A Study On The Effect Of Sino-vietnamese Trade On Vietnam's Economic Development

In the January of 2010, China-ASEAN Free Trade Area has been officially started. The relationship between China and Vietnam get greatly strengthened, especially the business relationship between the two neighboring countries due to the regional economic integration of China and the Southeast Asia countries. As we know, China and Vietnam which are both socialist countries, they have the similar culture and economic structure. This paper will take the classical international trade and economic growth theory as the guide to make a deep analysis of the development of Sino-Vietnamese trade current situation and its existing problems. We put the bilateral trade between China and Vietnam divided into three stages: the initiating stage, the stage with turbulent growth, high-speed growth stage. There are three important forces which greatly affect the Sino-Vietnamese trade, as follows, the favorable geographic conditions, the same social ideology, the similar industrial structure and economic structure. The paper illustrated the main achievements of Vietnam since the reform and opening-up, with a rapid growth of economic development and the industrial structure has been strongly improved, the amount of foreign trade has been greatly increased. This paper also explain some serious problems in Vietnam, the gap between the poor and the rich is extended, the trade deficit is expanded year by year, the high inflation pressure. The article selected the GDP of Vietnam and the volume of trade between China and Vietnam as the two empirical timely series variables, then we reached the most preferable empirical model. The result suggested that the trade between the two countries is a very important factor for the economic development of domestic Vietnam. This paper give some suggestions in order to further strengthen the bilateral trade relationship. To further strengthen bilateral cooperation in more fields. Speeding up the pace of economic restructuring in both countries. Finally, the two countries should increase more investment into the construction of infrastructure in the border regional areas.