The Bank for Agriculture and Rural Development of Vietnam (Agribank) branch in northern Quang Ninh province has signed an agreement on cross-border payment co-operation with the Industrial and Commercial Bank of China's (ICBC's) Guangxi branch.

Quang Ninh has an international border gate with China at Mong Cai, the far most north eastern point of Vietnam. Cross-border trade with China is seen as critical for the province's development.

Agreement terms

Under their agreement, the two banks will co-operate to provide banking services including bills of exchange, payment guarantees, telegraphic transfers and letters of credit (L/Cs).

The Vietnamese state-owned commercial bank says it now has co-operation agreements in cross-border payment with four Chinese banks, including the Agricultural Bank of China, the Bank of China (BOC) and the China Construction Bank.

Closer ties

After centuries of animosity, political relations between Vietnam and China have warmed considerably over recent years. In the wake of these improved relations, bilateral trade between the two countries has increased markedly, last year by a massive 21.6 per centto US$8.2 billion.

Earlier this year the Vietnam Technological and Commercial Joint-stock Bank (Techcombank) said it had signed a cross-border payment agreement with the BOC that includes co-operation in L/C business (DC World News 13 January 2006).

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