Vietnam-China economic relations

[Battle of Bach Dang River]

One of the reasons why I started this threat is to assess the economic costs if it comes to an armed confrontation between Vietnam and China. If a war breaks out, everything will come to a halt.

Well, if war occurs, the following problem will be stopped:
[BTW: It seems you are confused between a "thread" and a "threat"??]




Vietnam's trade deficit from China accounts for 23.2pct during 2001-2010 period

Vietnam's total trade deficit increased $1.2 billion to $18 billion during 2001-2008 period and then decreased to $12.4 billion by 2010, Truong Dinh Tuyen, former minister of industry and trade, said at the seminar held on April 10 on impacts of international economic integration to Vietnam's economy and trade together with policy recommendations for implementing the export and import strategy during 2011-2020 period and orientation till 2030.

Vietnam's trade deficit from China accounts for 23.2pct during 2001-2010 period



Vietnam’s trade deficit from China at nearly $13.5b in 2011

As reported by the general Department of Vietnam Customs, Vietnam’s export turnover to China in 2011 reached $11.12 billion, up 52 percent on year.

Meanwhile, the country’s import spending from China was $24.59 billion in 2011, up 23 percent on year.

Thus, Vietnam’s trade deficit from China in 2011 was $12.47 billion, rising 6 percent year-on-year.

In comparison with Vietnam’s trade deficit to all economies in the world ($9.8 billion), the country’s trade deficit from China was higher 1.4 times and the ratio was 1.3 times in 2010.

Some commodities posted high import value from Chinese market such as machineries, equipments, instruments and components ($5.2 billion, rising 17 percent on year and accounting for 34 percent of the country’s total import value for this item), cloth ($2.8 billion, up 23 percent and accounting for 42 percent), computer, electronics and spare parts ($2.4 billion, up 41 percent and accounting for 30 percent), telephone and components ($1.7 billion, up 54 percent and accounting for 65 percent) and petroleum ($1.3 billion, up 22 percent and accounting for 13 percent).

In addition, Vietnam also incurred trade deficit with Thailand ($4.6 billion), Malaysia ($1.1 billion), and Japan ($30 million).

Conversely, Vietnam enjoyed a trade surplus of $12.3 billion to the US market (mainly for products such as footwear, seafood, ceramic products and wooden products) and Cambodia at $2 billion.

Vietnam’s trade deficit from China at nearly $13.5b in 2011 - Intellasia East Asia News

 

[Viet]

Well, if war occurs, the following problem will be stopped:
[BTW: It seems you are confused between a "thread" and a "threat"??]

...

oh, you are right. Thread.

 

[gpit]

[/B]

You say, Vietnam pays the same like the ordinary people in Guangxi. Do not understand your point why China makes loss here?
Vietnam is currently contructing many Nuclear Power Plants. Maybe we will sell some surplus to China with a friendly price when completed

Anyway I am happy to see that both countries have their power grids interconnected, so one can sell/buy their surplus or deficit.

Friend, what I am saying is that the Chinese sell you electricity perhaps at loss, as their lowest price is 0.538 Yuan/kWh:

第一档电量:每户月用电量≤190度部分，此档电量电价维持现行水平（每度0.538元）不提价

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and if they use more, the price will be even higher.

Yet they sell you only at only 6.08 US cent/kWh, which is about 0.39Yuan/kWh.

I don't know why.

Nuclear electricity is generally more expensive. If I am not wrong the price goes up from hydro (lowest), to coal, to nuclear, to solar(highest).

 

[Battle of Bach Dang River]

Friend, what I am saying is that the Chinese sell you electricity perhaps at loss, as their lowest price is 0.538 Yuan/kWh:



and if they use more, the price will be even higher.

Yet they sell you only at only 6.08 US cent/kWh, which is about 0.39Yuan/kWh.

I don't know why.

Nuclear electricity is generally more expensive. If I am not wrong the price goes up from hydro (lowest), to coal, to nuclear, to solar(highest).

You forget this:

Vietnam is currently buying electricity from China at the price of 1,300 dong/kWh (6.08 US cents), while the electricity price from local small hydropower plants is about VND800-900 dong/kWh; coal-fired thermo power plants at VND1,280-1,300 /kWh; and oil-fuelled power plants at VND5,500-6,000/kWh, said the Ministry of Industry and Trade in early June.
In 2011, Vietnam bought electricity from China at the price of 5.8 US cents/kWh.
With the new pricing mechanism, electricity prices from China are higher than the electricity prices from local small hydropower plants by VND400-500 /kWh.

