Viet Nam and China Meet to Compare Recent Reform Experiences

May 13, 2004

Ha Noi - Policy-makers and researchers from Viet Nam and China are meeting today to exchange lessons and experience on key reforms as the two neighbouring countries strive to maintain fast economic growth and accelerate international integration.

The two-day workshop is organized by the project “Exchange of Economic Development Policy Lessons Viet Nam-China”, implemented by the Ministry of Planning and Investment (MPI) and the UN Development Programme (UNDP). Ms. Kanni Wignaraja, UNDP Deputy Resident Representative said: “For Viet Nam, China a relevant example of an economy in transition from a centrally planned to a market economy. UNDP is therefore delighted to support the exchange of the development experiences of the two countries as they work  towards the same sustainable and equitable human development goals, while facing many of the same challenges.” She raised the issues of pushing a sustainable development process, that does not allow short-term gains to override longer-term economic and social benefits for the people.

Participants discussed key reforms undertaken by each country with regard to the development of socialist market economy, reform of business sector including state-owned and private enterprises, foreign direct investment policies, and reform of financial system.Professor Chi Fulin, President of China Institute for Reform and Development, presented the 25 years of reform that China has experienced in setting up a socialist market economic system, and referred to both achievements and challenges faced in doing so. Its GDP rose 20.5 times between 1978 -2003, and per capita income reached $1000 per annum.

However, he stated that like Viet Nam, China is facing the emerging challenge of widening disparities between urban and rural areas, and between rich and poor. For example, Shanghai’s Human Development Index (HDI taking into account health, education and income outputs) is at the same level as Portugal’s, while Guizhou’s HDI is below Tajikistan’s or Viet Nam’s HDI. The Government of China recognizes the threat that poverty and growing inequality represent for the country’s social cohesion and its future development. China’s new development policy, presented in 2002, calls for the building of a “well-off society” to better balance economic and social development for the benefit of the whole population with a more equitable distribution of the benefits of growth.

Professor Fulin said for China to achieve “people-centred” development, social, political and cultural reforms need to be carried out hand-in-hand with economic reform efforts. As China is undergoing a profound social transformation, the country needs to adjust and accommodate different interests –state and non-state. This adjustment has become the “most basic and significant driver of reform,” he said and “non-government organizations, together with government organizations and businesses form three major pillars of a modern social structure in supporting this process.”

Dr. Dinh Van An, President of the Central Institute for Economic Management (CIEM) in the MPI, highlighted major constitutional changes underlying Viet Nam’s vision of a socialist market economy.   Revisions in 1992 and 2001 of Viet Nam’s Constitution have brought about greater recognition and encouragement of business activities and provided an increasingly level playing field to both the domestic and foreign private sector to engage in economic activity.

Dr. An noted: “There is no fundamental difference between Viet Nam and China in terms of building a socialist market economy. Like the Constitution of China, Viet Nam’s also covers the issue of multi-ownership economy. However, the newly revised Constitution of China addresses more fundamentally the central issue of private ownership.” Professor Chi Fulin said:” The nature of a socialist market economy is that it is a people's market economy, not a bureaucrat's economy or a command economy. It is a system in which the people are the decision makers and create wealth for common use and prosperity.” The Viet Nam-China policy dialogue also benefited from the presentations and commentaries from senior policy advisors, government officials and researchers who put forward both the good practices and the real constrains faced by the two countries in areas such as private sector development, assets ownership, SOE and financial sector reform, trade liberalization and access to WTO.
Contact informationCommunications Unit, 9421495 (EXT: 179); Fax: (04) 942 2267;
Do Thi Nguyet Nga (EXT: 254) e-mail:  do.thi.nguyet.nga

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