Amidst geopolitical tensions and adversarial relationships, a quieter yet significant shift in economic dynamics is reshaping the landscape of influence in Southeast Asia. Often overlooked by Western media and overshadowed by political narratives, Chinese investment in Vietnam has witnessed a notable twofold increase this year. Amid the United States grappling with a slowdown in spending and trade, China is seizing the opportunity to solidify its economic presence in the region.
The numbers speak volumes: registered Chinese investment, including Hong Kong, surged to $8.2 billion in the first 11 months of this year, doubling the figures from the previous year. In contrast, US registered investment dwindled to a mere $0.5 billion, ranking 10th behind unlikely contenders like Samoa and the Netherlands. The implications are clear – China is becoming the economic linchpin in Vietnam, with profound consequences for the broader balance of power in the region.
This shift is not merely about numbers on a balance sheet; it reflects a strategic realignment in global supply chains. The manufacturing hub along the South China Sea is emerging as a pivotal link, integrating Chinese components and catering to US consumers. While President Joe Biden sought a diplomatic upgrade with Vietnam, it appears that China, with President Xi Jinping’s recent visit, has taken the lead, emphasizing a shared destiny and potentially signalling a formal upgrade of diplomatic relations.
The economic ascendancy of China in Vietnam is, in part, a consequence of US trade policies and the escalating tensions between Washington and Beijing. The ripple effect of US-led sanctions on China has accelerated Chinese investment in Vietnam, further emphasizing the unintended consequences of a confrontational approach.
It’s crucial to recognize that economic influence is not confined to investment figures alone; it extends to trade relationships and the intricacies of global supply chains. Bilateral trade between Vietnam and the United States has faltered, with exports plummeting by 15% to $79.25 billion in the first 10 months of the year. In stark contrast, Vietnam’s exports to China increased by 5% to nearly $50 billion, underscoring the economic prowess China wields in the region.
However, the story is not without complications. Disputes over boundaries in the South China Sea and anti-Chinese sentiment among the Vietnamese populace pose challenges. Striking a balance between economic cooperation and national sentiments is a delicate task that requires nuanced diplomacy.
While Western media may not be paying adequate attention to this seismic shift, China’s economic influence is not limited to Southeast Asia alone. The burgeoning trade between China and Russia, exceeding $200 billion ahead of schedule, reflects an expanding economic partnership. The growth rate in China’s trade with Russia surpasses that with major partners like the EU and the US, solidifying the two nations’ commitment to mutual cooperation.
The China-Russia east-route natural gas pipeline project, a testament to the success of energy trade, underscores the depth of collaboration. Beyond the numbers, it symbolizes a high level of political trust and a commitment to a shared future.
As we navigate these changing economic currents, it’s imperative to move beyond simplistic narratives and recognize the complexities at play. A constructive approach to diplomacy, trade, and international relations is essential to fostering stability and shared prosperity in an interconnected world. The rise of China in Southeast Asia is a wake-up call – an opportunity to reassess strategies and build relationships based on mutual respect and understanding. The question remains: Will the world heed this call and embrace a new era of cooperation, or will it continue down the path of confrontation and missed opportunities? The choice is ours to make.