 

[NewCastle2012]

I am not sure but maybe local power planets don't have enough capacity to meet the demand.

You forget this:

 

[Battle of Bach Dang River]

I am not sure but maybe local power planets don't have enough capacity to meet the demand.

Ironically, current EVN is asking small local power plants (private, thousands of hydropower plants of this type) forced to limit the number of generator operating hours in every year.
Perhaps the reason is EVN has signed a contract with China from the previous years. The contract has a clause if EVN not buy all electricity which were registered then it will be fined by contract.
The small local hydropower plants are bearing losses because of generator operating hours in a year too little.

This will end when EVN is not a power supply exclusively in 2022.

 

[Viet]

Trade deficit is not necessary a bad thing, especially for a smaller newly developing nation. It invests heavily to buy high tech and industrial equipments and builds factories and infrastructures in the beginning. Jobs are created for the meantime and in a few years these factories are producing more products and building more factories, hence create more jobs. And so on....

There is no need to afraid of trade deficits as long as you have the right people to oversee the big picture.

I agree. But trade deficit is a very bad thing in a long run. Vietnam got problem to increase Forex, and of course it faces problem to finance all of these imported goods.

 

[Viet]

Vietnamese tourism in China slows
Last Updated: Wednesday, August 01, 2012 09:00:00

The number of Vietnamese visitors to China declined by 20-30 percent in the past two months, due to the current economic crisis and the recent tension in the East Sea, VnExpress reported Tuesday.

Tran Van Long, the director of Viet Media Travel, was quoted as saying that the number of customers booking tour packages to China with his company decreased some 30 percent in June and July.

In the past, Long said between 300-350 customers booked tours to China every month. But, recently, that number has dropped to around 100.

Though the autumn is considered the best time to go, he added, so far only three or four groups have booked trips to China.

Saigon Tourist has only booked about 650 tours to mainland China this summer--a year-on-year drop of nearly 30 percent, said the company's spokesperson Doan Thanh Tra.

The decline was most pronounced for those traveling on the state budget, she noted, adding that the number of tourists to Hong Kong and Macau increased during the same period.

Nguyen Thi Huyen, director of Vietran Tour, attributed the decline to the economic crisis where people had to tighten their spending, according to the VnExpress report.

Several tourists, however, attributed changes in their travel plans to the recent tension in the East Sea.

Thu Huong, who lives in Hanoi's Dong Da District said her family just returned from a tour to Guangzhou and Shenzhen. Initially, their party had included a number of relatives who later decided to travel to Singapore-Malaysia, instead, citing concerns about the political tension.

Vu The Binh, chairman of Vietnam Tourism Association, argued that the decline was “normal” given the current economic difficulties, high visa fees (US$60 per application) and complicated procedures.

The price of many Chinese tours were out of the reach for most normal Vietnamese people, he said.

“The East Sea tension between the two countries is also a factor, because tourism is very sensitive to political turmoil, but it was not the main reason for the recent decline,” he said.

But “if the East Sea remains tense, it will affect tourism more strongly and seriously,” Binh stressed.
According to VnExpress, the number of Chinese tourists to Vietnam has also declined.

In fact, statistics put out by the Vietnam National Administration of Tourism showed that 79,000 Chinese tourists visited Vietnam in June--a 32 percent drop from the same period last year. That figure was 90,700 in July, a 13 percent drop in the number of Chinese tourists welcomed in 2011.

Luu Duc Ke, director of Hanoi Tourist, attributed the decline in Chinese tourism to economic factors.

Vietnam latest news - Thanh Nien Daily | Vietnamese tourism in China slows

 

[Viet]

First Sino-Vietnam expressway expected to open in 2013
(Xinhua) 08:09, June 11, 2012

KUNMING, June 10 (Xinhua) -- The first expressway linking southwest China's Yunnan Province and Vietnam will open to traffic next year, local authorities confirmed Sunday.

The 600-km journey from Kunming, provincial capital of Yunnan, to Hanoi, capital of Vietnam, will be reduced to six to seven hours from 12-plus hours, according to the provincial communication department of Yunnan.

China and Vietnam will be connected by expressway once construction on a 250-km expressway is finished in Vietnam, and linking the countries via expressway will greatly reduce transportation costs and boost the regional economy.

China and Vietnam started upgrading local expressways and roads to connect the cross-border expressway in 2008 and 2009, respectively, the department said.

The expressway is part of Yunnan's Bridgehead Strategy, which aims to build a social and economic corridor toward South Asia and Southeast Asia. The mountainous province borders Myanmar, Laos and Vietnam.

