Quan hệ kinh tế của Trung Quốc với Lào từ năm 1989 đến nay và hàm ý cho Việt Nam (tt)

VIETNAM ACADEMY OF SOCIAL SCIENCES
GRADUATE ACADEMY OF SOCIAL SCIENCES
-----------------------------------

LE THI HUONG TRA

CHINA – LAOS ECONOMIC RELATIONS FROM 1989 TO PRESENT
AND ITS IMPLICATIONS FOR VIETNAM

Major: International Economics
Code: 9 31 01 06

SUMMARY OF THE PHD’S DISSERTATION

HANOI – 2018


Dissertation is completed at:

GRADUATE ACADEMY OF SOCIAL SCIENCES
VIETNAM ACADEMY OF SOCIAL SCIENCES

SUPERVISORS: 1. Prof. Dr. Nguyen Duy Dung
2. Dr. Nguyen Xuan Cuong

Reviewer 1: Prof. Dr. Ngo Duy Ngo

Reviewer 2: Prof. Dr. Doan Xuan Thuy

Reviewer 3: Prof. Dr. Phi Manh Hong

The dissertation will be defended in front of the Committee at
Graduate Academy of Social Sciences, Vietnam Academy of Social
Sciences, 477 Nguyễn Trãi Street, Thanh Xuân District, Hanoi.
On .... / .... / 2018

The Dissertation can be found at:
- Vietnam National Library
- Graduate Academy of Social Sciences’ Library


INTRODUCTION
1. Rationale of the dissertation
In term of economic geography, Laos is located in an important and
strategic location with China: Laos is the only landlocked country in the
center of Mainland Southeast Asia, bordered by Yunnan Province of China
– an important province in ”The Great Western Development Strategy” – to
the North, Myanmar to the Northwest, Thailand to the West, Cambodia to
the South and Vietnam to the East. Thanks to such strategic location, Laos
plays a essential role as an important “gateway” in Beijing's Regional
Strategy. Currently, in a near future, Laos may become a competitive area
which has significant influences to strategies of various powerful countries,
especially in the context that China has been developing global and national
strategies such as establishment of a powerful maritime nation, or
cooperation initiatives such as “One Belt, One Road” (the Silk Road
Economic Belt and 21st Century Maritime Silk Road), etc.
In term of economy, Laos plays an important part in China –
Southeast Asia connection strategy because it is located in the East-West
Economic Corridor of countries of the Mekong Subregion and the NorthSouth Economic Corridor. Laos is also a member of Greater Mekong
Subregion Economic Cooperation Program. Currently, Laos has operated
its economy in Nanning–Singapore economic corridor under management

of China in which a cross-border rail has been designed to connect
Kunming (Yunnan, China) with Vietnam, Laos, Thailand and Singapore by
crossing Yuqi, Mengzi and Hekou City.
Between the Lao People’s Democratic Republic and Socialist
Republic of Vietnam, there has been existed a “special”, closed and very
fast relations since Two Wars of Resistance against French Colonialism
and American Imperialism. The comprehanesive relations between two
nations has been enhanced through every historical duration. However, in
current internationalization and globalization, both countries have to be
active in the socio-economic development, as well as diversification and
multilateralization of their own economic relations. Thus, in specific case,
due to different calculation of countries in the economic sector, the bilateral
economic relations is also influenced. Especially, with the clearer and

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clearer existence of the “Chinese economic factor” in both Laos and
Vietnam, the Vietnam – Laos relations has been significantly affected. The
strong increase of “Chinese economic factor” in Laos has been put more
presure on Vietnam economic factor in Laos, even dislodged Vietnam
economic factor from Laos. It is considered as a risk of Vietnam because
the“Chinese economic factor” may cause impacts to other factors in the
Vietnam – Laos relations . Therefore, a comprehensive and systematic
study on China – Laos relations will contribute a significant part in
determination of the Vietnam – Laos relations. As a result, this study bring
a practical value in current period.
Besides, researches related to China – Laos relations currently have
been gained interest from inland scholars. The study on these two nations in
general and China – Laos relations in particular, however, aims to explain

various important academic issues. If we can thoroughly understand this
relations , our Communist Party and Government will have scientific basis
to make diplomatic policies in conformity to current complex situations.
Thus, comprehensive and systematic study on specific relation between
China – Laos relations and Vietnam has currently become one of the most
urgent issues.
The strong impacts to Laos, especially in the economic sector
caused by China has been leading to influences to Vietnam. In spite of high
demand on consciousness, there was a shortage of systematic and advanced
studies. Therefore, the study on China – Laos relations and clarification of
impacts caused to Vietnam brings both scientific and practical value, as
well as high imperiousness. By such consciousness, I decided to conduct
my PhD dissertation with the official title “China – Laos Economic
Relations from 1989 to Present and Its Implications for Vietnam”.
2. Aims and the Mission of the dissertation
2.1. Aims of the dissertation
On the basis of systematic presentation, analysis and evaluation of
China – Laos relations from 1989 until now, the Thesis shows sucesses and
matters of this economic relation, as well as clarify nature and features of
the economic relation between aforementioned nations. Then, the Thesis
states influences caused to Vietnam and proposes some solutions to help
Vietnam adapt to such influences.

