Border city aims to play bigger role in B&R initiative as China-Vietnam trade thrives

By Chen Qingqing in Pingxiang Source:Global Times Published: 2018/5/10 18:53:44

Border city aims to play bigger role in B&R initiative

A Vietnamese truck arrives at the Pingxiang border inspection zone. The town is on the China-Vietnam border in South China's Guangxi Zhuang Autonomous Region. Photo: Chen Qingqing/GT

Pingxiang, a town at the China-Vietnam border in South China's Guangxi Zhuang Autonomous Region, is becoming a major gateway to Southeast Asia. However, although it is an important part of the China-proposed Belt and Road (B&R) initiative, the land port is still facing challenges in realizing its full potential to connect China with the members of the Association of Southeast Asian Nations (ASEAN).

A logistics company called Guangxi Dingyi set up a bureau in Pingxiang in April 2017 in order to cater to growing imports from Vietnam. A large portion of cargos shipped by the Shenzhen-headquartered firm belong to Taiwan-based Hon Hai Precision Industry Co, also known as Foxconn, which is a supplier of US smartphone-maker Apple Inc.

"As Foxconn has relocated its headset and cable facilities to northern Bac Ninh in Vietnam, we've seen growing exports of raw materials from China to Vietnam through Pingxiang, and more imports of iPhone components shipped back from Vietnam to cities like Zhengzhou [capital of Central China's Henan Province] for assembly," Zeng Guosheng, a manager at Guangxi Dingyi, told the Global Times.

Due to rising labor costs and an aging population in China, some labor-intensive industries have been moving to ASEAN countries such as Vietnam and Cambodia to seek cheaper labor costs.

As the trade volume between China and Vietnam has been growing at Pingxiang port in recent years, particularly after supply chain restructuring in the manufacturing industry, more companies like Dingyi have decided to move their offices to the border town in southern Guangxi.

Ma Wenhuan, a manager at Guangxi Overland Total Logistics Co Ltd, said that the company moved its headquarters from Shenzhen, South China's Guangdong Province, to Pingxiang, as its management team believes that the border town will play a more significant role in connecting China and ASEAN. The company imports products such as electronics and textiles from Vietnam, while companies like US sportswear producer Nike have relocated their factories from China to the Southeast Asian country.

From January to April, the cargo volume at the port increased 16.6 percent year-on-year, to 818,500 tons, according to a document the Guangxi Pingxiang Integrated Free Trade Zone Commission provided to the Global Times. Also, authorities launched several new freight routes last year, including the one connecting Qingdao in East China's Shandong Province, Pingxiang and Vietnam, and another connecting Guangzhou (capital of Guangdong), Pingxiang and Hanoi. Both have become important pathways for giant companies like Samsung, Nike and Foxconn.

Employment opportunities

Growing border trade between China and Vietnam has also been encouraging more Vietnamese workers to seek jobs in Pingxiang in the past few years. To help crack down on illegal employment that had previously generated insecurity at border areas in China, the local Pingxiang government launched a border workforce cooperation scheme in 2017. After such measure, the border town now legally employs about 500 Vietnamese workers on a daily basis to fill a variety of jobs in areas such as construction and furniture manufacturing. The number reached a peak level of 5,000 per day after the Chinese New Year in mid-February, which was a busy recruitment period.

Also, more Chinese firms are hiring workers from Vietnam for cheaper labor cost purposes. On average, the salaries of Vietnamese workers are between 2,200 and 2,800 yuan ($345.5 and $439.7) per month, 10 percent lower than their Chinese counterparts.

Big potential

To help the land port play a more significant role in the B&R initiative, authorities have been trying to streamline customs inspection processes at the Pingxiang Friendship Gate since September 2017, as part of efforts to improve customs clearance and connectivity at the border. 

The "two countries, one inspection" system was first proposed in February 2016 and will make progress before June 2018. Pilot companies and commodities were suggested in the plan, along with the implementation of unified customs clearance, the Pingxiang trade commission noted in the document it shared with the Global Times. Furthermore, when the Hanoi-Lang Son expressway in Vietnam project is completed in 2019, the cargo volume at Pingxiang is expected to surpass 4 million tons per year.

Still, traders feel there is currently slow progress in opening joint border checkpoints between the two countries at Pingxiang. "We won't see any shared facility at border customs in the next three years," Zeng, from Guangxi Dingyi, told the Global Times.

Newspaper headline: China-Vietnam trade thrives

Posted in: ECONOMY

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