China
Vietnam hedges its bets on the BRI
Authors: Viet Dung Trinh, University of Queensland and Huy Hai Do, Hanoi University
The Belt and Road Initiative (BRI), launched in 2013 by Chinese President Xi Jinping, is considered an ambitious long-term strategy to promote the expansion of Chinese influence by providing countries in the region with aid and infrastructure investment. But in contrast with some Southeast Asian states which have largely embraced the BRI with open arms, Vietnam has adopted a hedging approach.
Hedging is characterised by three contradicting yet complementary features — avoiding opposition against and dependence on a rising power, engaging in both deference and defiance with a threatening power, and diversifying relations with other major powers.
Vietnam’s strategy towards China’s BRI displays all three of these features of hedging. While Vietnam’s endorsement of the BRI shows its desire to avoid confrontation with China, Hanoi is cognisant of the risk of economic dependence on Beijing and the opacity of BRI projects. Vietnam has proactively constrained its engagement in this initiative.
The only BRI project implemented in Vietnam has been Chinese investment in the Cat Linh–Ha Dong tramline, which encountered condemnation due to its ballooning cost and stagnating progress. The project was signed in 2008 and was due to be completed in 2016. But it was not completed until the end of 2021 and the cost of the project suddenly rose from US$552.86 million to nearly US$11 billion in 2018.
Vietnam has also started distancing itself from China out of fear of falling into a Chinese ‘debt trap’ and because of intensifying tensions in the South China Sea. For example, Hanoi denied Chinese funding for the Van Don–Mong Cai highway due to national security concerns. The highway connects Van Don, which was set to be a specialised economic zone in 2018 with Mong Cai, a city near the border with China.
Similarly, the cancellation of the North–South railway, which would have connected Vietnam’s two largest cities, and the Hanoi–Lao Cai highway, which would have run from the capital to a province near China, were both due to fear that Chinese capital provision would be interrupted. And Vietnam has opted out of Huawei involvement in developing 5G telecommunications infrastructure due to concerns about threats from Chinese intelligence agencies, and has instead endeavoured to develop its own 5G model.
In its hedging approach to the BRI, Hanoi has also diversified its relations with other powerful states. Sovereignty disputes with China in the South China Sea have fostered a closer relationship between Hanoi and Tokyo, which was highlighted in 2014 by the two sides’ efforts to upgrade their relationship to an extensive strategic partnership, grounded on shared goals of peace and prosperity. Vietnam has welcomed Japan’s Partnership for Quality Infrastructure Investment more warmly than the BRI and has received substantial infrastructure investment from Tokyo.
Vietnam has even enhanced its relations with its previous foe, the United States, to restrict China’s attempts at broadening its influence in the region. Vietnam and the United States have boosted their bilateral economic ties and improved defence cooperation. Vietnam has also supported the United States’ Free and Open Indo-Pacific Strategy by welcoming US contribution to regional peace and stability. During the Trump administration, two US aircraft carriers visited Vietnam.
Vietnam’s hedging strategy towards the BRI could provide valuable lessons for other ASEAN states when dealing with a rising and more ambitious China. Vietnam has partially succeeded in fostering cooperation with other major powers instead of depending on an unreliable neighbour. Less developed countries like Laos, Cambodia and Myanmar which have actively engaged in the BRI should consider adopting such a strategy in order to avoid falling into a Chinese ‘debt trap’ or becoming ‘chess pieces’ in China’s geopolitical game.
Restricting economic dependence on China could also help to forge closer bonds among ASEAN members. China has weaponised its economic power to break ASEAN’s unity and ability to form consensus. This is exemplified by the increasing aid and investment that China provided to Cambodia after Phnom Penh blocked ASEAN’s joint statement on tensions in the South China Sea. Cambodia seems to be accepting political dependence on Beijing in return for economic development. During the time that it has undermined ASEAN consensus on the South China Sea problem, Cambodia has…
Business
Gordonstoun Severs Connections with Business Led by Individual Accused of Espionage for China
Gordonstoun school severed ties with Hampton Group over espionage allegations against chairman Yang Tengbo. He denies involvement and claims to be a victim of political tensions between the UK and China.
Allegations Lead to School’s Decision
Gordonstoun School in Moray has cut ties with Hampton Group International after serious allegations surfaced regarding its chairman, Yang Tengbo, who is accused of being a spy for the Chinese government. Known by the alias "H6," Mr. Tengbo was involved in a deal that aimed to establish five new schools in China affiliated with Gordonstoun. However, the recent allegations compelled the school to terminate their agreement.
Public Denial and Legal Action
In response to the spying claims, Mr. Tengbo publicly revealed his identity, asserting that he has committed no wrongdoing. A close associate of Prince Andrew and a former Gordonstoun student himself, Mr. Tengbo has strenuously denied the accusations, stating that he is a target of the escalating tensions between the UK and China. He has claimed that his mistreatment is politically motivated.
