Oct. 15 (Bloomberg) -- Vietnam pledged to boost “political trust” with China during Premier Li Keqiang’s visit, as the two Communist countries focus on building economic ties and calming territorial tensions.
Li, who arrived in Vietnam Oct. 13, and Prime Minister Nguyen Tan Dung pledged to cooperate in all fields, including growth and trade, according to a posting on the Vietnam government’s website, even as they remain in dispute over waters in the South China Sea rich in fish, gas and oil.
The two signed a memorandum of understanding for a cross-border economic cooperation zone and agreed to open trade promotion offices, the posting said, as the countries aim to boost two-way trade to $60 billion by 2015. Dung also accepted an invitation to visit China.
Li’s visit, the first since China’s leadership change, “has great significance in boosting and strengthening political trust and comprehensive strategic partnership between the two countries,” the Vietnam government said on its website. “Since the relationship was normalized in 1991, friendship and cooperation between Vietnam and China has developed fast, deeply and widely in all fields.”
A race for resources in the South China Sea, and a broader push for influence in the region, has the bigger powers looking to shore up relationships with smaller countries, with Chinese President Xi Jinping visiting Indonesia and Malaysia earlier this month. Dung warned at a forum in Singapore in late May that miscalculations over territorial spats in the waters could disrupt “huge” trade flows and have global consequences.
The two sides agree to “well manage” sea disputes and refrain from complicating or expanding conflicts, according to a joint statement posted on Vietnam’s government website today. Vietnam reiterated it will not seek official relations with Taiwan, the statement said.
The two nations agree that strengthening their partnership and working to resolve existing issues would be beneficial to regional peace and stability, according to the statement.
“The two sides need to keep the situation in control and patiently resolve disputes using peaceful measures,” said Vietnam President Truong Tan Sang at a meeting with Li, according to a posting on the government’s website yesterday. The two nations need measures that “are acceptable for both and don’t affect each country’s stance,” he said.
Li also met with Vietnam Communist Party General Secretary Nguyen Phu Trong and National Assembly Chairman Nguyen Sinh Hung yesterday.
Two-way trade between Vietnam and China was $41.2 billion in 2012, according to a separate posting Oct. 13 on the Vietnam government’s website. Vietnam’s exports to China were valued at $12.4 billion and imports at $28.8 billion last year, it said, while in the first 8 months of this year two-way trade was $31.8 billion.
The leaders agreed to establish a working group to explore joint sea projects, according to the posting, which did not elaborate on the location of possible development. The Philippines and Vietnam have rejected China’s map of the sea, first published in the 1940s, as a basis for joint exploration of oil and gas.
The talks between China and Vietnam will help “maintain sound, sustainable development of bilateral relations conducive to peace and regional stability,” Chinese Foreign Ministry spokeswoman Hua Chunying said at a briefing in Beijing yesterday. The new joint working group on maritime development is “an important breakthrough,” Hua said.
In March, China fired on a Vietnamese fishing vessel, sparking a protest from the government, and it has used patrol ships to disrupt hydrocarbon surveys by the Philippines and Vietnam. China pledged last week to avoid escalating tensions while it works with Southeast Asian nations on a code of conduct for the waters, reflecting the softer tone it has adopted in recent months.
“The overall bilateral relationship has gotten worse in the past three years, mainly due to the increasing tensions in the South China Sea,” said Le Hong Hiep, a lecturer at Vietnam National University in Ho Chi Minh City. “The leaders have been making attempts to minimize the negative impacts of the disputes on the overall relationship,” Hiep said in an e-mail.
The two countries will make use of a newly created hot-line to defuse territorial spats, according to the posting.
Speaking at the Asia-Pacific Economic Cooperation Forum meeting in Bali last week, Xi said “the Asia-Pacific is a big family and China is a member of this family.” “China cannot develop in isolation from the Asia-Pacific, while the Asia-Pacific cannot prosper without China,” Xi said.
Vietnam and China will expand financial and monetary cooperation, encourage financial institutions on both sides to support trade and investment projects and enhance both nations’ ability to prevent financial and monetary risks, according to the Vietnamese government.
China Southern Power Grid, in partnership with Vietnam National Coal-Minerals Industries and China Power International, is to receive an investment certificate to build a $2 billion power plant located in the central province of Binh Thuan during Li’s visit, the Vietnam Investment Review reported yesterday, citing an unidentified official with the Ministry of Industry and Trade.
To contact the editor responsible for this story: Rosalind Mathieson at email@example.com