Vietnam’s Lam puts local diplomacy up front with China

This week, Vietnam’s newly installed President To Lam headed to China, marking his first foreign visit since taking over for the now-deceased Nguyen Phu Trong.

Mainstream news coverage of his visit mainly focused on Vietnam and China’s close ideological and economic ties and Vietnam’s flexible “bamboo diplomacy” approach to foreign affairs.

To be sure, Lam signaled that the main aim of his visit was to engage Chinese leader Xi Jinping on key issues like railway development, managing tensions in the South China Sea, and strengthening overall cooperation.

Yet Lam’s first stop in China wasn’t its northern capital, Beijing. Rather, he began his trip by landing in southern Guangzhou, meeting with the Guangdong party secretary and encouraging Guangdong firms to expand investment in Vietnam.

While the province does not border Vietnam, Guangdong accounts for around a fifth of Sino-Vietnamese trade due in large part to the vibrancy of its firms.

The province’s economic weight in Vietnam is poised to strengthen as Chinese firms relocate production to the country and rely on proximate suppliers across the border.

In a survey of Chinese firms that have invested in Vietnam, the Vietnam Chamber of Commerce and Industry found that 59% of Chinese firms relied on home country suppliers, 15% higher than other types of firms.

Once overshadowed in their country’s development drives due to a long-simmering Sino-Vietnamese border conflict, these provinces now have renewed importance with the growth in manufacturing in Vietnam.

Chinese suppliers along the border provide inputs and intermediates to factories and producers in Vietnam, creating a tightly bound lattice of goods moving daily across state lines.

And provincial leaders are not