China, Vietnam Sign Package of Agreements on Economic and Financial Cooperation

The Chinese and Vietnamese governments have signed a package of 10 strategic agreements to boost economic cooperation between the two Asian nations, expand cross-border rail links, and mutual settlements in national currencies. The agreements were signed in Hanoi, the capital of Vietnam, on the sidelines of talks between Vietnamese Prime Minister Pham Minh Chinh and Chinese Premier Li Qiang.

Under the rail link agreement, industry experts from the two countries will work together on a technical plan for connecting Lao Cai in northern Vietnam and Hekou City in China’s Yunnan Province.

Representatives of Vietnam and China have also signed a memorandum of understanding on the introduction of cross-border payment services with the help of QR codes, a procedure that will make cross-border trade between the two neighboring countries much easier and seamless.

Despite historical territorial tensions over parts of the South China Sea, China is Vietnam’s main trading partner. Last week, Hanoi protested what it called a “brutal” attack by Chinese vessels on Vietnamese fishermen in a disputed area of the South China Sea, a waterway that carries many thousands of goods worth billions of dollars annually.

To ease tensions, an agreement was signed on China’s proposal to “explore a model for a special cross-border economic cooperation zone.” According to the Vietnamese newspaper Nhan Dan, “the two prime ministers agreed to strengthen not only trade and economic cooperation, but also maintain regular high-level exchanges in the fields of defense, security, and foreign business.” Under the agreements, Vietnam will facilitate access to its financial market for Chinese investors, especially in the high-tech and nuclear energy sectors, while China will remove barriers that have hitherto prevented Vietnamese agricultural products from accessing the agri-food market of Asia’s largest economy.

After visiting Vietnam, the Chinese premier will pay an official visit to Pakistan, where he will attend the 23rd meeting of the Shanghai Cooperation Organization (SCO) Council of Heads of Government from October 14 to 17. In Islamabad, Li Qiang will hold a series of bilateral meetings with Pakistani Prime Minister Shehbaz Sharif, Russian Prime Minister Mikhail Mishustin, and Belarusian Prime Minister Roman Golovchenko. The Shanghai Cooperation Organization was formed in 2001 and is composed of Belarus (which joined the group on July 4, 2024), China, India, Iran, Kazakhstan, Kyrgyzstan, Pakistan, Russia, Tajikistan, and Uzbekistan, with Afghanistan and Mongolia having the status of “observer countries.”