Viet Nam all ears to China’s experience in private sector development

Feb 21, 2002

HA NOI – China’s recent experience in fostering the development of the private sector development can be very beneficial to Viet Nam in its efforts to build a healthy and competitive domestic private sector, said a group of national experts, composed of high officials from the Party, National Assembly, Offices of President and of the Prime Minister and several Ministries.

Experts from the two neighbors are meeting here from 21- 22 February under the UNDP-supported project to exchange lessons and experience on Economic Development Policies.

Dr. Dinh Van An, acting president of the Central Institute for Economic Management (CIEM)  noted his appreciation for this innovative project which encourages knowledge sharing between Viet Nam and China. He stressed that “China and Vietnam are both carrying out an open-door policy and are in the process of renovation in the context of many historical similarities”.

Since China launched its reform process some eight years earlier than Viet Nam, Viet Nam hopes to learn and benefit from China’s more positive experiences, while avoiding some of the negative ones.

 “The most important change to the Chinese economic outlook in the 1990s was the fast growth of the private sector” said Dr. Yang Yao, professor of the China Centre for Economic Research, Beijing University. “After 20 years of policy evolution, China’s private sector has finally gained an equal treatment for its legal status. Now, the policy stage has been almost fully set and the private sector has completed its take-off period”.

“The Chinese experience shows that a healthy and competitive private sector can develop under the leadership of the Communist Party” commented Dr. Le Dang Doanh, former president of CIEM.  In China, the private sector development has gone over 20 years through a gradual redefinition process and reached its culmination in 1999 with its recognition by the Constitution as an “important component of the socialist market economy”.

The Chinese researchers noted that in addition to the political commitment and determination to undertake market reforms, the private sector’s fast growth can be attributed to the Government legal framework which has been “increasingly amiable“ to the private sector. A complete set of laws governing private firms now exists which create a more level playing field between private and state players.

The UNDP supported project promotes a series of exchanges covering critical topics including private sector development, SOE-reform, competition policy, FDI policy and incentives and external trade performance. Mr. Jordan Ryan, UNDP Resident Representative noted, “The private sector must be a driving force for socio-economic development in Viet Nam, especially to create jobs for the millions coming on the labour market over the next decade. China’s current economic success results from unleasing a powerful engine of growth: the talent and drive of private entrepreneurs and businesses”.

The visit to China last December of General Secretary Nong Duc Manh and the visit of Chinese President Jiang Zemin to Hanoi next week highlight the need for further exchange of economic reform experiences between two countries”, Mr. Jordan Ryan, UNDP Resident Representative. “China’s official entry to the WTO, after a 15-year quest, sparks hope that Viet Nam could benefit greatly from its neighbour’s experience with WTO accession.”

The UNDP supported project is being implemented by the Central Institute for Economic Management (CIEM) of MPI in close collaboration with China’s National Research Economic Institute in Beijing.

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