Home · Articles · News · NikeLeaks Cables: Asia · Vietnam: ECONOMIC DEVELOPMENT AND IPR ENFORCEMENT IN VIETNAM'S CHINA BORDER REGION
December 14th, 2011 WW Staff | NikeLeaks Cables: Asia
 

Vietnam: ECONOMIC DEVELOPMENT AND IPR ENFORCEMENT IN VIETNAM'S CHINA BORDER REGION

     
Tags:
Reference ID: 08HANOI90
Created: 2008-01-28 01:29
Released: 2011-08-30 01:44
Classification: UNCLASSIFIED//FOR OFFICIAL USE ONLY
Origin: Embassy Hanoi

VZCZCXRO2223
RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHHI #0090/01 0280129
ZNR UUUUU ZZH
R 280129Z JAN 08
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC 7051
INFO RUEHHM/AMCONSUL HO CHI MINH 4183
RUCNASE/ASEAN MEMBER COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS SECTION 01 OF 03 HANOI 000090
 
SIPDIS
 
SENSITIVE
SIPDIS
 
STATE FOR EAP/MLS AND EEB/OIPE
USTR FOR DBISBEE AND RBAE
 
E.O. 12958: N/A
TAGS: ECON KIPR EAID EINV ETRD OTRA EIND VM
SUBJECT: ECONOMIC DEVELOPMENT AND IPR ENFORCEMENT IN VIETNAM'S CHINA
BORDER REGION
 
REF: (A) 07 Hanoi 1817; (B) 07 Hanoi 1838; (C) 07 Hanoi 2064
 
HANOI 00000090  001.2 OF 003
 
 
1. (SBU) Summary: Vietnam's mountainous northeast border region with
China has tied its economic development plans to Vietnam's growing
international trade.  Provincial governments are making the most of
their geographic advantages and reaping growth rates that exceed the
8.5 percent national average.  Lang Son province has capitalized on
its 250 km border with China to encourage trade-related services,
resulting in 11.6 percent GDP growth in the province in 2007.  Lang
Son officials are also focused on reducing the 29 percent poverty
rate through increased education and training.  Along with its
economic opportunities, the long border with China presents
challenges for local officials.  Lang Son is trying to confront
rampant counterfeit goods, most of which enter from China.  The
capacity constraints in overcoming intellectual property rights
violations this significant challenge were evident in visits to
several border gates.  Provincial authorities have taken some steps
to protect IPR, but their ultimate success rests in translating
these efforts into concrete enforcement results.  End summary.
 
2. (U) This is the latest in a series of reports (Reftels) on
provincial travel by Embassy and Consulate General personnel to
understand better the level of economic development and
competitiveness in provinces throughout Vietnam.  On January 16,
members of the Embassy economic section traveled to the mountainous
northeast province of Lang Son to discuss with local government and
national border officials the challenges and opportunities facing
the region, including combating intellectual property rights (IPR)
violations along the border with China.
 
BANKING ON TRADE FOR THE FUTURE
-------------------------------
 
3. (U) The northeastern border province of Lang Son is an important
connection between southern China and Vietnam's northern economic
hubs of Hanoi and Haiphong.  The province has a 250 km long border
with China, presenting provincial officials with both economic
opportunities and significant challenges.  There are two large
international border gates (open to all international commerce and
nationals) and two national border gates (limited to only Vietnamese
and Chinese nationals and their goods) in Lang Son.  A
well-developed series of national highways connects the province
with other urban centers in the north as well as the South China
Sea.  A railway with connections to Hanoi and Beijing also runs
through the center of the province.
 
4. (U) Director of the Lang Son Trade and Tourism Department, Mr. Ha
Hong, explained that the province's economy is shifting to more
trade-related services as more imports and exports pass through this
gateway to China and Vietnam's market continues to develop.  In
2007, Lang Son had a "solid" 11.6 percent GDP growth rate, up more
than 1.5 percent from 2006.  Services account for 39 percent of the
province's GDP, matching the 39 percent contribution from
agriculture and far exceeding the 22 percent share of GDP from
industry.  Hong explained that Lang Son officials aim for services
to comprise 45 percent of the province's GDP by 2010.  They intend
to reach this goal by capitalizing on the province's location to
expand trade and cooperation with China, Japan and Korea, and other
ASEAN members.  Drawing additional investment in infrastructure
(roads, railway and expanding the border gates) will be a focus of
the province, Hong said.  Lang Son has developed a 17 square
kilometer "economic cooperation area" on the Chinese border, where
it hopes to attract local and foreign investment to conduct export
processing services.  A transit warehouse to facilitate trade
between ASEAN countries and China is already planned for this area,
Hong noted.
 
POVERTY REDUCTION A TOP PRIORITY
--------------------------------
 
5. (U) Nearly 80 percent of the province's 746,000 inhabitants are
ethnic minorities.  Director Hong said that the province's per
capita annual income in 2007 was $600, compared with the national
average of approximately $870.  Poverty rates are high and 29
percent of Lang Son's population earns less than $200/year.
Provincial authorities want to reduce poverty levels to 10 percent
and eliminate the gap between the average provincial and national
per capita income in the immediate future.  Bemoaning the "limited"
national budget for poverty reduction, Lang Son officials have
directly approached businesses and foreign donors for assistance.
Hong noted that a number of NGOs from Germany and Holland are
working in the province, and that Vietnamese-Americans have returned
to the province to provide private assistance, which he estimated at
several hundred million Vietnamese Dong (100 million VND = $6,250)
in 2007.
 
