Vietnam Vows to Boost Political Ties With China in Li Visit (2)

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.

‘Peaceful Measures’

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.

‘Making Attempts’

“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.

Power Plant

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 Bloomberg News staff for this story:

John Boudreau in Hanoi at

jboudreau3@bloomberg.net;

Diep Ngoc Pham in Hanoi at

dpham5@bloomberg.net

To contact the editor responsible for this story:

Rosalind Mathieson at

rmathieson3@bloomberg.net

Vietnam Vows to Boost Political Ties With China in Li Visit (2)