These are the contents of the research titled "Scientific Basis for the Formation and Development of Cross-Border Economic Zones in Vietnam" (KX.01.09/16-20), which is chaired by Assoc. Dr. Nguyen Anh Thu (VNU University of Economics and Business). The research presents theoretical foundations and international practices of establishing and developing CBEZs; evaluates the policy and status of border economic cooperation and development of border gate economic zones in Vietnam; and assesses the conditions for establishing and developing CBEZs in Vietnam.
Agreed perspectives
on CBEZ
In
this research, CBEZ is defined as an economic cooperation zone aimed at
facilitating trade and investment, with an emphasis on cooperation and policy
alignment between two sides. CBEZ is not always a shared zone between two
countries, with an executive agency and a single policy, but might be two
distinct zones that are planned with mutual benefits, collaboration, and policy
harmonization between both parties in mind. This perspective is significantly
broader than the Chinese-proposed model of cooperation, which is based on
"two countries and one zone, free commerce, closed operation." The
convergence of views on a broader and more flexible definition of CBEZ will
make this model more practical, particularly in terms of sustainable
development and safeguarding socioeconomic and national security concerns. With
this perspective, the CBEZ concept will be one of "two zones, two
countries," and in Vietnamese it should be named as "cross-border
economic zone."
The
construction of a CBEZ is therefore necessary and beneficial in order to
increase cross-border trade in commodities, services, investment, and labor,
consequently boosting the economies of border provinces and improving the lives
of border residents. CBEZ, if it truly results from mutually beneficial
collaboration between two nations, will boost the border provinces' strengths,
contribute to regional, inter-regional development and product value chains, as
well as strengthen the country's and region's links.
CBEZ model
The
research provides a model of a cross-border economic zone connecting two
economic zones on the opposite sides of a border gate. This model is similar to
the symmetric model, the composition of
the two sides' economic zones may alter depending on their relative strengths.
A full CBEZ would comprise both hard infrastructure, such as transportation
systems, warehousing, commercial, and manufacturing zones, and soft
infrastructure, such as financial services and information.
The
research synthesized previous research as well as practical surveys and
proposed a fundamental CBEZ model with eight distinct component groups based on
Lord and Tangtrongjita's (2014), Lalkaka et a l(2011), Wallack et
al(2011), and some other studies
developed in the research work by Nguyen Anh Thu and Nguyen Thi Thanh Mai
(2017). The model is comprised of eight components: (1) an advanced checkpoint;
(2) modern infrastructure connectivity; (3) a commercial zone; (4) an
enterprise zone; (5) a logistics service zone; (6) preferential policies; (7) a
joint management mechanism for bilateral cooperation; and (8) enterprises
participating in value chains and regional linkage networks.
In terms of the mode of
cooperation, the following specific themes have been proposed:
- According to the model of two distinct zones in two countries,
each country self-manages on the basis of ensuring and respecting its own independence,
sovereignty, and territorial integrity, as well as compatibility and connectivity
between the two sides in a variety of fields, including infrastructure
planning, mechanisms and policies, organization and management, and procedures
and facilitation at the border gate.
- The two sides collaborate in planning and creating
the functional subdivisions of the two zones in a way that leverages and
complements each side's strengths.
- The two sides cooperate in order to facilitate
economic cooperation through harmonizing policies, particularly trade,
investment promotion, and labor mobility policies.
- A Joint Committee should be established which comprises
of members of the two sides' managerial functions and representatives from the
business community to meet on a monthly basis to resolve issues and obstacles
encountered during cooperation.
- A method should be established for the two parties
to communicate information on an ongoing basis.
- Each party is exclusively responsible for the
development, management, and exploitation of CBEZ under its jurisdiction.
- The adoption of CBEZ in provinces requires a
roadmap, emphasizing the topics that are most pertinent to their needs and
practical development. Each province's construction model should be unique,
taking into account the benefits and peculiarities of each location.
Regarding
the surveyed provinces, the northern border provinces have a tremendous amount
of potentials for cross-border commerce development. However, enterprise
development is constrained in the northern border provinces such as Lao Cai,
Lang Son, and Cao Bang. Quang Ninh, in particular, has stronger general and
specific characteristics for CBEZ development than other provinces, and thus
qualifies as a province with the best conditions for CBEZ formation. The
cross-border economic cooperation between the provinces bordering Laos and Cambodia
demonstrates that the provinces can focus more on production cooperation
between their respective enterprises while also promoting their strengths as a
transit bridge to the country's seaport areas, particularly the Lao Bao -
Densavanh area.
