Sino-Vietnamese Trade Relations-with a focus on Cross-Border Trade

Abstract

The bilateral relations between China and Vietnam have to a large extent changed and improved since the political relations between the two countries normalized in 1991. Economic cooperation has been enhanced through various trade agreements under several economic initiatives (WTO, ASEAN+3, GMS). Consequently, Sino-Vietnamese cross-border trade has rapidly developed and accelerated the pace of regional integration. What are the impacts of different types of regional international cooperation on the relationship between China and Vietnam? How and in what way do national borders stimulate or hinder the economic cooperation between the two countries? These questions can be explained by applying comparative advantage theory and new economic geography theory as well as border effect theory to analyse the current situation of bilateral trade; particularly, trading activities across the China-Vietnam border. The proposed conceptual framework analyses supply and demand determinants as well as centrifugal and centripetal forces that affect the dynamics of cross-border trade. The framework can be applied to shed light on the sustainable development in regional cooperation and for further academic studies in regional economic integration.