Vietnam-China trade: Driving force from FTAs.

The impetus comes from FTAs.

2025 is a special year in the relationship between Vietnam and China as the two countries celebrate the 75th anniversary of the establishment of diplomatic relations (January 18, 1950 - January 18, 2025) and is also the "Vietnam-China Year of Cultural Exchange".

Notably, the telephone conversation on January 15th between General Secretary To Lam and General Secretary and President of China Xi Jinping marked an important and very positive start to the "Vietnam-China Humanitarian Exchange Year," demonstrating the high regard and top priority each side places on the relationship between the two Parties and two countries, and providing direction for effective cooperation between the two Parties and two countries in 2025 and the following years.

In recent years, economic , trade, and investment cooperation between Vietnam and China has grown positively and continuously reached new records. Photo: Can Dung

Vietnam and China are neighboring countries with a long-standing traditional friendship. The Party, State, and people of Vietnam value and consider the development of friendly neighborly relations and a comprehensive strategic cooperative partnership with the Party, State, and people of China as a consistent and long-term policy, a strategic choice, and a top priority in Vietnam's foreign policy.

In recent years, Vietnam-China cooperation has been continuously strengthened and enhanced. High-level and other exchanges and contacts have taken place frequently and in flexible forms. Economic, trade, and investment cooperation has grown positively and continuously reached new records. For many years, China has been Vietnam's largest trading partner, and Vietnam is China's largest trading partner in ASEAN and the sixth largest in the world. Other mutually beneficial areas of cooperation have continuously expanded and deepened, bringing practical benefits to the people of both countries.

Notably, trade relations between Vietnam and China have been strengthened through new-generation Free Trade Agreements (FTAs) or through cooperation frameworks in which both sides are members.

Currently, Vietnam has signed 17 free trade agreements, making it one of the most open economies (200% of GDP), creating favorable conditions for Vietnamese businesses to expand access and establish trade relations with more than 230 markets. Meanwhile, China is participating in 24 FTAs, of which 16 have been signed and implemented.

In 2003, Vietnam, together with ASEAN, signed the Framework Agreement on Comprehensive Economic Cooperation to establish a Free Trade Area (FTA) with China, and in 2020, the two countries also simultaneously signed and are implementing the Regional Comprehensive Economic Partnership (RCEP) Agreement.

These two FTAs, along with the establishment of a comprehensive strategic cooperative partnership between Vietnam and China in 2008, have strongly boosted the development of bilateral trade. In 2024, Vietnam and China, together with ASEAN countries, are promoting negotiations to upgrade the ASEAN-China FTA to version 3.0, aiming to open up even more economic and trade opportunities for countries in the region in general and the two countries in particular.

Since 2004, China has consistently been Vietnam's largest trading partner. Bilateral trade growth has been in double digits over the past decade. Currently, China is Vietnam's second-largest export market and its largest import market. With numerous advantages in economic and trade cooperation, trade between Vietnam and China has maintained stable and sustainable growth over the years.

In 2024, after the two countries upgraded their relationship, bilateral trade reached over $205 billion. Photo: Hai Hung

According to the General Department of Customs, in 2024, after the two countries upgraded their relationship, bilateral import and export turnover reached over 205 billion USD, marking the first time Vietnam established a record-breaking trade volume with the Chinese market, bringing bilateral trade turnover to an increase of more than 6,400 times (from 32 million USD to 200 billion USD) in over three decades since the normalization of relations in 1991.

In terms of trade relations, the issue of reducing Vietnam's trade deficit and stabilizing Vietnamese agricultural exports to the Chinese market has been gradually resolved. China has actively opened its doors to Vietnamese agricultural products, allowing them to penetrate deeper into its market. In 2022, the two countries successively signed protocols for the official export of durian, sweet potatoes, and bird's nests to China.

Currently, the two countries are promoting "hard connectivity" in terms of railways, highways, and border infrastructure; and "soft connectivity" in terms of smart customs and smart border crossings, aiming to facilitate and further enhance trade exchanges between the two sides.

Speaking at a reception commemorating the 75th anniversary of the establishment of diplomatic relations on January 17th, Chinese Ambassador to Vietnam He Wei stated that the two countries' infrastructure connectivity has many positive aspects, with cross-border economic cooperation zones and smart border gates being implemented smoothly, the project for three standard-gauge railway lines in northern Vietnam being rapidly promoted, and cooperation in emerging fields such as the digital economy and energy transition increasingly developing, with substantive cooperation being strengthened with high technological levels and quality.

Prioritizing the promotion of the "six more" in Vietnam-China relations.

According to the Ministry of Industry and Trade, bilateral trade between the two countries still has significant room for growth, based on numerous bilateral cooperation agreements, as well as multilateral trade agreements such as the ASEAN-China Free Trade Agreement (ACFTA) and the Regional Comprehensive Economic Partnership (RCEP). Therefore, upgrading the ASEAN-China Free Trade Agreement (ACFTA) will contribute to further boosting investment and trade.

Chinese direct investment in Vietnam has also increased sharply and continuously improved its ranking in recent years. To date, China has risen to become the third largest foreign investor in Vietnam, with a total registered capital of US$31.8 billion. The 2024 report on foreign investment attraction by the Ministry of Planning and Investment shows that China is the leading partner in terms of the number of new investment projects (accounting for 28.3%).

Vietnam-China relations are entering a new phase of development at a higher, deeper, and more substantive level. (Photo: Binh Duong)

Also on the occasion of the 75th anniversary of the establishment of diplomatic relations between Vietnam and China, the Ambassador Extraordinary and Plenipotentiary of Vietnam to China, Pham Thanh Binh, stated that now is a favorable time to promote the relationship between the two countries to enter a new stage of development at a higher, deeper, and more substantive level. Both sides need to focus on promoting and concretizing the high-level common understanding on deepening and elevating the comprehensive strategic cooperative partnership, building a strategically significant Vietnam-China Community of Shared Future in line with the "six more" orientation.

Accordingly, it is necessary to continue deepening substantive cooperation in various fields, achieving more concrete results. Strengthening the material foundation for bilateral relations, promoting investment and trade cooperation, expanding imports of goods, especially agricultural products from Vietnam; focusing on implementing large-scale projects that serve as new symbols of cooperation in Vietnam-China relations.

In particular, the deployment of three standard-gauge railway lines connecting the two countries (Lao Cai – Hanoi – Hai Phong, Lang Son – Hanoi, Mong Cai – Ha Long – Hai Phong) is considered the highest priority in strategic infrastructure connectivity cooperation between the two sides; expanding cooperation in areas where China has strengths and Vietnam has needs such as science and technology, innovation, digital transformation, green growth, clean energy…

In 2024, after the two countries upgraded their relationship, bilateral trade between Vietnam and China reached over $205 billion for the first time, bringing bilateral trade turnover to over 6,400 times (from $32 million to $200 billion) in more than three decades since the normalization of relations in 1991.

Source: https://congthuong.vn/thuong-mai-viet-trung-dong-luc-den-tu-cac-fta-370221.html