Three other cross-border highways leading to Thailand, Myanmar and India are also under construction.

 

[gpit]

You forget this:

No I didn't.

If you have 400dong/kWh electricity, but you can only satisfy 1% of your demand, and the rest of your electricity has higher price, the weighted average price of your electricity may still be higher than China's.

Just from this instance, we can all see that you lack basic skill of data analysis. Serious.

You need to understand the concept of weighted average in math. That is the real pricing nature of your electricity.

My question is still: what motivates the Chinese to sell electricity below their market price to you Vietnam?

 

[gpit]

Well, if war occurs, the following problem will be stopped:
...

If war happens, what you listed is a peanut gain for Vietnam compared to other huge losses.

BTW, in terms of trade deficit, China has a huge appetite for your goods but your inane government just can't help your people to produce them to meet the Chinese needs. Your government spends its energy on fanning up hatred against China, not on producing more products - complain yourselves.

Chinese market also “hungry for Vietnamese goods”

 

[Viet]

Vietnam Rice export to China 2012
Thứ tư, 15 Tháng 8 2012 03:43
...
The domestic price of rice in China is also higher than in Vietnam, so Vietnamese businesses still have opportunities to ship rice to this market. China has signed contracts to import 1.2 million tonnes from Vietnam since the beginning of this year. Of the total, 900,000 tonnes have been delivered.

RoK, Japan import Vietnamese rice again

 

[Viet]

China completes railway link to ASEAN countries
Updated: 2012-08-16 08:17 By Xinhua in Tonghai, Yunnan (China Daily)

Construction workers on Tuesday laid the last piece of a railway that will link southwest China's Yunnan province with the Association of Southeast Asian Nations countries.

The Yuxi-Mengzi Railway has a total length of 141 km with a designed maximum speed of 120 km per hour. It passes through 35 tunnels and crosses 61 bridges, which together account for 54.95 percent of the line's total length.

The railway is part of the eastern line of the planned Pan-Asia Railway network, an international railway project that will also consist of central and western lines.

Funded by the Chinese Ministry of Railways and the Yunnan government, the railway has a total investment of 4.5 billion yuan ($ 707.4 million).

The railway is expected to become operational later this year and will boost land transportation between China and ASEAN countries. The eastern route is designed to start in Kunming, capital of Yunnan, and pass through the cities of Yuxi, Mengzi and Hekou in Yunnan to connect with Vietnam, Laos, Thailand and Singapore.

Construction in Yunnan of the eastern line's last section, which will link Mengzi with the border city of Hekou, is going to plan, likely enabling the Sino-Vietnamese railway to become operational first in the Pan-Asia Railway network, said a local railway official.

The new line will be a modern replacement of the 100-year-old line that links Kunming with Haiphone of Vietnam, the first transnational railway in Southwest China, said Han Zhongping, deputy director of the Kunming railway bureau.

The 854-km Kunming-Haiphone line has a designed maximum speed of only 30 km per hour. It is the world's longest "narrow" line - one meter wide, compared to the standard 1.435-meter width.

Meanwhile, construction of several sections of the other two lines and also of lines linking major domestic cities like Shanghai is also under way. Lu Dongfu, vice-minister of railways, said the huge investment on railway construction in Yunnan has major significance at a time when the country's railway investment is recovering.

The projects in Yunnan will become part of the national strategy to open up the southwest and spur economic growth in ethnic group regions, according to Lu.

The robust construction is pushing the mountainous border province to the forefront of opening-up, said Liang Gongqing, head of the provincial railway construction inspection team. Railway investment over the past eight years totalled 53.7 billion yuan, he added.
The expanding network will bring Yunnan closer to other parts of China and also provide a more efficient and convenient passage for exchange and trade with southeast Asia, Han said.

 

[ahfatzia]

I agree. But trade deficit is a very bad thing in a long run. Vietnam got problem to increase Forex, and of course it faces problem to finance all of these imported goods.

For a newly developing nation where she invests heavily on physical and people infrastructure with borrowed money at the beginnings should have negative trade balances in the first few years and within ten years must have a handsome surplus so that loans can payback. If that goal can not be reached by then there must be something wrong with governmental policies and or mismanagement.

It's also very important for the government to handle her budgets well too and spends on where's needed and eliminates wastes. The one thing that usually dooms a country, which happens more often than not for a new nation, and that's corruptions.

 

[Viet]

My question is still: what motivates the Chinese to sell electricity below their market price to you Vietnam?

I believe I answered to your question already, but now my answer is gone.
So a new try:
I assume, China wants a market share, so it accepts losses for a while. That´s not unsual.