation, cultivate and expand emerging industries, and plan future industries in advance in the face of a new round of technological revolution and industrial transformation. China also noted that “promoting new productive forces doesn’t mean neglecting or giving up traditional industries”. From this message, we understand that both traditional and newly-emerging industries play significant roles in maintaining the pace of China’s economic development, and I myself share this point of view.

Observers and economists also share the common view that China needs to create new “growth points”. Recent trends suggest that high-tech industries have seen remarkable growth, with sectors like AI and renewable energy showing exceptional promise. Rapid technological advancements are paving the way for several emerging industries to drive growth over the next decade and beyond, such as energy-efficient batteries, electric cars and solar panels.  The reason is clear, as we can foresee a growing need for sustainable innovation in the fight against climate change. This is where clean technology (clean-tech) comes in to meet up with the growing demand for environmentally friendly products, processes, and services. At the same time, China may continue research in revolutionary fields such as quantum technology, new materials, pharmaceuticals.

On the other hand, traditional industries, such as manufacturing and agriculture, are experiencing varying degrees of transformation through automation and digitization to enhance efficiency and sustainability. Thus, those industries will constantly offer opportunities for growth of developing countries like China and Vietnam.

SFC: Against the backdrop of increasing global economic uncertainties, China's foreign investment policy and market potential continue to attract the attention of international investors. How do you evaluate China's progress in improving its business environment? What are the attractions of the Chinese market for Vietnamese companies?

Nguyen Viet Dung: China and Vietnam have enjoyed a strong bilateral relationship since 1950, built on a long-standing friendship. In 2013, both countries declared a “comprehensive strategic partnership” which has led to growing cooperation in various fields. According to the General Department of Vietnam Customs, in 2023, China continues to be the largest trading partner as well as the largest import and second largest export market for Vietnam. In 2024, China remains the biggest importer of Vietnamese fruit and vegetables, accounting for 64% of the total export turnover with 2.1 billion US dollars in the first half, up 22% compared to the same period last year.

In terms of goods, Vietnam exports to China items such as mobile phones, components, electronic devices, rubber, agricultural products, seafood, and imports machinery, equipment, raw materials for the textile industry, leather and footwear, steel, construction materials and daily consumer goods.

China and Vietnam announced the Joint Statement which focused on enhancing economic collaboration this year, with particular emphasis on improving cross-border trade infrastructure and expanding investment opportunities. During the visit to China by Party General Secretary and State President To Lam from August 18-20 this year, two countries signed 14 agreements covered areas such as cross-border railways, agricultural products, and cooperation on local currency settlement.

It is noteworthy that the Vietnamese Ministry of Agriculture and Rural Development (MARD) and the General Administration of Customs of China (GACC) signed three important agreements, paving the way for the export of fresh coconuts, frozen durian and crocodiles to the Chinese market.

China affirmed that we are ready to increase imports of Vietnamese agricultural products and provide favorable conditions for high-quality farm produce of Vietnam to reach Chinese market. In addition, Party General Secretary and State President To Lam suggested that the two sides strengthen cooperation in areas where China has many advantages such as green economy and digital economy. In the future, we believe there is still much room for development in economic and trade cooperation between Vietnam and China.

SFC: From the perspective of bilateral trade, China is Vietnam's largest trading partner. Bilateral trade volume exceeded 200 billion US dollars for three consecutive years and reached 145.07 billion US dollars from January to July this year, an increase of 20.9% year-on-year. What are the main areas of China-Vietnam economic and trade cooperation? What are its characteristics?

Nguyen Viet Dung: China and Vietnam agreed to well implement the Plan on cooperation in promoting connectivity between the "Two Corridors and One Circle" framework and the Belt and Road Initiative in December 2023.

Earlier in October 2023, at the Belt and Road Forum for International Cooperation in Beijing, China stated to further open up the Chinese market to the world with an emphasis on free trade and expanding the digital economy. China announced major steps that China will take in pursuing “high-quality cooperation” with Belt and Road partners. China will also establish pilot zones for e-commerce cooperation, hold an annual Global Digital Trade Expo and expand traditional infrastructure projects. China also highlighted green infrastructure, energy and transportation as areas for deepening cooperation. And Vietnam recently also looks for more cooperation opportunities in above-mentioned areas.

I believe there is great potential of cooperation under the framework of the Belt and Road Initiative in the future. We welcome and will fully support the cooperation in the fields of road, bridge and railway infrastructure, clean electricity, telecommunications, and logistics.  

SFC: Ho Chi Minh City wants to become a promising investment destination for more Chinese investors, with a focus on strengthening cooperation in the fields of industrial transformation, digital transformation, smart city construction, green economy and clean energy. What do you think are the converging points of increasing cooperation in these fields and how can we complement each other and benefit each other?

Nguyen Viet Dung: China is in a stage of transition from low-end to higher-value-added industries, and this transmission brings both opportunities and valuable experience for developing countries.

