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Le Hong Hiep
Le Hong Hiep
SCMP Contributor
Le Hong Hiep is a Senior Fellow and Coordinator of the Vietnam Studies Programme at the ISEAS–Yusof Ishak Institute.

Controversies over Beijing’s nine-dash line claim in the South China Sea have highlighted how geopolitical tensions can create challenges for international businesses.

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The army’s increased leverage in Vietnam’s Communist Party reflects security concerns over South China Sea tensions, but it has also deepened its influence through significant business interests, such as in Viettel.

An alternative to the belt and road will make regional countries less reliant on Chinese funding, while encouraging Beijing to make its lending more transparent, writes Le Hong Hiep.

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Hanoi’s decision to stop foreign investors from funding its North-South Expressway means financing the project is now a concern. But it has shown that security issues do trump development needs.

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China and Vietnam should be natural partners – not least because of a shared ideology – but by ignoring Hanoi’s legitimate security concerns and pressing ahead with its own claims instead, Beijing is creating a new US ally out of a former enemy, says Le Hong Hiep.

Asean member states and China are a step closer to forming a Code of Conduct for the South China Sea after years of operating a toothless diplomatic pact that has failed to reduce tensions.