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China’s​ Silkroad and Its Effect On Laos and Vietnam

Last updated on October 6, 2019

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Since the launch of its Belt and Road initiative, China has been seeking to unlock opportunities for collaborating with its former Cold War comrade. But despite an urgent need to plug its one hundred billion dollar infrastructure gap growing nationalistic sentiments prevent Vietnam from fully embracing China’s new Silk Road and over and Laos joint projects ranging from malls to a mega railway are helping shape the country into osteons next investment hotspot.

But with the threat of a debt trap rising, will its increasing reliance on China ultimately become boon or Bane or landlocked Laos one country is seeking to mature its economy another is on the cusp of something big both share a neighbor who is promising support in exchange for a slice of their economic pie. Can the New Silk Road truly create a win-win situation for Vietnam, Laos, and China?

Over the past few years, Lao Cai has been at the forefront of Vietnam’s trade with China the border between Lao Cai and Jaco which means River mouth and Mandarin is located right at the convergence between Vietnam’s Red River and China’s Nancy River. Every day vast numbers of goods are transported over these rivers via three different border crossings by rail and by Road. But those without the luxury of wheels have a different border crossing experience one that’s a little more hectic.

It is literally a race across China and it happens every day look at them go carrying whatever they can in their baskets and trolleys sometimes a little too much. These farmers and vendors from the nearby Vietnamese hillsides are all competing to be the first to reach the local hook hole markets. The spots to sell their goods are not fixed but grabbed based on a first-come-first-served basis. Those who arrive late to the Chinese markets probably won’t be able to sell all their goods and they’ll be making that return trip back with full baskets and empty wallets and that is a walk of shame. No one wants to make forty-five-year-old vegetable sellers take part in this mad rush every morning. While the border gate opens at 7:00 a.m. every day the farmer’s day begins three hours earlier. The farmers spend more than an hour picking the freshest produce which they will later carry across the Hakko.

Imports and exports via Luke have totaled 1.6 billion US dollars just in the first half of 2018 and during those same six months the export of agricultural and seafood products from Lao Cai to China raked in more than 300 million dollars in revenue for the city. While the people of Lao Cai have certainly profited from cushy relations with China in the present you do wonder if their past ever gets in the way of their furthering this newfound friendship.

Vietnam’s invasion of Cambodia which was then under the rule of the china-backed Khmer Rouge in 17 days of bloody fighting thousands of Vietnamese died. In Vietnam, one of the osteon’s most dynamic economies in one of two communist countries in the Southeast Asian region and Vietnam’s embrace of its communist identity is hard to miss. Socialist posters can be found in public spaces across the country the national flag bears a variation of the iconic star a universally recognized symbol of communism there’s even a park dedicated to Vladimir Lenin in the heart of Hanoi. You’d expect China and Vietnam shared communist ideologies to smooth out the rough patches they’ve had in the past like the 1979 border war and the ongoing territorial disputes in the South China Sea. Or maybe not because both countries might still be reconciling their checkered history and that’s despite being comrades in arms during Vietnam most famous war ironically many Vietnamese still appear to be more forgiving towards the Americans whom they spent 20 years fighting than the Chinese who invaded the country in 1979. In fact, a recent survey found that 84% of Vietnamese viewed the United States favorably compared to 10% who Express positive attitudes towards China.

But the reality is in recent years it has been the Chinese, not the Americans that have been helping Vietnam develop some of its most critical infrastructures. The Vietnamese government continues to be caught in a tough balancing act while it recognizes the people’s attitudes towards China it also needs to raise more than a hundred billion dollars worth of investment to meet the country’s infrastructure needs. China’s extensive Belton Road initiative offers many opportunities for Vietnam to fill this wide infrastructure gap. A case in point is the Catlin urban railway line in Hanoi for which China provided more than 300 million dollars in loans. It also supplied the manpower and technology that was used in the railway’s construction. Chinese President Xi Jinping’s visit to Vietnam in November 2017 saw the signing of an MoU in which both China and Vietnam pledged to implement the belt and road initiative. But the question on many observers’ minds is whether the recent MOU would lead to any further substantial collaborations. So far not any project come from that initiative like many other countries

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