Crop production companies in Vietnam grow foodstuffs such as rice, sugarcane, coffee, tea, vegetables, melons, fruits and cashew nuts and employ about half of the country’s population while manufacturing accounts for roughly 8% of employment.
Once the most important economic segment in the country, the output value of agriculture, was surpassed by both manufacturing and services in the early 1990s and has continued to wane ever since without too many bright spots.
The Chinese market has in large part laid out the welcoming mat for Vietnamese agriculture faced by troublesome food safety regulations and scrutiny elsewhere in more lucrative markets like the US, EU and Japan where language barriers compound their lack of ability to compete effectively at a profit.
Hardly a day goes by without another Vietnamese-China initiative being announced, say the experts, whether it’s new investments, joint ventures, trade conferences or delegations.
In August this year, another Chinese delegation of some 100 businesses staged the 6th Zhejiang Export Fair in Hanoi exploring yet further opportunities for commercial trade and investment.
To Ngoc Son of the Ministry of Industry and Trade, said the Zhejiang Export Fair is one of the biggest annual trade fairs in the entire Southeast Asian region and represents a useful source for investment, especially in higher tech agriculture.
Mr Son, who is the assistant head of the Ministry Asia Pacific Department, noted that plans are underway for Vietnam to put on its first trade expo in the Chinese city of Hangzhou later this year as part of a concerted effort to raise the level of investment in Vietnam from China.
China has not been a big foreign direct investor in Vietnam in the past, said Nguyen Duc Thanh, director of the Institute for Economic & Policy Research. However, he noted that large chunks of the country’s infrastructure projects – including ports, railway lines and tunnels – are being carried out by Chinese companies these days.
He added that Chinese machines and equipment are imported into Vietnam in massive quantities as well. Estimates are that as much as 80% of all engineering, procurement and construction contracts are filled by Chinese contractors.
The rise of China and its adoption of an outward looking policy of investments and cooperation could have as much of an impact on the Vietnamese domestic economy as did the massive capital influx into Vietnam from chiefly the ROK.
But in the high-tech sector, say the experts, the Chinese presence has not yet translated to the same enormous presence such as that of Samsung and LG Electronics as of now— but Vietnamese companies are fielding more and constant inquiries from Chinese local government and private investors.
When you start seeing Chinese names on the sides of buildings in Hanoi, Ho Chi Minh City and Danang, you’ll know they have really arrived en masse. That’s still a long way off but getting closer every day.