Immigration Challenges and Legal Responses
Yang Tengbo, also known as Chris Yang, has faced additional challenges regarding his immigration status in the UK. After losing an appeal against a ban enacted last year, he reiterated his innocence, condemning media speculation while emphasizing his commitment to clear his name. Gordonstoun, on its part, stated its inability to divulge further details due to legal constraints.
Source : Gordonstoun cuts ties with business chaired by man accused of spying for China
Business
China Dismantles Prominent Uyghur Business Landmark in Xinjiang – Shia Waves
The Chinese government demolished the Rebiya Kadeer Trade Center in Xinjiang, affecting Uyghur culture and commerce, prompting criticism from activists amid concerns over cultural erasure and human rights violations.
Demolition of a Cultural Landmark
The Chinese government recently demolished the Rebiya Kadeer Trade Center in Urumqi, Xinjiang, a vital hub for Uyghur culture and commerce, as reported by VOA. This center, once inhabited by more than 800 predominantly Uyghur-owned businesses, has been deserted since 2009. Authorities forcibly ordered local business owners to vacate the premises before proceeding with the demolition, which took place without any public notice.
Condemnation from Activists
Uyghur rights activists have condemned this demolition, perceiving it as part of China’s broader strategy to undermine Uyghur identity and heritage. The event has sparked heightened international concern regarding China’s policies in Xinjiang, which have been characterized by allegations of mass detentions and cultural suppression, prompting claims of crimes against humanity.
Rebiya Kadeer’s Response
Rebiya Kadeer, the center’s namesake and a notable Uyghur rights advocate, criticized the demolition as a deliberate attempt to erase her legacy. Kadeer, who has been living in exile in the U.S. since her release from imprisonment in 2005, continues to advocate for Uyghur rights. She has expressed that her family members have suffered persecution due to her activism, while the Chinese government has yet to comment on the legal ramifications of the demolition.
Source : China Demolishes Uyghur Business Landmark in Xinjiang – Shia Waves
China
China Expands Nationwide Private Pension Scheme After Two-Year Pilot Program
China’s private pension scheme, previously piloted in 36 cities, will roll out nationwide on December 15, 2024, enabling workers to open tax-deferred accounts. The initiative aims to enhance retirement savings, address aging population challenges, and stimulate financial sector growth.
After a two-year pilot program, China has officially expanded its private pension scheme nationwide. Starting December 15, 2024, workers covered by urban employee basic pension insurance or urban-rural resident basic pension insurance across the country can participate in this supplementary pension scheme. This nationwide rollout represents a significant milestone in China’s efforts to build a comprehensive pension system, addressing the challenges of a rapidly aging population.
On December 12, 2024, the Ministry of Human Resources and Social Security, together with four other departments including the Ministry of Finance, the State Taxation Administration, the Financial Regulatory Administration, and the China Securities Regulatory Commission, announced the nationwide implementation of China’s private pension scheme effective December 15, 2024. The initiative extends eligibility to all workers enrolled in urban employee basic pension insurance or urban-rural resident basic pension insurance.
A notable development is the expansion of tax incentives for private pensions, previously limited to pilot cities, to a national scale. Participants can now enjoy these benefits across China, with government agencies collaborating to ensure seamless implementation and to encourage broad participation through these enhanced incentives.
China first introduced its private pension scheme in November 2022 as a pilot program covering 36 cities and regions, including major hubs like Beijing, Shanghai, Guangzhou, Xi’an, and Chengdu. Under the program, individuals were allowed to open tax-deferred private pension accounts, contributing up to RMB 12,000 (approximately $1,654) annually to invest in a range of retirement products such as bank deposits, mutual funds, commercial pension insurance, and wealth management products.
Read more about China’s private pension pilot program launched two years ago: China Officially Launches New Private Pension Scheme – Who Can Take Part?
The nationwide implementation underscores the Chinese government’s commitment to addressing demographic challenges and promoting economic resilience. By providing tax advantages and expanding access, the scheme aims to incentivize long-term savings and foster greater participation in personal retirement planning.
The reform is expected to catalyze growth in China’s financial and insurance sectors while offering individuals a reliable mechanism to enhance their retirement security.
| This article was first published by China Briefing , which is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in in China, Hong Kong, Vietnam, Singapore, and India . Readers may write to info@dezshira.com for more support. |
Read the rest of the original article.
- Gordonstoun Severs Connections with Business Led by Individual Accused of Espionage for China
- China Dismantles Prominent Uyghur Business Landmark in Xinjiang – Shia Waves
- China Expands Nationwide Private Pension Scheme After Two-Year Pilot Program
- How a scandal over sanitary pads is shaping feminist activism in China
- Yakult Unveils Restructuring Plans for Its China Operations | ESM Magazine
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