Chinese school for success
HANOI - Snuggling under Chinese blankets, zipping
around on Chinese motorbikes, and amusing their
children with Chinese plastic toys, Vietnamese
consumers count on their large northern neighbour to
churn out affordably cheap goods.
But as consumers race to spend, Vietnamese officials
are racing to learn. Rather than be smothered by an
avalanche of Chinese products--or resort to knee-jerk
protectionism--Vietnam is now looking seriously at
emulating the economic reforms successfully launched in
China.
A sure sign came in late December, when, for the first
time, a senior team of Vietnamese economists sat down
with Chinese economists to hash over past experiences
and future plans for reform. The four-day summit at
Hanoi's state-run Institute of Economics covered a
broad range of substantive issues, particularly on how
to restructure state-owned firms, liberalize trade, attract
foreign investment, revise rules on land ownership and
spur village-level enterprises.
"We learned a lot of lessons from China," says Ha Huy
Thanh, vice-director of the institute. Most important,
says Thanh, Vietnam is studying how to avoid the
"shock therapy" applied in the former Soviet Union
when indebted state-owned firms were closed virtually
overnight and price controls were lifted. Instead, it's
looking into adopting China's more gradual approach to
reform in order to maintain a balance between market
reforms and social stability.
Even so, bold moves are required to stave off inertia.
One stimulant: Vietnam may follow China's lead in
allowing foreigners to purchase larger stakes of
state-owned firms--49% in Vietnam's case, instead of
30% as presently permitted. In order to improve
Vietnam's trade leverage, officials are hoping to learn
from China how to hone their bargaining skills with the
U.S. and other World Trade Organization countries.
Most sensitive, perhaps, is re-examining the economic
role of Vietnam's Communist Party and the military.
Re-ducing corruption is a key goal. Debate over such
sensitive issues is sure to surface in March at the ninth
party congress. While some members want a green light
to engage in private enterprise, others seek to limit
cadres' economic clout. "Now, a lot of land belongs to
the army, the party, and the mass organizations. It's not
used very efficiently," says Thanh. "How do we solve
this problem? We have to learn from China's
experiences." For instance, the military in China was
ordered to give up its business empire in 1998.
Rash of exchanges
While the December 25-28 meeting was
ground-breaking, it didn't yield any definitive blueprint
for reform. That's still for the politburo to decide.
Sixteen high-ranking officials, including one politburo
member, got a taste of economic reforms in southwest
China during an extraordinary visit in June. Now the
party's economic committee, along with a host of
government advisers, is delving into two hefty tomes
that emerged from the economists' December summit.
These give detailed accounts of reform in China and
Vietnam. A third, comparative, volume will be finished
in July. The three books are to be launched with fanfare
in both nations by October.
Warming political relations between the two former
enemies are setting the stage for intensified exchanges
of economic know-how. Capping a flurry of high-level
meetings, Vietnamese President Tran Duc Luong visited
Beijing in December and signed the Tonkin Gulf
agreement on the two countries' sea border. An
important land border pact had been reached a year
earlier.
Meanwhile, international agencies such as the United
Nations Industrial Development Organization, or
Unido, are supporting Vietnam's moves to emulate
China. Unido experts involved in Chinese rural
industrial development are peppering Vietnamese
officials with comparative perspectives. Japanese
academics are similarly pitching in. Recent trade
missions from Yunnan and visiting Chinese commercial
delegations have provided advice from the horse's
mouth. Unido, meanwhile, is flying in lecturers from
Beijing to give advice on private-sector development,
and sending Vietnamese delegates to China to grasp the
mechanics of WTO membership.
"The Vietnamese are very keen to follow development
in China," says Markku Kohonen, Unido's
representative in Hanoi. "Of course, Vietnam has to
select its own way, and come up with a tailor-made
Vietnamese model. We are just at the very beginning of
a very long road."
By Margot Cohen - The Far Eastern Economic Review - January 11, 2001.
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