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2.2. Mission of the dissertation
- Clarify theoretical and practical issues in China – Laos relations .
- Present, analyse and evaluate the actual situation of China – Laos
economic relations from 1989 to present; show major characteristics,

successes, problems of this relations and their root causes.
- Show influences of this relations to general implemetation of
diplomatic polies of China and Laos with Southeast Asia and Vietnam.
- Withdraw some implications for Vietnam during international
economic policy-making for national development.
3. Objects and research scope of the dissertation
3.1. Objects to the dissertation
The dissertation focuses on analysing the nature of China – Laos
relations from the relation normalization between two parties (1989) until
now, especially since the establishment of strategic partnership. The
dissertation also studies influences of this relations to other subjects,
especially Vietnam.
3.2. Research scope of the Thesis
The scope of Space: Activities in economic cooperation of China
and Laos shall be analysed.
The scope of time: From 1989 to present. However, due to long
duration, beside the historical view of economic relations between two
nations, the dissertation focus on current years, especially the period from
the establishment of comprehensive and strategic partnership in 2009 until
now.
The scope of content: The dissertation concentrates on analyzing
following major issues: (i) Literature review and actual status of the
relations between the two nations: these are considered as extremely
important issue to identify the academic orientation in a logical manner
when explaining ideas in the dissertation; (ii) Actual status of the relations
between the two nations in specific aspects such as trading, investment,
assistance and HR cooperation. Due to complex issues in relations of the
two nations and limitation of a PhD dissertation, I just select above essential
issues for analysis to clarify the economic relations between nations and
ensure the concentration and specialization of the research.

Besides, the dissertation also analyses economic activities in

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Yunnan – the “pioneer” of China in enhancement of economic relations
with Laos, including cross-border economic cooperation between the two
nations; (iii) Evaluation of influences and orientation of China – Laos
relations : In this case, the Thesis focuses on influences caused to subjects
such as Laos (majorly), China and Vietnam – Laos economic relations .
Currently, the dissertation predicts China – Laos relations in specific
aspects such as trading, investment, assistance and HR cooperation.
4. Research Method and Approaches
In this dissertation, the Author applied the methodology of
dialectical materialism and historical materialism in combination with other
methods such as statistical analysis, logical method, general analysis,
documentation method and expert evaluation methods
5. New scientific contributions of the dissertation
- This is the first systematic study on China – Laos relations in
Vietnam; therefore, the Thesis will provide an overview of operation, as
well as features and nature of this economic relations .
- The dissertation analyses and clarifies the asymmetrical economic
relations between one side – a nation with the strongest economy in Asia
and the second-rank economy in the world and the other side – a nation
with the small scale economy and low development level. Then, the Thesis
will assess advantages and challenges of small and low competitive
economy when cooperating with a great economy.
- The dissertation clarifies how the China –Laos relations
influences to development of Laos and Vietnam economy in Laos. Then,
the Thesis proposes basic solutions to promote the Vietnam – Laos

economic relations in the coming time with the pressure from domestic
economic factors.
- The dissertation also explains and clarifies a logic in China –Laos
economic relations: With features of current China – Laos economic
relations, the faster development of bilateral economic relations, the higher
dependence on China of Laos economy.
- The dissertation also clarifies reciprocal influences between
economy and politics based on the analysis of China – Laos economic
relations .

