Premier Li sees opportunities despite dispute

[StarCraft_ZT]

China and Vietnam should properly handle sea disputes and convert challenges into cooperation opportunities, Premier Li Keqiang told his Vietnamese counterpart on Monday.

Li made the remarks in Nanning, the Guangxi Zhuang autonomous region, on Monday, a day before the opening of the 10th ASEAN-China Expo.

China is willing to work with ASEAN to build an "upgraded version" of the China-ASEAN free trade area, he said.

Leaders attending the expo will include Cambodian Prime Minister Hun Sen, Laos' Prime Minister Thongsing Thammavong, Vietnamese Prime Minister Nguyen Tan Dung, Myanmar President Thein Sein, Thai Prime Minister Yingluck Shinawatra and Singapore's Deputy Prime Minister Teo Chee Hean.

China and ASEAN should "maintain the right direction of East Asia cooperation" against the backdrop of a slow recovery of the world economy and of new challenges facing emerging market countries, Li said when meeting his counterparts on Monday.

In recent years, the Philippines and Vietnam have tried to put the South China Sea issue onto the agenda of a series of ASEAN meetings to attract global attention on their claims over some islets. China and Vietnam are both developing economies and "their common interests far outnumber the divergence between them", Li told Nguyen Tan Dung.

"The two sides should boost dialogue and communication, properly manage and control disputes, seek to convert challenges on maritime issues into opportunities for cooperation, and create favorable circumstances for bilateral cooperation on major projects," Li said.

Diplomatic communications have been maintained between China and Vietnam over the South China Sea issue, and the Chinese premier is sending a signal that the maritime issues "are not expected to ruin the big picture of regional cooperation", said Yang Baoyun, an expert on Southeast Asian studies at Peking University.

"It is a wiser choice for Vietnam to expand cooperation with China rather than making trouble at a time when its domestic economy is also facing challenges," Yang said.

Nguyen Tan Dung echoed Li's proposal for properly handling maritime issues, and he said Hanoi has always placed the highest diplomatic priority on the relationship with Beijing.

Ruan Zongze, vice-president of the China Institute of International Studies, said one of the recipes for converting maritime challenges into opportunities is the better use of the China-ASEAN Maritime Cooperation Fund.

"China provided 3 billion yuan ($490 million) for the fund, and there is great room to boost the efficiency of utilizing the fund for cooperation, including search and rescue," Ruan said.

China and ASEAN established a strategic partnership in 2003, and the two announced the start of a free trade area in 2010. Li said the relationship has become "a role model" of neighborly friendship and cooperation.

ASEAN has gradually realized that its meetings are not intended for bickering about maritime disputes, and relevant disputes in the South China Sea should only be discussed "within the scope of bilateral reconciliation" between contending parties, said Qi Jianguo, former Chinese ambassador to Vietnam.

By the end of June, China's direct investment in ASEAN totaled nearly $30 billion, and direct investment from ASEAN into China exceeded $80 billion.

China was the largest trade partner for ASEAN, and the region was the third-largest trade partner for China. China-ASEAN trade topped $210 billion in the first half, growing 12.2 percent year-on-year.

Beijing vows to achieve an updated version of the China-ASEAN free trade area and establish a platform for Asian infrastructure investment and funding, Li said.

Boosting "connectivity" in the region became a catchphrase during the Chinese premier's meeting with his counterparts on Monday.

"To explore a better performance of the free trade zone, road construction projects are expected to be implemented to facilitate the logistics sector and business travel, and better information connectivity is also on the agenda," Yang said.

 

[Viet]

Ha ha ha...China foreign policy is so predictable. You see that Vietnam (along with Singapore, Brunei and Malaysia) steps up the negotiation with the US led TPP (Trans-Pacific Strategic Economic Partnership), hence China wants to lure Vietnam for a closer cooperation, because you fear losing influence on Vietnam, and in the long term others in the region.

It is understandable, the strategic interest of China is to keep dominance on ASEAN. Well, that is something Vietnam does not want to see. Closer cooperation is good for all of us, but nobody wants Chinese hegemony.

