Enhancing China-ASEAN Economic Integration: Cross-Border Economic Cooperation Zones at the China-Vietnam Border (CBEZ)

The Challenge

China has become the world’s second largest economy in large part due to policies initiated in the late 1970s to encourage foreign direct investment into special economic zones. Despite sharing borders with fourteen countries, only a negligible proportion of China’s total trade is conducted with immediate neighbours. To make use of this thus-far untapped potential, Chinese leaders have significantly enhanced their engagement with partners in Asia, embracing cross-border economic cooperation. Better geographic and socioeconomic distribution of the benefits of trade liberalisation and economic growth is sought, while recognising the need to protect the most vulnerable social groups from possible negative consequences to the economic and socio-cultural situations affected by cross-border trade.

The Response


China and Vietnam have embarked on a program to develop “Two corridors, One circle” of economic growth to accelerate integration of their economies, seeking to facilitate and promote trade and investment between Yunnan Province and Guangxi Zhuang Autonomous Region in China and corresponding Lao Cai (Laojie) and Lang Son (Liangshang) Provinces in Vietnam. Cooperation and joint planning by Vietnamese and Chinese authorities of cross-border economic cooperation zones (CBEZs) is active and ongoing in both corridors. With its global human development mandate UNDP is uniquely positioned to support pilot initiatives for CBEZs between China and Vietnam. Such an approach helps to ensure that the needs of both potential beneficiaries and vulnerable groups will be addressed.

The CBEZ project will foster China-ASEAN integration through enhanced understanding of cross-border economic cooperation zones, participation in the planning for and implementation of CBEZs with support for collaborative structures to advise policymaking, and application of continuous learning practices.

Achievements



The project has contributed greatly to enhance understanding of cross-border economic cooperation zones in both China and Vietnam.

The project supported the creation of CBEZ Administrative Committees to coordinate policy planning between Chinese and Vietnamese governments. Cooperation has been further enhanced through project activities such as training sessions and consultation meetings, which enable both sides to reach mutual agreements on CBEZs. In 2008, China approved Guangxi Pingxiang cross-border comprehensive bonded zone (the first such zone along China’s land frontier), and Vietnam also approved an initiating zone in the Lang Son Tongdeng economic zone to promote the Pingxiang-Tongdeng CBEZ. In 2010, Yunnan province signed a Memorandum of Understanding with Lao Cai province entitled “Framework Agreement on promoting CBEZ research and construction cooperation between China Hekou and Vietnam Lao Cai”.

The local project implementing teams in both Guangxi and Yunnan have actively participated in CBEZ planning, policymaking, and implementation meetings at local and regional levels to ensure linkage between learning and actual CBEZ policy design and implementation.

The project has also helped to bring together government and non-government representatives to collaborate on CBEZ-related issues from different stakeholders’ perspectives. In 2011 the Yunnan Public-Private Advisory Committee was established and initiated the Federation of Greater Mekong Sub-region (GMS) Supply Chain Service Alliance which will greatly encourage the private sectors' participation in CBEZs.

The CBEZ project has served as a demonstration model for cross-border economic cooperation in other cross-border contexts around China. Recently Chinese central government has approved piloting of cross-border economic zones between China and neighboring countries in three cities in Guangxi, Yunnan and Inner-Mongolia respectively.

Who finances it?

Donor Amount
UNDP
US$ 1,500,000
Government    
US$ 1,500,000
Programme Overview
Status:
Ongoing
Start Date:
30 October 2007
Estimated End Date:
31 December 2013
Location(s):
China, Vietnam
Focus Area:
Poverty Reduction
Project Officer:
Ms. Zhang Yan
Total Budget:
US$ 3,000,000
Donors:
UNDP; Government
Partners:
China International Center for Economic and Technical Exchange (CICETE)