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- Based on actual status of this relations, the dissertation withdraws
some implications and proposes some policies for Vietnam to make
international economic policy for national development.
6. Theoretical and practical meaning of the dissertation
6.1. Theoretical meaning
The dissertation supplements and clarifies the analysis of
asymmetrical economic relations between a great economy and a small one,
which helps us understand thoroughly about motion rule of the economic
relations between Laos and China. This will contribute a part in
clarification of economic rules in the economic relations between Laos, as
well as other nations with low development level and China. In other hand,
the study will diversify existed economic viewpoints: China has been
applied the “go out” policy; accordingly, this country develops its economy
at any cost to reach a high speed of economic development, leading to
significant corollary to further sustainable development.
6.2. Practical meaning
- The dissertation will become a valued reference for study on

China – Laos economic relations , as well as the international economic
relations of China.
- The dissertation provides systematic scientific evidences to
policy-maker in Vietnam. These evidences may be used for reference
during economic policy making of Vietnam – Laos relations in the context
of China – Laos economic relations enhancement.
7. Dissertation structure
Beside the Introduction, Conclusion, List of Tables, Schedules,
Abbreviations and References, the Thesis is divided into 04 Chapters as
follows:
Chapter 1: Literature Review
Chapter 2: Theoretical and practical basis related to China – Laos economic
relations
Chapter 3: Impacting factors, current status and characteristics of ChinaLaos economic relations from 1989 to the present day
Chapter 4: Impact, trends of China – Laos economic relations and some
implications for Vietnam

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CHAPTER 1
LITERATURE REVIEW
1.1. Typical studies on China and Laos
China and Laos have been subjects to various studies of authors
such as: Truong Duy Hoa – Chief Editor of the study “ Some Issues Related
to Economic – Politic Orientation in Lao People's Democratic Republic in
the First Two Decades of 21st Century” (Social Science Publishing House,
Hanoi 2012); Nguyen Duy Dung – Chief Editor of the study “Vietnam –
Laos – Cambodia: Friendship, Cooperation and Development”
(ICPublisher, 2012). In this Thesis, the Author also states that Vietnam,

Laos and Cambodia are located in the Indochina with joined mountains and
rivers; countries have culture closed to each other; they always give each
other support and assistance in any circumstances.
Beside, Chinese studies such as “Diplomatic Strategies and Policies
of China” written by So Thu Long and Kim Uy – researchers on
international relations – and published by China’s News Publishing House.
This study focuses on diplomatic strategies and policies of China by
analyzing the basis and foundation for Chinese diplomacy such as overview
of Chinese history in early modern period; cultural tradition, philosophy,
theoretical basis on politic thought; some conceptions of Chinese to the
world.
1.2. Publications related to China – Laos economic relations
Currently, the number of studies related to China – Laos economic
relations has been significantly increased, especially typical works of
inland researchers, namely: Author Tran Thi Hai Yen with “Economic
Relations between Yunnan (China) and Laos” on Southeast Asian Studies
Review; Author Duong Van Huy with “China enhanced the strategic
influences to Laos” (Science and Strategy Review, volume 4, April 2014).
From the aforementioned publications, it can be seen that: Laos has a
strategic location which is extremely important to China; therefore, in
recent years, China has been active in enhancement of comprehensive and
powerful influences to Laos. Besides, in the work “Participation of China to
Great Mekong Subregion cooperation” (Southeast Asian Studies Review,
volume 11), Author Nguyen Anh Dung (2016) studied China’s cooperating

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mechanism with countries of GMS, especially infrastructure projects
connecting China to countries of this region. Furthermore, in “China

Relations with Laos and Cambodia”, in China Internal and External
Relations and Lessions for Korea and Asia”, Carlyle A. Thayer stated that
China has increased its influences to Laos and Cambodia in all aspects,
especially economy and politics in the future.
1.3. General assessment of studies
Current studies are short of comprehensive and systematic research
on China – Laos relations (including issues in both the past and the
present).
Model and structure of China – Laos relations has not been
clarified to evaluate opportunities and risks of this economic relations.
Existed studies have not been assessed impacts of aforementioned
process to Vietnam – Laos relations and Lao – Vietnam relations in the
coming time.
1.4. Directions of the dissertation
The dissertation clarifies theoretical basis of China – Laos
economic relations from 1989 until now and model this “asymmetric
economic relations”.
The dissertation clarifies actual status of the economic relations
between nations in specific aspects and motion trend of this relations in the
coming time.
The dissertation clarifies the closed relation between economy and
politics in the China – Laos economic relations to predict some risks for
Laos’ further development, especially economic risk.
The dissertation withdraws some implications for Vietnam during
international economic policy-making for national development
The dissertation evaluates the further economic relations between
China and Laos in the coming time in different aspects.
1.5. Research question
* General research question: After analyzing actual status, model and
motion trend of China – Laos economic relations from 1989 until now of

this relations, the dissertation found the nature of this “asymmetric
economic relations”, as well as its impacts to each country and their

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bilateral relations . Concurrently, the dissertation also identifies influences
to Vietnam and Vietnam – Laos relations.
* Arising research question
* Derivative research question:
- How the China – Laos relations developed from 1989 until now?
- How is the relations between two nations in specific aspects? How
China – Laos relations influences to Laos economy and Vietnam – Laos
economic relations?
- China’s control enhancement to Laos economy may cause risks to
Laos during the economic development with China. Especially, the increase
of “over export of resources” will decline natural resources, foster
unsustainable economic development and lead to other consequences for
Laos economy.
- Predict China – Laos economic relations in the coming time, as
well as impacts of this process to Vietnam, especially in economic sector.