For developing countries like Vietnam, we must continue to climb up the industrial ladder, from industries with low productivity to those with high productivity. At the same time, we also attach great importance to sustainable development and high-quality growth. That is the reason why Vietnam in general and Ho Chi Minh city in particular want to focus on newly-emerging industries, and strengthen cooperation in the fields of industrial transformation, digital transformation, smart city construction, green economy and clean energy.

As we embark upon the green transition, pursuit the development of green economy, clean energy, implement industrial transformation and digital transformation, China has so much to offer-commercial loans and investments, funding from Chinese policy banks, direct government aid, and technology transfer. As green development is a universal demand, China with its wealth of expertise can fit in to serve those needs. This is the most noteworthy converging point in these areas. Another converging point is that development in these areas will pave the way to environmentally and economically sustainable growth of our countries. In addition, I would like to emphasize the necessity to uphold a mutually beneficial and reciprocal approach for co-development. 

Regarding how they complement and benefit each other, digital transformation plays a significant role in steering green and sustainable innovation. The emergence of blockchain, big data, cloud computing, AI and other digital technologies has sparked a new wave of scientific and technological revolution and industrial change. As a result, this can enhance the dynamism of innovation and improve the distribution of green research and development resources, ultimately fostering green innovation in the pursuit of sustainable development.

In term of smart city construction, it represents an advanced stage of urbanization process and plays an important role in promoting green economic growth and sustainable development. While people increasingly migrate from rural to urban areas for jobs, health, and educational facilities. This trend severely affects sustainability through extensive use of energy, land and natural resources. As a result, there is an urgent need for constructing resource-saving and environmentally friendly smart cities. Therefore, smart city construction can promote urban green development via industrial structure and green technology innovation. In addition, it not only promotes urban green development locally but also contributes to urban green development in neighbouring regions as a spillover effect.

SFC : Guangdong Province is a large province of economy, population, manufacturing and foreign trade in China. Please talk about friendly relations and economic and trade cooperation between Vietnam and Guangdong Province. What cities have you visited in Guangdong Province and what have you learned? What is your impression of Guangdong's business environment and economic vitality?

Nguyen Viet Dung: Guangdong and Vietnam have close geographic, historical ties and long-standing traditional friendship. The province is a participant in and witness to the traditional friendship between China and Vietnam. 2024 also marks the 100th anniversary of our late President Ho Chi Minh's revolutionary activities in Guangdong. In August, Party General Secretary and State President To Lam chose Guangzhou as the first stop of his very first state visit to China as the head of the Party and State of Vietnam. This demonstrates the high regard of the Party and State of Vietnam for the long-standing traditional friendship with Guangdong’s Party Committee and its people.

In 2023, trade volume between Guangdong and Vietnam exceeded $48.2 billion, registering an increase of 7.9% and accounting for about one-fifth of the total trade between the two countries. In the first 10 months of 2024, the total import-export turnover between Vietnam and Guangdong reached 46.6 billion USD, an increase of 21% over the same period last year, accounting for 22% of the total import-export turnover between Vietnam and China.

Numerous cities of Guangdong are sister cities to Viet Nam’s localities such as Ha Noi, Ho Chi Minh City, Binh Duong, Can Tho and Hai Duong. Moreover, many Vietnamese localities choose Guangdong as a top destination for trade and investment. There have been fruitful exchanges and cooperation in smart city development, trade and investment, ecological and environmental protection, cadre training and other areas.

This stands as a vivid testament to the dynamic and tangible relations between Vietnam and Guangdong. It serves also as a significant foundation that couples the interests, consolidate and promote Vietnam’s ties with China and Guangdong in the coming time.

Before coming to Guangdong, I have known that Guangdong is a vibrant epitome of China's reform and development journey. Over the past 75 years since the founding of the People's Republic of China, and over the past 40-plus years of reform and opening-up, Guangdong has steadfastly pursued uninterrupted reform and relentless opening-up. 

During the last 5 months since I started my tour of duty as Consul General of Vietnam in Guangzhou, I have been to many cities in Guangdong, for example: Shenzhen, Foshan, Shantou, Zhanjiang, Yangjiang, Shaoguan, Heyuan and Yunfu. These trips have brought me the chances to witness the dynamism of Guangdong’s development, especially in digital transformation, green innovation and smart city construction. Guangdong’s urban and rural landscapes have transformed dramatically, and its citizens' lives have grown ever more affluent.

Guangdong’s evolution from a relatively underdeveloped agricultural province into one of the leading regions in economic size, openness, and innovation vitality in China is an inspiring success story for many developing economies. Therefore, during the visit to Guangdong in August, Party General Secretary and State President To Lam suggested that Guangdong and Vietnamese localities need to promote regular exchanges and cooperation; strengthen substantive cooperation cross the board, especially in trade, investment and strategic connectivity. He also expressed the welcome to enterprises of Guangdong province to expand high-quality investment in Vietnam in the fields of digital transformation, green growth and infrastructure.