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Vietnam's tug of war with China over Laos

Vientiane [Laos], October 13 (ANI): Despite Vietnam's efforts to improve its relationship with Laos, the latter is moving towards China, as the nation is trying to gain benefits from Beijing's economy and Belt and Road Initiative (BRI) infrastructure.

This year, Vietnam, to improve its relationship with Laos, went on high-profile visits, extensive cultural exchanges, and signing of several agreements involving various ministries, but the country has its own intention behind its move, The Singapore Post reported.

Laos is located adjacent to China, Vietnam's long-time rival and its border with Vietnam is 2,161 kilometres long, about twice as long as its borders with Beijing or Cambodia. Vietnam is aware of this and will make every effort to support the Lao People's Revolutionary Party's (LPRP) ruling.

Meanwhile, the LPRP's presentation of unity and independence could be disturbed by China's overt presence, which has the potential to exacerbate populist and ethnic frustrations in the ethnically divided Lao nation. Therefore, in order to avoid these underlying tensions, the LPRP has an incentive to reduce its overdependence on China.

The fast emergence of China in Lao territory has caused unease and ambivalence among the general public. The young entrepreneurs of Laos are attracted to China's economy and its language.

The growing misgivings about China have also led the country's ruling Lao People's Revolutionary Party (LPRP) to abandon its long-standing isolationist policies, according to The Singapore Post.

Laos is turning to China, considering its current its current debt crisis. Laos owes about half of its foreign debt to China, which opened the gate for infrastructural projects.

China lent the money for the projects such as hydropower plants, publicly guaranteed debt and railway lines. Mostly, the loans for infrastructural projects came from the China Development Bank (CDB) and the Export-Import (Exim) Bank of China.

The Covid situation also played an important role in affecting the Laos economy. Due to the COVID situation, the country saw a massive decline in tourism revenue, a breakdown of supply chains, and a loss of up to USD 100 million in remittances from workers forced to return from Thailand have added to the financial cost of the pandemic.

This contrasts with Vietnam's more upbeat outlook, which has benefited from businesses moving there for both political and economic reasons. Laos also has the most direct access to the sea through Vietnam. Laos will not have many reasons to turn away from its ally as long as Vietnam's economy is still competitive, reported The Singapore Post.

The Lao public has also taken notice of the increasing influx of Chinese goods and infrastructure into Laos. Chinese-led BRI infrastructure projects have a history of displacing local populations and frequently use Chinese labourers and supervisors. The local economy suffers, and as a result, conflicts between Chinese workers and locals worsen, and residents' perceptions of their government, which knowingly permits these disruptive enterprises, are strained.

In the end, Laos is significant to China, but crucial to Vietnam. China finds Laos' domestic issues inconvenient, but Vietnam is concerned about them, according to The Singapore Post. (ANI)