During 1990s, feeling threatened by the radical transformation in the communist world, Vietnam sought a communist alliance with China against the threat of a perceived Western-instigated ‘peaceful evolution.’ Chinese and Vietnamese economic relations had brought a numerous improvement in the friendly corporations between the two nations, and it is initially practical benefits for both sides.
The Chinese’s investment “giant sucking sound,” (p.580) in the past decade had strengthen the economic relation between the two nations as well as created the impacts on Vietnamese’s socioeconomic development because of the uneven trading—Vietnamese import more from Chinese than export back to Chinese, because China has a high growth rate in economic development (as a WTO member), which means China has a bigger demand for energy, giving rise to the need of import materials from Vietnam, such as raw materials (coal, oil, rubber, iron), and agriculture products (food, tea..) has push up China to meet economic demand.
Moreover, the free-trade agreement between Vietnam and China have eventually helped to open up Vietnam access to the world, “free-trade agreement that has enabled Vietnam to become part of the vast global supply chain,” (p.581) which brought both advantages and disadvantages to Vietnam. Disadvantages:
- The combination of the lack enforcement, which leading to illegal importation from China, which is threat to local economy.
- Vietnamese companies lack of comparative advantages that Chinese companies have “consumptions need legal system.”
- Chinese products are cheaper and more diverse, which is a need of wider range of socioeconomic groups, particularly the low-income segment.
- Externalities: environmental impacts, like pollution generates from business activities and other negative consequences on sustainable development and poverty in Vietnam and become a serious threat to the health and lives of people, plants and animals. Chemical substances were used in the products like seafood and vegetable illegally. As a result it cause harmful effects on people as well as soil, water and air pollution.
Meanwhile, there are also some advantages brought to Vietnam within their relationship with China. “If China had not been there, Vietnam many not have opened up.” (p.581)
- Fast economic growth—Vietnamese products will have better access to Chinese as well as vice-versa.
- Vietnam exports to China have contributed the stability of Vietnam GPD.
- Competition: will be good for both Vietnamese manufacturers and consumers as it helps companies to improve themselves to produce better products and lower prices.
- Economically, China is a potential market, a source of financial assistance and a model of development.
“Hanoi is driving toward what its calls a “socialist-oriented market economy,” (581) that allowed private ownership of small business enterprises, and…