Trans-Pacific Strategic Economic Partnership - Wikipedia, the free encyclopedia

 

[StarCraft_ZT]

Ha ha ha...China foreign policy is so predictable. You see that Vietnam (along with Singapore, Brunei and Malaysia) steps up the negotiation with the US led TPP (Trans-Pacific Strategic Economic Partnership),

Yeah, TPP covers a wide range across Asia Pacific. But for now, everything is just a framework, since many countries are still negotiating or considering whether to participate. I can image how difficult it is to integrate so many countries with totally disparate development period together. One more world, TPP cannot guarantee Vietnam's prosperity. Do you really hope such a unconsolidated group without any specific rules or policies to save your economy?

hence China wants to lure Vietnam for a closer cooperation, because you fear losing influence on Vietnam, and in the long term others in the region.

No offense, you should say the whole ASEAN rather Vietnam only.

It is understandable, the strategic interest of China is to keep dominance on ASEAN. Well, that is something Vietnam does not want to see. Closer cooperation is good for all of us, but nobody wants Chinese hegemony

True, clearly China-ASEAN has more economic feasibility than the TPP under loooooong negotiation.

 

[Viet]

@StarCraft_ZT

Vietnam suffers huge trade deficit with China (US$16 billion), while enjoys surplus with North and South America (US$15 billion). So it is clear which way Vietnam will prefer.

 

[xunzi]

@StarCraft_ZT

Vietnam suffers huge trade deficit with China (US$16 billion), while enjoys surplus with North and South America (US$15 billion). So it is clear which way Vietnam will prefer.

The benefit is not a simple evaluation of plus/minus on export. The benefit is in total trade volume for export/import. You must admit that importing China low-cost good/service improved the livelihood of your people. This is a fact. While export deficit caused by to many reasons, one is the lack of competitiveness in your country technological base and two is the consumption base of your country is too high for their available income. Vietnam technically is a consumption-base economy. Within the next 10 years, with China economic model shift to consumption base, there will be many opportunities for Vietnam to export to China as the demand for Vietnamese agriculture products rise and perhaps if Vietnam technological development improves, you can export electronics components like the Phillippines.

 

[Viet]

Actually the proposed upgrade of China-ASEAN relationship only benefits China. The trade deficit of Vietnam will increase, our domestic market will be further flooded with Chinese products. Vietnam economy continues to suffer, while China cements her dominance in the region.

That is not a fair game.

 

[xunzi]

Actually the proposed upgrade of China-ASEAN relationship only benefits China. The trade deficit of Vietnam will increase, our domestic market will be further flooded with Chinese products. Vietnam economy continues to suffer, while China cements her dominance in the region.

That is not a fair game.

Go learn Economics 101 and not washing time our time explaining to you how economy works.

 

[Viet]

Go learn Economics 101 and not washing time our time explaining to you how economy works.

First Vietnam agrees with America to conclude the TPP negotiation at the end of the year. The Asia-Pacific free trade pact is expected to take shape next year.

Second we expect more surplus in trade as well as more investments from America and Pacific regions. Trade with China sucks, it mostly benefits you and has negative impact on Vietnam economic development. That is the fact. Economics 1*1.

 

[xunzi]

First Vietnam agrees with America to conclude the TPP negotiation at the end of the year. The Asia-Pacific free trade pact is expected to take shape next year.

Second we expect more surplus in trade as well as more investments from America and Pacific regions. Trade with China sucks, it mostly benefits you and has negative impact on Vietnam economic development. That is the fact. Economics 1*1.

It won't be easy for Vietnam to join the US's leg TPP. There are stipulations in each trade clause that favorable to some and unfavorable to others. It won't be easy to say conclude this year and an agreement is signed next. It will take yearssss to negotiate. In each and every case, you can bet your life on it that the US won't sign any agreement that doesn't benefit the US's ailing economy. This means the US will not allow "developing" economy (and yes, that include Vietnam) to benefit from this agreement by exporting to USA without huge obligation from Vietnam, especially abiding to intellectual property rights, rule of laws, and human rights. Regarding intellectual property obligation in the TPP, if Vietnam cannot copy American technology, how are your poor technological base industry will ever grow? Are you happy with Vietnam shipping low-value products forever? These are questions that will make negotiation extremely difficult to resolve. On the plus side, Vietnam will benefit from the TPP short-term. You get to ship low-value items to USA at low tariff or any import duty tax but Vietnam will be force to abide by strict rule that the US set to protect its industrial prowess and that is intellectual property rights.

