“China and Vietnam have gone at each other over territory for centuries and in 1979 fought a war on the border in question. In 2014 Vietnamese protested in the streets and their coast guard rammed Chinese vessels in the Gulf of Tonkin when Beijing allowed an oil rig to be towed into disputed waters. But Vietnamese officials take a practical view of foreign relations to maintain an export-led economy that grew 6.7% last year and is on track for something close in 2016. Vietnam is a member of the 12-country, U.S.-led Trans Pacific Partnership trade zone, but ratification by the U.S. Congress looks shaky at best. U.S. President-elect Donald Trump says aims to leave the partnership after he takes office next month, so Vietnam is particularly keen now to work with other countries.
With the list of perks offered by the development bank program, Vietnam is likely to jump at China despite being at the wrong end of the border trade dispute to date.
“Whatever brings money to the country, whatever makes investment bigger, they’re going go for it,” says Oscar Mussons, international business advisory associate with the Dezan Shira & Associates consultancy in Ho Chi Minh City. “Vietnam is still very dependent on China, and if there’s an opportunity to make it bigger or make it better they’re going to take it.”