As Vietnam’s economy booms because of the US-China trade war, China is making a concerted effort to create a large special economic zone along the northern border of Vietnam and China’s Beibu Gulf area.
Despite China losing key manufacturing sector business to Vietnam due to trade tensions and tariffs hike by the US, Beijing has committed resources to boost regional trade along the Vietnam border to lift cities far from economic hubs.
“China’s central government has attached great importance to the coastal and border areas of Guangxi by approving the Beibu Gulf economic zone – which is composed of cities like Beihai, Qinzhou and Fangchenggang – as the frontier of opening-up to the Association of Southeast Asian Nations,” stated a commentary in Chinese state-media on Wednesday.
“According to the central government’s planning, the Beibu Gulf area will become a special economic zone similar to the Guangdong-Hong Kong-Macao Greater Bay Area,” added the commentary.
Vietnam’s economic growth has accelerated dramatically this year as the US-China trade war forced manufacturing firms to flee to locations where their goods will not be hit with US tariffs, according to a report by consultancy IHS Markit.
Vietnam economic growth in the Asian region comes as an outlier as other trade-dependent Asian nations are bearing the brunt of the US-China trade war and dragging their economies down to Great Financial Crisis 2009-levels.
The report revealed that Vietnam’s exports to the US surged in 2019, as the US-China trade war escalated dramatically.
Vietnam’s export to the US expanded by nearly 30 percent in 2019, following the moment of 2018 where exports also increased.
“Vietnamese exports to the US have continued to show buoyant growth during 2018, rising by 11 percent year-on-year, followed by even more rapid export growth of 28 percent year-on-year during the first nine months of 2019,” revealed the report.
“This rapid pace of export growth to the US partly reflects some international trade diversion effects away from China due to the US-China trade war,” it added.
Vietnam’s economy soared to a record pace this year, expanding nearly seven percent in the first nine months of the year. Third quarter growth came in at a red hot 7.31 percent year-on-year.