Trade With China Pays Off for Vietnam

Nearly 20 years ago, Chinese troops swept across the border here and at other points by the hundreds of thousands to punish Vietnam for its growing ties with the Soviet Union and its invasion of China-backed Cambodia.

Vietnam’s resistance was fierce, and the poorly trained Chinese soldiers got no farther than 20 miles into Vietnamese territory. After 17 days of fighting that left 20,000 dead, China declared victory and went home. Its soldiers left behind a badly damaged Lao Cai and a few other towns, such as Mong Cai, that were destroyed.

About all that remains as a reminder of the invasion is the war-battered skeleton of a 19th century French-built Roman Catholic church in the mist-shrouded hills outside Lao Cai.

However, today a new Chinese invasion is underway across the 702-mile border--this time by businesspeople.

By official count, more than 4 million Chinese, most of them traders and businesspeople, now enter Vietnam each year through 22 border crossings that were opened in 1993, two years after Hanoi and Beijing restored diplomatic ties. Hundreds of thousands of Vietnamese cross into China, many of them laborers who return home with smuggled goods.

The burgeoning trade has turned Lao Cai, about 160 miles northwest of Hanoi, and other border communities into boomtowns.

Once Vietnam’s northernmost provinces were its most impoverished, with a citizenry that lived on barter economies. Now streets are being widened, new buildings are under construction, and television sets flicker in most homes.

Trade between the two countries, which have fought periodic wars for more than 1,000 years, reached $1.2 billion last year, officials report.

However, Vietnam’s Ministry of Trade estimates that 70% of the commerce along the porous border is “spontaneous,” meaning black marketing. In addition to the official checkpoints, hundreds of footpaths and short river crossings link the two nations.

Before dawn each morning, the Red River that separates Vietnam and China here is alive with small boats. Some Vietnamese make five or six trips a day across the border, hauling all manner of smuggled goods back into Vietnam. There appears to be little official attempt to curtail their activities.

Vietnam sends to China, both legally and illegally, iron, coal, rubber, poultry, piglets, wild animals such as tigers, whose parts are used as aphrodisiacs and in traditional medicine, and dogs and cats for cooking.

In return, Vietnam gets from China vegetables, construction material, fans and light appliances, toys, cigarettes, soft drinks and beer, textiles, fertilizer, outdated heavy machinery and garments.

“I don’t think of myself as a smuggler,” a 32-year-old woman named Hien told the Vietnam Investment Review. “I just transport goods for our bosses to make a living for myself.”

Hien said she crosses the border at Lao Cai several times a day, returning to Vietnam with clothes. She earns $4 to $5 a day, about 10 times what she would make farming in her village.

The Vietnamese government considers smuggling a serious problem that is costing it millions of dollars in lost revenue.

The issue is discussed openly in the state-controlled media, but Vietnam has not had significant success in curtailing smuggling because of the involvement of government officials, according to press reports.

The booming border trade reflects the growing economic relationship between China and Vietnam. To underscore the importance of that partnership--and Vietnam’s official foreign policy of “being a friend to all countries”--Prime Minister Phan Van Khai visited China for five days in October, the first such trip by a Vietnamese premier since the 1979 war.

Travelers can now journey from Hanoi to Beijing by train, with a connection in Kunming, China. Long-haul Vietnamese buses began carrying passengers into China earlier this year, and six border checkpoints have been opened to cargo trucks.

Citizens of both countries can cross the river at Lao Cai and some other points for daytime trips without passports or special permits.

Like its neighbors, Vietnam remains wary about living under China’s long economic and military shadow.

Hanoi has disputes with China about sections of their border and about the Spratly Islands, which are also claimed by Malaysia and the Philippines. Vietnamese and Chinese officials have been meeting to discuss the disputes and hope to settle them by 2000.