Vietnam will accept payment in the Vietnamese dong (VND), Chinese yuan (CNY) or fully convertible currencies for overland trade activities with China starting October 12, stated the SBV.
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The circular applies to commercial banks and branches of foreign banks licensed to conduct foreign exchange transactions in Vietnam; branches of branches of banks located in border areas and border-gate economic zones of Vietnam and China; organizations trading in duty-free goods; organizations providing services in isolated areas at international border gates; organizations engaged in bonded warehouses in border regions; the Vietnam-China Border Gate Economic Zone; and other organizations and individuals conducting payment activities in Vietnam-China border trade.
During the 2013 - 2018 period, Vietnam's export turnover through border gates exceeded US$100 billion, accounting for an average of 29.06% of total bilateral trade turnover, informed the Ministry of Finance (MoF) in a report on Vietnam's cross-border trade activities with China, Laos and Cambodia.
Vietnam imported US$250 billion worth of goods from its northern neighbor, over 200% higher than the export turnover.
This resulted in Vietnam's trade deficit of US$150 billion with China through border gates, not to mention billions of USD generated from unofficial and illegal trade activities, stated the report.
China remains Vietnam's largest trading partner and is the third largest export market behind the US and the European Union (EU). Meanwhile, Vietnam is the eighth largest trading partner of China, and the latter's largest trading partner among ASEAN countries with total trade turnover in 2017 of US$93.7 billion, representing an increase of 30.2% against 2016, according to the General Department of Vietnam Customs.
In the January - August period, the US was Vietnam's biggest export market, spending US$30.2 billion on Vietnamese goods, up 10.2% year-on-year, followed by the European Union with US$27.7 billion, up 10.8%, and China of US$23.4 billion, up 25.2%.
Meanwhile, China remained Vietnam's largest import market during January-August with turnover of US$41.4 billion, a 12.8% climb year-on-year.
