Building Bridges on the Silk Road: A Strategy for Vietnam

Abstract

In March 2015, the Chinese government published an official document entitled “Vision and Actions on Jointly Building the Silk Road Economic Belt and the 21st-Century Maritime Silk Road,” commonly known by the Chinese as “One Belt, One Road” (OBOR, 2015). The purpose of this massive initiative is to instill vigor and vitality into the ancient Silk Road, connecting Asian, European and African countries and their adjacent seas, more closely and to promote mutually beneficial cooperation to a new high and in new forms. Despite the establishment of the initiative, there has been very little scholarly discussion on the role of foreign direct investment in the important countries on the Silk Road and the impact of these investments on the people of these less-developed regions of the world. Vietnam is a critical partner in this initiative because it shares both maritime and land frontiers with China. Vietnam also serves as China’s largest trading partner in the Association of Southeast Asian Nations (ASEAN), with two-way trade approaching $75 billion in 2016. China has always expressed a preference for bilateral negotiations in the contested waters of the Maritime Silk Road, despite efforts by ASEAN and other regional organizations to develop more multilateral approaches. Through empirical research, this paper analyzes the challenges and opportunities for China in advancing Silk Road initiatives bilaterally with Vietnam as one of its most important strategic partners. The paper also sets forth Vietnam’s strengths and challenges in integrating its own Five-Year Development Plan into strategic partnerships, regional trade agreements and bilateral arrangements on the Belt and Silk Road including how the country can improve its strategy for foreign direct investment. Through integrating the development strategies of Vietnam, the overall plans for expansion of the Belt and Maritime Silk Roads may become a reality, and serve as a model to facilitate trade and investment throughout the region.