Vietnam and China are calling for local currency letters of credit (L/Cs) to support economic corridors connecting various cities and provinces in the two countries.

Vietnamese leaders and representatives from China held talks in Hanoi in early September to discuss the corridors that aim to boost cooperation, tap economic potential and stimulate regional growth.

Two-way trade

Vietnam's Deputy Prime Minister Nguyen Tan Dung and chairmen of the Vietnamese People's Committees of Hanoi, Hai Phong port city, the northwestern province of Lao Cai and the northeastern province of Quang Ninh were present at the talks, as was the mayor of Yunnan, China.

The meeting focused on expanding two-way trade, preventing and combating trade frauds and smuggling, building trade centres and the development of joint tourism promotions for China and Vietnam.

Simplified procedures

Measures envisaged include the upgrading of rail and road transport capacity connecting Yunnan to the Vietnamese cities of Lao Cai, Hanoi, Hai Phong and Quang Ninh.

The talks also focused on broadening exchanges of economic, trade and investment information and simplifying export, import and visa procedures. Possibilities were also discussed for allowing the free movement of vehicles from Vietnam and the Yunnan province to travel along the economic corridor to reduce costs and raise competitiveness of export and import enterprises.

Local currency

Other measures suggested included the issuing of long-term travel permits to business people of the five cities and provinces that cross the border regularly to do business.

The talks also highlighted the need to permit local commercial banks to issue local currency L/Cs in a bid to ensure fast and accurate payment and avoid risks to enterprises.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.