To Lam, Vietnam’s newly elected president, made his initial official trip abroad since replacing Nguyen Phu Trong, who has since passed away, this year.
Vietnam’s and China’s close philosophical and economic ties, as well as Vietnam’s tactful “bamboo politics” approach to foreign affairs, were the main topics of mainstream media coverage of his visit.
To be sure, Lam gave the impression that the primary goal of his visit was to speak with Chinese President Xi Jinping about pressing issues like reducing tensions in the South China Sea, improving assistance nevertheless, and promoting cooperation.
But Lam’s first stop in China was n’t its northern capital, Beijing. Instead, he set off on a plane in southwestern Guangzhou, met with the party secretary, and urged Vietnamese companies to increase their investment there.
Guangdong accounts for roughly a fifth of Sino-Vietnamese business, largely due to the liveliness of its businesses, despite not being on its border with Vietnam.
As Chinese companies relocate their production to the country and depend on causal suppliers across the border, Vietnam’s financial weight is likely to increase.
The Vietnam Chamber of Commerce and Industry surveyed Chinese companies that have invested in Vietnam, finding that 59 % of them focused on domestic manufacturers, 15 % more than other types of businesses.
These provinces have since gained renewed relevance as a result of Vietnam’s growing manufacturing industry. They were after overshadowed in their country’s development efforts due to a long-running Sino-Vietnamese border conflict.
Producing and processing in Vietnam are provided by Chinese suppliers along the frontier, creating a strongly bound lattice of goods across state lines each day.
And municipal leaders are no squirming as they engage in a flurry of local political initiatives that make use of the present strength of Sino-Vietnamese business relations.
Asian municipal authorities have fought with both Hanoi and Chinese rivals to develop the area as a hub for trade and have established a strong presence there.
Chinese Cai met with Yunnan authorities, who are located just across the frontier, to discuss cooperation with business parks this time, and suggested a captain cross-border e-commerce area to connect Vietnam with the Chinese market.
Somewhere, China’s Guangxi has actively courted the north Asian border regions of Ha Giang, Quang Ninh, Lang Son and Cao Bang in regular meetings.
These efforts were rewarded by Quang Ninh’s purchase of power from Guangxi’s energy grid last year and the continuation of a Lang Son-Guangxi border gate, which had been closed during the pandemic and never returned until recently.
With Lam’s attend, Beijing and Hanoi are moving closer toward material plans to construct two high-speed trains. These lines may link the preceding borders states to the important ports of Haiphong and Hanoi if constructed on routine by 2030, which would significantly enhance Vietnam’s infrastructure and logistics capability.
While border areas praise and encourage for trade-promoting initiatives, tighter financial links have to be considered in the context of the country’s intensifying geopolitics.
To evade sanctions and other restrictions, the US is exceedingly monitoring and imposing sanctions on China’s business diversion through Southeast Asia, which could lead to further US trade restrictions on goods made in Vietnam.
China’s deepening system relationships with Vietnam, both in transportation and energy, even negate the two sides ‘ frictions in the South China Sea.
While managed to date, these conflicts may simply boil over as they have in the Philippines, putting Vietnam’s China-linked manufacturing systems at potential credit risk.
Regional diplomacy is a key component of Sino-Vietnamese relations, but they are not immune from wider geopolitical dangers that threaten to overshadow recent joint ventures along the Chinese-Vietnamese border.
Olivia Tan Jia Yi is top researcher at Singapore’s Onyx Strategic Insights. The opinions expressed these are her unique.