Recommendations to the
Government:
The
CBEZ is the next logical stage in the development of cross-border economic
cooperation. However, because there is no universal model for all border gate
areas, the approach is for the Government to develop a policy in conjunction
with relevant ministries and agencies and with the approval of the Government.
The
government needs to: (i) Clearly define CEBZ as a model of two zones in two
countries, not as a single zone with a unified policy. At the moment, the
researched provinces do not meet all of the conditions necessary for the
formation and development of CBEZ, and thus it will take time for these
provinces to do so; (ii) Implement policy coordination with bordering countries
through the establishment of a regular exchange mechanism for macroeconomic
policies, policies between border provinces, and particularly policies on trade
and tourism, tax, customs, and socioeconomic development planning; Assist local
governments in harmonizing policies creating a transparent legal corridor to
facilitate business development; Establish a regular information exchange
mechanism and keep itself updated of the border trade policies of its
neighboring countries; (iii) Carry out assessment and review of border trade
agreements between Vietnam and adjacent countries; (iv) Take measures to re-organize
small-scale border trade with neighboring countries, promote exports through
official channels, and payments according to international standards; (v)
Prioritize investment resources for border provinces' economic infrastructure
development; and (vi) Coordinate research on common policies to promote
bilateral cooperation.
Recommendations to local
governments:
Local
governments must urgently examine their border provinces' master plans for
socioeconomic growth, identifying important axes of convergence between trade
exchange activities and local production, economic, and urban development.
Local governments must identify their own advantages in economic cooperation
with adjacent countries in order to attract significant investment and large
domestic firms to capitalize on those advantages.
Local
governments must continue to strengthen their strengths in the immediate future
by promoting trade activities, facilitating commerce, and supporting investment
in logistics services, supermarkets, trade centers, and bars. With a major move
toward formal commerce, it is vital to alter manufacturing and processing
processes, increase the quality of commodities, and boost Vietnamese exports'
competitiveness in the global value chain. Along with policies that facilitate
cross-border trade by constructing infrastructure and streamlining procedures,
it is vital to have policies that promote production and market development in
order to enhance product exports focusing on China, leveraging geographical
proximity and trade preferences, and increasing the overall efficiency of Vietnamese
investment in connecting infrastructure.Ministries and sectors must collaborate
with Vietnam's border provinces to pilot the development of cross-border
tourism cooperation zones in locations with pairs of border gates conducive to
tourism development. It is reasonable to identify and classify interesting
sites, particularly for Chinese tourists, in order to ensure quantity, service
quality, and long-term profitability.
It
is vital to continue deepening the system of cooperation between local
governments in the management and usage of cross-border laborers, with the goal
of enhancing cooperation in training and upgrading worker qualifications, firstly
it is crucial to carry out trainings on Chinese language, Vietnamese language,
and skill, qualification upgrading for unskilled employees; prioritize labor
cooperation as a significant area of bilateral economic cooperation in the
coming years. Concerning the issue of illegal border-crossing workers seeking
work in China, local governments must coordinate with cross-sectoral forces
such as police, border guards, and unions to strengthen management and
containment in a variety of areas; effectively manage temporary residence and
absence, organize to grasp situations, and detect and handle cases of
deliberate violations. Local departments of labor, invalids and social affairs
should open more vocational training classes, conduct employment counseling,
and hold job fairs; they should also assist individuals who have been returned in
accessing to preferential loans so as to develop economic models, overcome
poverty, and stabilize life... Local authorities must aggressively prosecute
swindlers and brokers who unlawfully immigrate into China to work as hired
workers; they must also reform administrative procedures in order to create the
most favorable conditions for the issuing of travel permits and passports in
order to restrict illegal entry and exit.
Local
governments must also engage in active exchanges and negotiations with adjacent
nations in order to harmonize regulations and procedures, particularly those
relating to trade, tourism, transportation, and cross-border labor movement. It
is vital to coordinate actively in order to construct and enforce transparent
technical barriers in order to improve the quality of exported goods; to boost
oversight and assessment of economic and trade operations between Vietnam and
China. Simultaneously, it is required to build a proactive agency to collect
information on adjacent countries' policies and to deliver it to domestic
businesses; and to establish a regular information exchange system with the
localities of bordering countries.
It
is crucial for localities to foster enterprise growth through improved business
environments, enterprise training, and capacity building. Simultaneously, it is
required to improve management and encourage Vietnamese firms to strengthen
collaboration with each other and avoid unfair competition between them.
>>>
Click here to see the news in Vietnamese.