Chapter 2:
THEORETICAL AND PRACTICAL BASIS RELATED TO
CHINA – LAOS ECONOMIC RELATIONS
2.1. Theoretical basis
2.1.1. Definitions of international economy
2.1.2. Typical theories
2.1.3. Model of China – Laos economic relations
2.2. Practical basis of China – Laos economic relations: a study on

China – Myanmar economic relations
2.2.1. Evolutions of regional situation that affects to China – Laos
economic relations
Firstly, resurgence of China and Beijing’s amendment of
diplomatic strategies.
Secondly, increase of the US existence and re-involvement in the
region.
2.2.2. Development of regional cooperation mechanism
Firstly, the development of ASEAN-China Free Trade Area

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Secondly, the development of cooperation among countries of the
Great Mekong Subregion
2.2.4. Demand of China and Laos on increase of bilateral economic
relations
2.2.5. Evolutions of politic – diplomatic relations of two countries,
fostering the bilateral economic relations
2.3. Conclusion of Chapter 2
In this chapter, we analyze the reason why the study on China –
Laos economic relations from relation normallization (1989) until now is
decided. Besides, overseas and domestic study related to China – Laos
economic relations are also analysed. We found that there existed a blank
space in studies and such blank space is extremely urgent in Vietnam.
Concurrently, in this study, we focus on theoretical basis to clarify actual
status of economic relations between two nations and model this
“asymmetric economic relations”.

Chapter 3:

IMPACTING FACTORS, CURRENT STATUS AND
CHARACTERISTICS OF CHINA-LAOS ECONOMIC RELATIONS
FROM 1989 TO PRESENT
3.1. Impacting factors on China-Laos economic relations
3.1.1. Changes of international and regional situation impacting on ChinaLaos economic relations
Firstly, the rise of China and the adjustment of Beijing's strategic
diplomacy.
Second, the increase in US presence and re-engagement in the
region.
3.1.2. Development of regional co-operation mechanism
Firstly, the development of the ASEAN-China Free Trade Area
(ACFTA).
Secondly, the development of Greater Mekong Subregion (GMS)
cooperation
3.1.3. Impacts from factors of China and Laos

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3.1.4. Demands of China and Laos in the improvement of bilateral
economic relations
3.1.4. Changes in diplomatic and political relations of two countries
contributing to improve bilateral economic relations
3.2. Current status of commodity trading relations of China and Laos
3.2.1. Changes in commercial quota of China and Laos
* The period from 1989 to 2009: It can be seen that in the period of
20 years (1989-2009), bilateral trade of two countries increased steadily,
and rapidly during the period of world economic crisis (2008-2009) .
However, the trade balance of two countries at that time was largely
towards China.

* Period from 2010 to 2016: During this period, China increased
importing from Laos, especially minerals and agricultural products. This is
in line with tightening economic relations between the two countries in
recent years.
3.2.2. Changes of import and export value in commercial relations
between two countries
* Period from 1989 to 2009: During this period, Laos mainly
excess imports over exports from China.
* Period from 2010 to 2016: In 2009, bilateral trade turnover
remained at a substantial level, starting with 2010, China's import turnover
from Laos was over China's export turnover to Laos, China's imports over
exports situation in the co-operation from Laos increased.
3.2.3. Structure of import and export commodity of China and Laos
Laos has increasingly exported more resources to China that has
been and will affect worse and worse to the sustainable development of
Laos, because one of Laos’ strengths is the environment, but now the
environment is increasingly destroyed. In the near future, Laos will lose its
competitive advantage in economic cooperation with foreign countries in
general.
China has been promoting bilateral trading activities with Laos. This makes
China’s goods be flooded more and more into Laos, competing with goods
from other countries such as Thailand and Vietnam. Laos’ manufacturing
industries, especially young and small ones are also confronted with

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competitive pressures and "premature death" from the massive influx of
China’s goods.
3.2.4. Development of border trade between China and Laos

