Vietnamese and Chinese businesses gathered at a forum in Hanoi on November 21 to seek ways to reduce Vietnam’s trade deficit with China.

Attending the forum, entitled “Vietnam-China Business Forum: Cooperation Potential and Opportunities”, representatives from 23 Vietnamese firms and 30 firms from China’s Zhejiang province discussed issues on economic cooperation between the two neighbors.

They agreed that over the last year, economic-trade relations between Vietnam and China have developed in both width and depth. Since 2004, China has maintained its position as Vietnam’s largest trade partner with an annual two-way trade growth of over 20 percent in the last three years.

However, Vietnam’s trade deficit with China has increased, resulting in an imbalance in the two countries’ trade, they said.

Zhou Jian Jun, Director of the Hong Kong-based Zi Lu Investment Company Ltd, attributed the large trade deficit to a sharp increase in domestic demand and Vietnam’s low manufacturing capacity.

After Vietnam joined the World Trade Organization in 2006, the country needed a large volume of imported materials from China for the production of exports to Europe and America, as well as to other Southeast Asian countries as a result of the ASEAN Free Trade Area, he said.

According to Tran Dinh Thien, Director of the Vietnam Economic Institute under the Vietnam Academy of Social Sciences, Vietnam’s trade deficit with its partners has grown rapidly since the country’s admission to the WTO due to weaknesses in Vietnam’s trade and production structures - especially support industries.

Over recent time, many businesses from China’s Guangxi province have invested in Vietnam for a short time, only to withdraw investment and cause environmental pollution and negative socioeconomic impacts, he said.

To reduce this, the two countries need strategies calling for long-term and selective investment from large and prestigious Chinese businesses in areas of Vietnam, he suggested.

According to Vietnam Customs, in the first half of 2012, two-way trade between Vietnam and China exceeded $19 billion, a year-on-year increase of 21.76 percent. Of which, Vietnam’s trade deficit with China was over $6.8 billion, up 5.56 percent.

China now has 866 valid projects in Vietnam with a total registered investment of $4.52 billion, of which $1.8 billion has been realized.