Financial Times
May 29, 2012 6:35 pm
By Ben Bland in Mong Cai
Although it looks to be the easiest way to move goods across the narrow river that separates the Vietnamese city of Mong Cai from China, there is surprisingly little traffic on the official border bridge.
Apart from a few Vietnamese tourists returning from China with cheap electronic goods and the odd truck passing through, there is little to suggest that the city is one of the busiest transit points for the extensive trade between these two Communist neighbours, which reached $36bn last year.
The reason is clear to the naked eye. Just a few hundred metres away, in both directions, dozens of barges are landing every few minutes to ship contraband through the numerous illegal crossing points dotted along the river for miles in either direction.
In the past few years, Mong Cai has emerged as an international smuggling nexus, funnelling illegal goods from around the world to feed China’s soaring demand for everything from women to banned electronic waste products to tiger penis for use in traditional medicine. This illegal trade is extensive and well-organised and, remarkably, much of it takes place in plain sight.
The surge in smuggling mirrors the fast-developing trade relationship between the two countries. Vietnam exported $11bn of mostly raw materials to its northern neighbour last year and imported $25bn of finished goods, making China its biggest trading partner. These figures do not take into account the large quantities of smuggled goods, for which no reliable estimates exist.
There are many trade hubs along the Vietnam-China border but Mong Cai is one of the busiest. The physical ease of transporting goods across the river border, the city’s proximity to the Vietnamese port of Haiphong and the lack of local policing have made it attractive to organised criminals.
Although apparently tolerated by officials in Mong Cai, the situation in the city of 100,000 is causing growing international concern. As far away as Washington, London and The Hague, officials fear that the city’s lax border controls are being exploited by international criminal organisations and sabotaging efforts to fight environmental crime and people trafficking.
“The smuggling problem at Mong Cai seems to be getting worse,” says a western diplomat in Hanoi, who has travelled to the city to look into the problem. “We have no idea how much money they’re making but it must be huge and this can’t possibly be going on without the knowledge of the authorities.”
The UN Organisation on Drugs and Crime says it is “very concerned about lax border controls at Mong Cai” where the open trade of illicit goods is benefiting organised criminal groups.
The local government claims that this trade is merely “transhipment” as most of these products do not originate in Vietnam. But western diplomats and international law enforcement officials say that transit countries such as Vietnam have a key role to play in breaking up international smuggling syndicates. And they believe the Vietnamese government is failing to tackle the problem.
Mong Cai has the feel of a 21st-century wild west. Residents say rival gangs armed with automatic weapons and grenades regularly clash with each other and the authorities.
“Mong Cai has developed very rapidly over the last 10 years because of trade,” says Vy Thi Lai, who sells Chinese-made shoes at the central market. “But there are many young people stealing, fighting and killing, using guns over small conflicts. It’s normal here.”
Much of the illegal trade is being driven by growing Chinese demand. Vietnamese women are wanted to work in the sex trade or as wives in a country suffering from a shortage of women of marriageable age. Exotic animals are highly prized, either as meat, as pets or for traditional medicine. Electronic waste such as old computer screens can be scavenged profitably for spare parts in China, albeit with adverse health and environmental consequences.
International law enforcement officials and diplomats say that security has been beefed up at China’s main ports in recent years, prompting smugglers to move contraband through the notoriously permeable Vietnamese port of Haiphong and then on to Mong Cai, 230km to the north. From here, it can easily be taken across the Ka Long river, which separates the city from China’s Guangxi province, without any official checks.
Observers of the smuggling trade say that as many as 1,500 vehicles traffic goods every day through the busiest unofficial crossings in Mong Cai, each paying border officials $10-$20 in bribes for right of passage.
Unofficial and illegal trade in Mong Cai accounts for as much as 98 per cent of all cross-border traffic, says Scott Roberton, who heads the Vietnam office of the Wildlife Conservation Society, an international NGO that has been researching the problem since 2009 and recently presented its findings to the Vietnamese government.
The suspicion that corruption and collusion are fuelling illegal trade at Mong Cai is deeply embarrassing for the authoritarian, Communist governments of China and Vietnam. Neither country’s foreign ministry responded to requests for comment.
Nguyen Tien Dung, vice-chairman of the Mong Cai government, denies that smuggling is a big problem.
“On the Vietnamese side, everything is checked by customs at many points along the river,” he says. “What checks the Chinese do is their business, not ours.”