Yunnan is the unique province of China having the frontier line
bordering with Laos, thus this province plays the leading role in promoting
the China-Laos relations . Only within 15 years, trade turnover between
Yunnan – Laos increased over 70 times, developed in both width and depth.
Although during recent years, there has been new development in both the
width and depth, the trade relations between Yunan and Laos is still
remaining certain challenges and difficulties.
3.3. Investment of China and Laos
3.3.1. Changes of investment scope and speed of China and Laos
Investment activities of China at Laos began from 1998-1999,
however it only increased strongly since the beginning of the 21st century.
China in the current period is flooding to invest in Laos, expanding both
scope and fields of investment.
3.2.2. Investment structure and fields of China at Laos
The significant increase in Chinese investment is concentrated
mainly in the following fields:
Firstly in the fields of infrastructure construction, transportation
Secondly in the fields of mineral mining, agriculture and forestry.
Thirdly in the field of energy extraction
Fourthly in the field of information, telecommunications
Fifthly in the field of finance
Sixthly in the field of agriculture
Seventhly in the field of industry
Eighthly in the field of tourism
3.4. Aid of China for Laos (ODA)
3.4.1. Increases in aid scope of China at Laos
In the case of looking at China's investment and aid sectors, it is
clear that China's economic activities in Laos are growing at a rapid rate.
With the such current speed of economic growth of China to Laos, China
will become the "top" one among Laos' economic partners in the next 5 to

10 years.
3.4.2. Aid structure of China to Laos

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China’s aid focuses mainly on the weak and urgent areas for
economic development in Laos, especially in the field of infrastructure
construction. As mentioned above, during recent years, China has signed a
number of investment projects funded by Beijing's ODA with Laos,
especially traffic projects such as roads, railways, airline) and hydropower
projects
3.4.3. Co-operation in human resource and tourism
Firstly, human resources cooperation between two countries has
been strengthened in recent years. China supports in training human
resources for Laos. China's educational assistance for Laos is primarily the
increase of training scholarships for Lao and the strengthening of short-term
training for Lao officials.
Secondly, Chinese tourists coming to the local border tourism areas
of Laos increased rapidly, on the one hand they visited the tourism, but on
the other they came to seek business opportunities, evenly for immigration.
3.5. Evaluate the economic relations between two countries in some
fields
3.5.1. Evaluation of trade relations between two countries
* Positive points: Increasing Laos's exports to China is always at the
position of surplus export, which increases Laos's revenues and improves
Lao people’s life. On the other hand, China exports lot of consumer goods
into the Lao market, which makes it possible for Laos to compensate goods
that the country has not produced and create competition with its other
trading partners such as Thailand, Vietnam.

* Challenges:
Firstly, Laos mainly exports raw materials, thus the importexport balance is increasing towards Laos and the trade balance is
increasing that also means the more and more loss of Laos’ resources. This
is a manifestation of unsustainable trade type.
Second, there is imbalance in the structure of bilateral trade
goods between Laos and China. While Laos mainly exports its preliminary
agricultural products to China, China exports mainly machinery,
electronics, home appliances, and so on to Laos’ market. In the long time, it
will crush the domestic production of Laos. It is difficult for Laos to build a
competitive commodity production base with China.
3.5.2. Some evaluation on investment activities of China in Laos
* Positive:

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Firstly, China's investment has also helped increasing Laos's
domestic capital, especially in the context of a growing thirst for capital in
Laos, the increasing demand for investment capital in domestic for the open
economic development of Laos.
Secondly, China’s investment in Laos also contributes to enhance
and improve Laos's domestic technology.
Thirdly, China's investment also contributes to the training of
human resources in the production management of Laos.
Fourthly, China's investment also increases the competitiveness
of its domestic investment activities for development, enhances its
dynamism and competitiveness in the country, and facilitates the efficient
exploitation of its potential strength in domestic.
Fifthly, China’s investment in Laos also contributes to expanding
the international market of Laos.

* Limits:
Firstly, the problem of localization in hiring local labors by
China’s investment firms in Laos.
Secondly, matters related to land use of China’s firms
Thirdly, the matter of environmental protection from China's
investment projects.
3.5.3. Evaluation of China’s Aid to Laos
* Positive:
Firstly, China's aid has helped Laos supplement its domestic
capital resources for strong shortage, especially in recent years.
Secondly, China's aid mainly focuses on key areas and the urgent
demands of Laos, thus it responds quickly and promptly to demands of
Laos.
Thirdly, China’s aid to Laos also contributes to improvement of
Laos’ economic structure.
* Limits:
Firstly, China’s aid for infrastructure construction projects under
big scope usually faces to some matters relating to land confiscation and
site clearance.
Secondly, aid projects of China in the field of agriculture and
forestry usually meet un-satisfaction of Laos’s people.
Thirdly, though aid projects of China increases priorities,
effectiveness is still limited, especially in increasing price that makes
Laos’s people feel worried.