 
HANOI 00000090  002.2 OF 003
 
 
6. (U) The province's poverty reduction strategy is focused on
improving education and training opportunities.  Currently, nearly
100 percent of children attend primary school, and the rate for
those attending secondary schools is "catching up" to that level,
provincial officials explained.  Lang Son has a teaching college and
is expanding training in the fields of health, economics and
practical business applications.  They are actively seeking
additional donors and partners to improve education opportunities
for local citizens.
 
LOOKING TO IMPROVE ITS LOW PCI SCORE
------------------------------------
 
7. (U) Attracting foreign investment is the lynchpin of Lang Son's
future growth strategies.  The Lang Son People's Committee has
adopted several measures to bring more money into the province,
including printing brand new bilingual marketing materials touting
the province's potential and opening separate foreign direct
investment (FDI) and trade promotion centers.  Trade and Tourism
Director Hong recognized, however, that Lang Son must work to
improve the low score it received in the 2007 Provincial
Competitiveness Index (it was ranked 59 out of 64 provinces).
Several investors' recent concerns were resolved very quickly, Hong
added, and provincial officials are under mandate to continue
measures to improve and streamline administrative procedures.
 
INTELLECTUAL PROPERTY RIGHTS: CONFRONTING THE CHALLENGE
--------------------------------------------- ----------
 
8. (U) Lang Son officials face a significant challenge in combating
rampant IPR violations, manifest in the form of counterfeit goods
entering the province from China.  While the concept of IPR is
relatively new to Vietnam, Lang Son officials understand Vietnam's
responsibility to protect intellectual property, including under its
WTO and BTA commitments, Director Hong said.  He described Lang
Son's IPR action plan, which has resulted in "good coordination"
between provincial trade, science and technology, customs and police
authorities.  Hong said that Lang Son is the first (and to his
knowledge, the only) province to create its own IPR task force, with
the Vice Chairman of the People's Committee as the Chair.  The task
force is charged with conducting inspections in the local markets
and at businesses in the province.  The success of Lang Son's IPR
task force in improving coordination on IPR has led other provinces
to come to learn from Lang Son's experiences, Hong added.
 
9. (U) Provincial authorities investigated 95 IPR infringement cases
in 2007, resulting in the issuance of 39 administrative remedies.
All of the infringing goods were destroyed, according to Director
Hong.  Motorbikes and spare parts, small electronics, motorbike
helmets, mobile phones and cosmetics were the most common
counterfeit products seized by local and national border
authorities.  Hong hastened to add that almost all of the infringing
goods were imported from China, and most "did not involve U.S.
products."  Lang Son authorities also handled more than 6,000
anti-smuggling cases in 2007, many of which were "small scale"
incidents of individuals smuggling illicit goods through more remote
border areas.
 
POLICING THE BORDER: CAPACITY CONSTRAINTS
-----------------------------------------
 
10. (SBU) In visits to the Huu Nghi (Friendship) and Tan Thanh
border gates with China, Lang Son's capacity constraints in
combating counterfeit trade were evident.  With hundreds, and
sometimes thousands, of trucks entering Vietnam through Lang Son's
gates every month, in addition to the more than 25,000 people per
month crossing the border on foot and heavy rail traffic, customs
officials we observed had insufficient time to inspect effectively
many of the goods coming across the border.  While a Border Army
official at the busy Huu Nghi Border Gate insisted that no
counterfeit products were crossing at his station, a Tan Thanh
border gate management official offered the more realistic
assessment that fake goods, particularly electronic products, were
getting through the border gate unimpeded.  Both of them claimed,
however, that the majority of counterfeit products were entering
Vietnam at more remote and unmanned border crossings.  The Tan Thanh
official highlighted the need for more training on identifying IPR
violations for both customs and market management board officials
(responsible for monitoring goods for sale in the many marketplaces
near the border).
 
11.  (SBU) A tour of several local markets within 200 meters of the
Tan Thanh border gate further underscored that many counterfeit
electronics and other goods were making their way into Lang Son.
Imitation Apple iPods (priced under $20), digital cameras, mobile
phones (including a line of "Suny Ericssun" (sic) handhelds),
 
HANOI 00000090  003.2 OF 003
 
 
unlicensed DVDs and music discs (most with Chinese writing), luxury
handbags and high end garments (including Nike and other American
brands) were ubiquitous.  When asked about efforts to remove these
counterfeit products from the marketplace, a border official claimed
that they had difficulty telling legitimate products from fake ones,
claiming also that they needed the legitimate products as a basis of
comparison.  (Note: It was unclear whether provincial officials had
requested legitimate samples from the rights holders.)
 
COMMENT
-------
 
12. (SBU) While its long border with China is a great advantage for
Lang Son, local officials must address the weaknesses identified by
the province's low PCI score to realize fully its potential as a
gateway between the region's two fastest growing economies.  Lang
Son's development of an IPR action plan and task force to combat the
omnipresent IPR violations in the province are steps in the right
direction.  The real measure of success, however, will be the
ability of provincial authorities to translate their efforts into
concrete enforcement results.  Training and capacity building can
help.  For example, one U.S. company has had success with its
efforts to teach border officials how to identify bogus soaps and
suds.  Direct engagement by more rights holders with enforcement
authorities can be effective in clamping down on counterfeit trade.
 
 
MICHALAK
 
  • Currently 3.5/5 Stars.
  • 1
  • 2
  • 3
  • 4
  • 5
 
 
 

 

 

Web Design for magazines

Close
Close
Close