But Lam’s first stop in China was not the capital Beijing. He began his trip in Guangzhou, where he met the party secretary of Guangdong and encouraged the province’s companies to expand their investments in Vietnam.
Although the province does not border Vietnam, Guangdong accounts for 20 percent of Sino-Vietnamese trade, thanks in part to the dynamism of companies based there. The province’s economic weight in Vietnam is likely to increase as Chinese companies shift some of their production to the country and rely on nearby suppliers across the border.
A survey by the Vietnamese Chamber of Commerce and Industry among Chinese companies investing in Vietnam found that 59 percent of these companies rely on domestic suppliers, 15 percentage points more than other types of companies.
This kind of local economic diplomacy is not limited to Guangdong. Across the border in the northern province of Lao Cai, a traditionally mountainous and agricultural region, local politicians have lobbied both Hanoi and Chinese authorities to develop the region into a trade hub. Lao Cai proposed a pilot zone for cross-border e-commerce as a bridge between Vietnam and the Chinese market, and its officials met this year with representatives from Yunnan, just across the border, to collaborate on industrial zones.
Elsewhere, Guangxi officials met with their counterparts from the Vietnamese border provinces of Ha Giang, Quang Ninh, Lang Son and Cao Bang. Those efforts bore fruit: Quang Ninh bought electricity from Guangxi’s power grid last year and a border crossing between Lang Son and Guangxi that was closed during the Covid-19 pandemic was reopened.
These provinces were once affected by years of simmering border conflict between China and Vietnam. Now they have an opportunity to accelerate their growth and secure resources from both governments by positioning themselves as key players in a “China plus one” shift in supply chains. Indeed, Sino-Vietnamese relations may depend as much on relations between Beijing and Hanoi as on local economic diplomacy efforts across the border.
Olivia Tan, Singapore
When it comes to energy, China has the best of both worlds
China is definitely no beggar, and its commitment to renewable energy sources such as solar, wind and water means it can pour money into new projects. But China still spends money importing fossil fuels from abroad.
In fact, it combines the best of both worlds, like a ship using its sails and its propeller at the same time.
Mergen Mongush, Moscow