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Fourthly, obviousness of projects invested by China’s aid is not
high and China’s aid usually does not attach with binding conditions.

Fifthly, although China’s aid for Laos does not have binding
condition attached with, aid projects are usually rewarded to Chinese
contractor at the time of development in the face, then money flows from
China to Laos’s people but return back China’s enterprises by one closed
circle.
3.6. Characteristics of China-Laos economic relations
3.6.1. Characteristics of China Laos Trade relations
Firstly, bilateral trade scope is relatively small.
Secondly, bilateral trade structure has single characteristics.
Thirdly, bilateral trade relations is not stable
Fourthly, trade relations between China and Laos changes from
trade surplus to trade gap.
Fifthly, China uses local area as the key point in enhancing the
relations with small neighboring countries, Yunnan of China as local area
becomes the key factor on the relations with Laos, very few investors and
businessmen at national scale.
It can be seen, with its economic strength, China is gradually
determining its position in Laos, especially in the northern areas of Laos.
With large-scale projects which are being considered by the Laos’s
government for the Seventh Five-Year Socio-Economic Development Plan
(2011-2015) as the "Golden Triangle Special Economic Zone Development
Project" in Northern area of Laos with the value of 2.24 billion USD, the
project builds national railway system with the value of 4 billion USD,
investment of China in Laos will continue to increase strongly in the
coming years. Thus, Yunnan province is considered a leading area of China
in enhancing economic relations with Laos.
3.6.2. Investment characteristics of China in Laos
Firstly, China mainly invests in long time into the exploitation of
national resources, big projects are blood lines of the economy.
Secondly, economic investment projects of China are attached with labors

coming to execution, promotes the role of Chinese community and increase
Chinese immigrants with the new appearance of China towns (Chinese

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towns)
It can be said that in the current period, new Chinese immigrants to
Laos has been increasing, especially small traders and workers under the
labor contracts with China’s companies investing in Laos. In particular, the
Northern area of Laos has attracted not only major investments from China
with big construction projects but also the most concentrated area for new
Chinese immigrants. The exact number of Chinese immigrants is very
difficult at present as the number of migrants is far over the official
registration number with the Lao central and local authorities.
3.6.3. Aid characteristics of China for Laos
Firstly, China’s aid mainly is focused much on infrastructure.
Secondly, China’s aid usually does not have binding conditions and
follows with demands of Laos.
Thirdly, China’s aid is also based on urgent demands of Laos to
provide urgent aids.
Fourthly, the difference between aid and loans.
3.7. Sub-conclusion of chapter 3
Since the relations between China and Laos have been normalized
since 1989, the overall relations of the two countries has increased,
especially after the world financial crisis in the period of 2008 - 2009,
economic relations between two countries are strongly strengthened. For
Laos, China is an important economic partner, a huge market that is
important for the development of the Laos’s economy.
With its wealthy pocket, China is ready to pour capital into Laos,

especially in infrastructure investments for Laos. This makes Laos consider
economic relations with China more and more importantly. In return, China
is also aware of increasing economic relations with Laos that would help
Beijing strengthen its diplomatic relations with Vientiane and be an
important channel for China to increase its influence on the Southeast Asia.
In addition, Laos has political and social order stability; the capacity and
production level of the economic sector has been firmly solid, business has
step by step closely with the international market, the competitiveness of
domestic goods has gradually been strengthened; the economic structure
has been transformed; actively implement the Party's policies on planned
economic development and priorities for sectors and local areas.

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Geographical position, natural resources and the nature attracted
and offered conditions for the development of tourism and investment
sectors. This also attracted attentions and interest of China’s companies
which are seeking investment markets in oversea. In addition, policies for
economic relations with Laos are also meaningful in politics, society and
security for this country, especially under the background that China is
speeding up the diplomatic strategy with neighboring countries and building
communities at the common region.
Chapter 4:
IMPACT, TRENDS OF CHINA – LAOS ECONOMIC
RELATIONS AND SOME IMPLICATIONS FOR VIETNAM
4.1. Impacts from economic relationship between China and Laos
4.1.1. Impact for Laos
4.1.2. Impact for Vietnam
4.2. Trends of economic relationship between China and Laos

4.2.1. Some advantages
Firstly, the political and diplomatic relations between China and
Laos are getting closer and closer, which is an important framework for the
two sides to promote investment and aid relations.
Secondly, Laos has a policy of promoting economic relations with
China.
Thirdly, China is stepping up its "One Ring Road" strategy and the
Laos side is responding positively. This is an important basis for the two
countries to increase economic relations. Especially China's initiative to
launch the " Silk road on the sea route in the 21st Century "
Fourthly, China and the Mekong sub-region countries are
promoting the Mekong-China Trade Mechanism, which will serve as a
basis for increasing China-Laos economic cooperation in the future.
Finally, the developments in the negotiations of the Regional
Comprehensive Economic Partnership (RCEP).
4.2.2. Some disavantages
Firstly, China's investment often affects the environment, and
Chinese aid in Laos flows into the pocket of Chinese companies.

