Asia Times: Business booming in Vietnamese border economic zones


	February 28, 2001	atimes.com

Southeast Asia

Business booming in Vietnamese border economic zones

HANOI - Cross-border trade has sparked a surge in economic activity in Vietnam's northern border regions, but experts are calling for more investment in local infrastructure to underpin future growth.

The value of bilateral trade between border economic zones (BEZs) and China rose to US$2 billion in 2000. Among the beneficiaries were the provinces of Lang Son, Quang Ninh, Lao Cai and Ha Giang.

Lang Son province took the lead in cross-border trade with last year's total volume of exports through its border gates estimated at $740 million. It boasts four international and national border gates, which bustle with commercial activity throughout the year. The number of local enterprises registered for import and export activities has reached 300.

Lang Son's tourism services earned over VND70 billion (US$4.8 million) last year, up by 13 percent over the previous year, with more than 1 million tourists.

For many years, cross-border trade has spurred Lang Son province's economy, driving growth in gross domestic product [GDP] to 10 percent a year, 34 percent of which was directly due to trade. The border gates and eight border markets have all contributed to the increase of retail trade.

Furthermore, cross-border trade exchanges have accelerated the restructuring of the provincial economic structure. The tourism industry has thrived as more people travel across the border for business and pleasure.

Some VND407 billion has been invested in building and upgrading infrastructure at Lang Son's border gates, including Dong Dang, Huu Nghi and Tan Thanh. The province has also enacted preferential policies to boost socio-economic development.

According to the deputy chairman of Lang Son People's Committee Doan Ba Nhien, the province has spent VND343 billion on different projects to boost border economic zones. Attention has also been given to curbing smugglers and trade fraud. But Lang Son's exports are unstable, as they mostly come from other localities, not from the province itself.

To lift exports of processed products, especially agricultural and forestry products like tea, rice, cassava, cashew-nut, coffee, fruit and vegetables, medicinal herbs, infrastructure must be constructed at border gates. Much investment has already occurred, but this has not met demand and there is a desperate need for warehouses, roads, ports, railways, telecommunications, electricity, water supplies, markets and hotels to further develop trade.

To boost trade activities across border gates, export regions must encourage more competition with goods produced by foreign rivals. Particularly, locally-made goods should be given priority.

According to statistics from the General Customs Department, year-on-year increase of cross-border trade turnover was up by 23 percent in Quang Ninh and 8.1 percent in Lao Cai. Since the Vietnamese government allowed pilot incentive policies, Lao Cai border gate trade has involved 676 units both outside and inside the province, whereas 187 Chinese units participate in the business.

Northern Ha Giang Province has four border gates at Sam Pun, Pho Bang, Thanh Thuy and Xin Man. Of these, Thanh Thuy is the main commodity allocation. For other gates, trade activities are facing obstacles due to traffic problem and infrastructure.

Quang Ninh province has two major frontier passes located at Mong Cai and Hoanh Mo facing China's Dongxing and Dongzhong points. Frontier passes lying in Hai Ninh District cover an area of 520 square kilometers embracing 12 communes, of which 10 communes have been approved by Hanoi as border economic zones, and Mong Cai township. Over the past years, Mong Cai Border Economic Zone has strongly expanded under a comprehensive development plan. Some VND100 billion have been spent on 63 infrastructure projects.

Mong Cai border gate in northeast Quang Ninh province, for example, is the unique one with the best infrastructure. Hence, trade activity is rampant in this area. The annual per-capita income averages rose from $370 to $420, and the number of poor households in the area fell considerably.

(Asia Pulse)

back to the top

©2001 Asia Times Online Co., Ltd.