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Thriving Trade Eases Tensions


IN this remote, impoverished area of northern Vietnam, enterprising villagers are conducting a spirited, cross-border trade with China that has changed their lives and become a symbol of warming relations between two ancient adversaries. When widespread trading appeared unexpectedly two years ago, Vietnamese and Chinese officials gave a knowing wink but did not formally endorse it. Now Hanoi and Beijing have pragmatically decided to keep politics and economics separate.

Each day regardless of weather, scores of Vietnamese tribespeople and farmers hike several miles into China's Guangxi province from the Vietnamese border town of Dong Dang.

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``Everybody wants to be rich,'' says Luong Hong Duc, one of many middlemen.

These Vietnamese trade rice, crab, maize, animals, crops, Chinese yuan, and dollars for Chinese cassette players, bicycles, electric fans, housewares, toys, and fruit. At the border, Chinese and Vietnamese customs officers inspect cargo and levy taxes. Most products entering Vietnam carry a 25 percent duty, although bicycles are taxed at 40 percent.

On their return, most traders walk another few miles to the crowded markets of Lang Son, the provincial capital. There merchants will buy from the traders and resell to Vietnamese who make regular pilgrimages from Hanoi, Hue, and as far south as Da Nang. Demand is heavy. Stores in Hanoi are stocked with Chinese products, which Vietnamese prefer to lesser-quality domestic goods.

Authorities downplay it, but what fuels much of the trade, and what the Chinese covet, is smuggled gold and copper. Reports of telephone wires being vandalized for their copper content are common.

For many in Lang Son province, the chance to become an entrepreneur is a great draw. The value of last year's trading reached an estimated $12 million. Officials expect volume this year to exceed $16.5 million. Some tax revenue goes to Hanoi and Beijing, but much remains in the province. In the past 20 months, local officials say, the average annual income in Lang Son province has more than tripled to $86 from $26. That is still far below the $200 a year a typical Vietnamese makes.

The border trade has spawned a hierarchy of runners who carry goods and organizers who pay their salaries, supply them with tradeable products, cover taxes, and ease customs. A busy runner can make $500 a year. Mr. Duc, the middleman, says he earned $3,500 last year - 18 times Vietnam's per capita average.

Profit margins for Chinese goods are thin by Western standards. Pham Lan, a Lang Son stereo dealer, asks $69 for a brand-name Chinese dual cassette player with short-wave radio. He paid $62 for the machine, which he will sell for $66. The spread may not seem big, but it is nearly 10 days' salary for most Vietnamese.

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Mr. Lan, a 42-year-old former government employee, opened his store last year. Now, he explains, ``I can get profit for myself.'' In his first year of business, Lan says, stereo sales earned him $6,500 after taxes.

Vietnamese officials have showcased the trade to illustrate Hanoi's liberalized economic and social policies, but contact has in fact gone on for years among the Tay and Nung hilltribes, who share language and culture on either side of the border. They care little for politics, though historically politics has affected them dramatically, often adversely.

Just 11 years ago, Vietnamese and Chinese were trading heavy artillery fire across this rugged, mountainous territory. Chinese troops attacked to ``teach Vietnam a lesson'' for invading Cambodia. The Chinese occupied Lang Son city for two weeks and virtually destroyed Dong Dang.

Road and rail service between Vietnam and China has been suspended since then, but growing trade and diplomacy has helped bring the two sides closer. Both countries recently withdrew troops from tense border positions. Vietnamese officials say overland links between Hanoi and the Guangxi capital of Nanning may be re-established within a year.

Says Pham Van Boi, a Lang Son provincial leader, ``Then we can exchange goods by car and by train, not by shoulders.''

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