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Secondly, China's investment is often accompanied by migration,
which in turn increases the pressure on Laos in the long term.
Thirdly, China's investment and aid will have to be competitive
with investors and providers for other aid.
4.2.3. Some evaluations of trends in economic relationship between these
countries in some specified fields
* In the field of commercial economy:
Firstly, the overall relationship between China and Laos, especially

bilateral economic relationship, is being developed strongly.
Secondly, China is pushing its "outbound" strategy, especially in
the southwestern provinces of Yunnan or Guangxi, and Laos is an
important gateway to these provinces.
Thirdly, China is promoting its diplomatic strategy, in which
diplomatic relations with Laos are considered one of its priorities.
Fourthly, China has promoted a strategic link between the "Silk
Road Economic Ring Road" and the "Silk Road on Sea Route of the 21st
Century," in which mainland Southeast Asia has a role to play. weight.
Finally, China is actively promoting the "trans-Asia road" strategy,
which has contributed significantly to boosting economic ties across the
border between China and Laos in the near future.
* For the trends of Chinese invetsment and aid in Laos: From the
assessment of the advantages and disadvantages mentioned above, it is
possible to see the trend of investment and aid from China in Laos in the
coming time as follows:
Firstly, in the field of investment, China boosts investment activities
in Laos. In the other sides, China can take advantage of the exploitation of
resources in the relatively "primitive" and fertile investment market, in
parrallel with increasing employment for the Chinese population in the
context of increasing unemployment pressure, partly to "transfer" the
technology backward, low productivity and high environmental pollution to
Laos to solve the problem, the "technological landfill" of this country.
Secondly, for aid activities, China is stepping up its support for
Laos, moving towards becoming the most important aid donor to the
million-elephant land.
4.3. Some policies of implication and solutions for Vietnam during the

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evolution of China's economic relations with Laos
4.3.1. Overview of present Vietnam - Laos economic picture
4.3.2. Some suggestions for solutions to economic growth of Vietnam Laos against the pressure of economic factors of China
* Awareness in economic relationship between Vietnam and Laos:
Firstly, to re-evaluate the overall economic relationship between
Vietnam and Laos in order to see how this relationship is, especially the
two countries that have a "special" relationship, the level of economic
relationship must be corresponding. A comprehensive re-evaluation of the
attitudes of senior leaders is to see how they view economic relationship
between the two countries and their future position on the two countries'
economic relations.
Secondly, the development of economic and trade relations between
the two countries is in essence and effectiveness, in the same position with
political cooperation to create a strong bond with Laos, focusing on the
implementation of the content agreed between the two Governments,
reviewing and evaluating the results of implementation of Vietnam-Laos
cooperation projects to speed up the process of quality assurance. In
cooperation, do not compete in terms of quantity, investment field with
China but focus, focus, focus, match the strength of Vietnam, ensuring the
prestige, quality and harmony between economic and political interests
between the two countries and the aim at southern Laos, key socioeconomic, defense-security regions.
* Specific recommendations:
First, in the field of trade:
- For mechanism of management, policies, management
strengthening and human resources: The two sides should review the importexport documents (procedures) in line with the current level of integration of
the two countries, especially When the ASEAN Economic Community was
established in which the two countries were members. Replicing the one shop
one stop model of the two countries being piloted in Lao Bao-Danhsavanh
gateway. Continuing improving administrative procedures, implementing ecustoms, enhancing professional skills for customs officers of both sides.

- Promote preferential policies on capital for Vietnam-Laos importexport enterprises.