Now, whether your country join TPP is none of my concern and certainly China couldn't give a crap about it. Fact is your country is part of a huge ASEAN trade with China and ASEAN is ONLY the 3rd biggest trade partner for China. So with or without Vietnam trade, it won't hurt China one bit. However for Vietnam to disengage and cut off China trade, you lose potential 1.3 billions market size to export and any potential deep pocket China Inc. from investment. The RCEP is a much better prospect than TPP. Go learn more about TPP and trade before responding back to me. Thank you.

 

[Viet]

@xunzi

You are right in assessing difficulties Vietnam faces if joining the US led free trade pact TPP. I don´t deny any, neither want to go to details. As VN incurs high trade deficit with China, we only have few options. Increasing VN competitiveness requires years. China economy is probably 15 years ahead of VN. To catch up in a short term is impossible. The higher growth rate of China as well as suspected China closed door policy for Vietnamese products (amid sea dispute) don´t make things easier for us.

So what is the option for Vietnam?

Sure, there are many details needed to be considered and discussed before deciding. Benefits vs. disadvantages. But I believe you missed the main point here: actually the reason for VN to join the TPP is rather politics than economics. Similar to the decision of Vietnam to join Russian led free trade pact Customs Union. Yes, it is a political will.

The question is NOT to choose either China, ASEAN or others, but China, ASEAN as well as TPP and Customs Union. Vietnam does not like to be too much dependent on China or one key partner. That is what really drives Vietnamese foreign policy. Step back, look at the history and you will understand.

http://en.vietnamplus.vn/Home/VietnamCustoms-Union-FTA-negotiations-progressing/20136/36030.vnplus

Minister of Industry and Trade Vu Huy Hoang and Minister for Trade of Asia – Europe Economic Committee, Mr. Andrey A. Slepnev were signing Joint Statement on FTA negotiation between Vietnam and Customs Union On March 28th, 2013

 

[xunzi]

@xunzi

You are right in assessing difficulties Vietnam faces if joining the US led free trade pact TPP. I don´t deny any, neither want to go to details. As VN incurs high trade deficit with China, we only have few options. Increasing VN competitiveness requires years. China economy is probably 15 years ahead of VN. To catch up in a short term is impossible. The higher growth rate of China as well as suspected China closed door policy for Vietnamese products (amid sea dispute) don´t make things easier for us.

So what is the option for Vietnam?

Sure, there are many details needed to be considered and discussed before deciding. Benefits vs. disadvantages. But I believe you missed the main point here: actually the reason for VN to join the TPP is rather politics than economics. Similar to the decision of Vietnam to join Russian led free trade pact Customs Union. Yes, it is a political will.

The question is NOT to choose either China, ASEAN or others, but China, ASEAN as well as TPP and Customs Union. Vietnam does not like to be too much dependent on China or one key partner. That is what really drives Vietnamese foreign policy. Step back, look at the history and you will understand.

Vietnam-Customs Union FTA negotiations progressing -- Vietnam+ (VietnamPlus)

Minister of Industry and Trade Vu Huy Hoang and Minister for Trade of Asia – Europe Economic Committee, Mr. Andrey A. Slepnev were signing Joint Statement on FTA negotiation between Vietnam and Customs Union On March 28th, 2013

I am fully aware that Vietnam engaged in multiple free trade coalition pact to maximize its economic potential growth. That is what Japan strategy, too so China has paid attention to this phenomenon very carefully. China does not oppose anyone from doing so as it is none of our business.

Now, to answer your concern about deficit trading with China. You have to be reasonable here. I believe I've explained to you the reasons for why trade deficit and it is not China's fault but your government first due to the focus on domestic consumption growth strategy since China-Vietnam bilateral trade started in the 1990s to 2012. Now as to lower this trade deficit and create a favorable environment for Vietnam to develop, China had agree to invest more in Vietnam at the urge of Vietnam government and it is one of the major agenda being put on the table when Vietnamese President visited China for talk in June of this year. From this talk, China also agreed to create favorable conditions for the import of Vietnamese tropical farm product and seafood to penetrate China market in the course of a shift in China's domestic consumption led model. This very example displays China flexibility for narrow Vietnam trade deficit gap. Now, does Vietnam have the economic strategy and model in place to utilize this advantage for the next 20 years during this momentum that caused by China's economic model shift? Like I said, total trade volume is a much more important key factor in determining economic tie than a few one way trade metric like export.