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- It is necessary to study the policy on imported and exported
products.
- Strengthen cooperation between the two countries. The two sides
should promote border-gate economic development, encourage businesses in
the two countries, promote investment in economic areas of the country,
especially infrastructure such as bonded warehouses, warehouses ... to revive
economic border provinces.
Secondly, investment solutions:
- Complete the legal system of abroad investment.
- Simplify the procedures for registration, registration and
investment licensing in Laos.
- To formulate preferential policies to assist enterprises in making
investment.
- Strengthen the organization of investment promotion between the
two countries.
4.6. Little conclusion of Chapter 4
It can be said that the Chinese-Lao economic relations are an
important part of China's economic growth strategy for the region, which is
considered the gateway to open the door of Laos from China to spill over
into investment, trade, tourism and even migration. At present, China and
Laos have also made important achievements in bilateral economic
cooperation, especially the building of cross-border infrastructure and
economic zones, contributing to promoting economic exchanges for not
only the two sides but also the other regions of the two countries. Although
the global financial crisis has affected most countries, unlike the trend,

cross-border economic relationship have developed rapidly in recent years.
However, due to the asymmetry in the two countries' economic relationship,
the investment, operation and exploitation of this cross-border economic
relationship are mainly in the hands and controls of China. In contrast, the
participation of the Lao people is relatively modest. China has almost share
of the market in relation to the northern provinces of Laos. The implication
is that China's influence in northern Laos is very strong, apart from
economic factors, including immigration.

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CONCLUSION
From above research, we could go deep into following conclusions:
Firstly, China is constantly promoting bilateral trade with Laos,
which makes Chinese goods more and more flooded into the Lao market
and compete with the goods of other countries such as Thailand and
Vietnam. Together, the imbalance in the trade relationship of the two
countries Vietnam and Laos is more and more increasing. Industrial goods
are increasing in the Lao market, while agricultural commodities and raw
minerals are still Lao's main commodities in relations with China.
Secondly, in the field of investment and development aid to China.
As a country with relatively low socioeconomic status in Southeast Asia, in
recent years Laos has promoted economic development, especially
attracting foreign investment. Meanwhile, China is a neighboring country
and a giant partner of Laos with a wealth of money ready to invest in most
of Laos' economic sectors. In recent years, China's investment in Laos has
grown rapidly and has become Laos's largest foreign investor.
Thirdly, the asymmetry in the economic relationship of the two
countries is clear and increasingly trending. China is a country with the

world's largest population (1.4 billion people), large area (about 960 million
km2), huge GDP (9,000 billion USD in 2013) , the second largest economy
in the world after the United States, so most of the countries having
economic relations with China are asymmetric, including Laos. Meanwhile,
as the asymmetry between China and Laos widens, Laos is increasingly
passive and increasingly dependent on the Chinese economy. Laos is a
major importer country in trade relations with China and this rate is
growing.
Fourthly, China has maily invested in the exploitation of resources,
the major projects of the economy. The investment projects of China have a
long time (from 20 to 30 years, some 50 years), concentrated in the strategic
geographical areas of Laos such as Vientiane, northern Laos, Central Laos
and Golden Triangle (this area has a rubber plantation project area of
10,000 ha in Luang Namtha province, bordering Myanmar).

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Fifthly, China's economic investment projects have included
bringing labor to work, promoting the role of the Chinese community, and
increasing the new Chinese immigrant flows accompanied by the arrival of
the Chinese and then There are appearances of serial "Chinatown". As a
corollary, Southeast Asian nations have begun to see Chinese communities
in their countries as "assets" in strengthening relations with China.
Finally, for the implications of Vietnam - Laos economic relation
on the increase of economic relations between China and Laos. It can be
said that Vietnam and Laos in previous periods have built a very close
relationship with each other called the "special Vietnam-Laos relations."
However, since the two countries entered the renewal phase, developing a
market economy and opening up their external borders, multilateral

diplomacy was implemented. The "special" relationship between the two
countries is strongly influenced. The most circumstances is in the context of
the increasing China's influence on the region, including Laos, which has
made the relationship of the two countries facing great challenges. From a
country with little influence on Laos, in recent years, China has rapidly
surpassed Vietnam and Thailand as influential countries in Laos to become
the most influential nation in the economic field. The presence of the
growing Chinese factor in Laos has been putting strong pressure on
Vietnam, which has made Vietnam in recent time actively promote relations
with Laos. However, with China's economic strength and the level of
economic control in place, Laos has been pushing Vietnam into a more
passive position. This does not mean that China is able to fully control the
Lao factors because after all, Laos's interests in its relations with Vietnam
are still huge./.

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THE ARTICLES OF AUTHOR RELATED TO
DISSERTATION
Le Thi Huong Tra (2015), “Current Situation of
Investment and Trade of China in Laos present day”, Southeast
Asian Studies, No.11 (Vol.188)
Le Thi Huong Tra (2017), “China-Laos Cross-border
Economic Cooperation since 2008”, Chinese Studies Review,
No.6 (Vol.190)
Duong Van Huy – Le Thi Huong Tra (2017), “Progresses
of Vietnam – Laos Economic Relations in Recent Years”,
Review of External Information, Vol.160