Vietnam’s Policy Toward Chinese Investments in Metro Systems

Hedging and Selective Engagement in Infrastructure Development

Abstract

Vietnam’s policy toward Chinese investment in its metro systems reflects a broader hedging strategy between major powers, characterised by a cautious and selective approach to economic engagement with China. Unlike other recipient countries that rely heavily on Chinese financing and firms for infrastructure development, Vietnam incorporates Chinese investment alongside partnerships with other actors, particularly Japan and France. This diversification of capital sources mitigates dependency risks while sustaining infrastructure development. At the same time, Vietnam’s metro systems are structured as state-subsidised public services rather than profit-oriented ventures. This institutional configuration limits their attractiveness to private investors operating under market conditions, including Chinese firms that typically seek commercially viable or asset-backed projects. Furthermore, compared to sectors such as mining or agriculture, metro systems offer limited integration into transnational production chains and thus hold lower strategic and extractive value. Methodologically, this study employs a qualitative case study approach, drawing on policy documents, investment reports, and secondary literature to analyse Vietnam’s infrastructure strategy within a political economy framework. This article argues that Vietnam’s metro policy's political-economic configuration both reflects and reinforces its broader hedging strategy. By selectively engaging Chinese capital in a controlled, relatively low-risk sector, Vietnam can balance the benefits of external investment with the need to minimise long-term dependency. The case of metro development, therefore, demonstrates how infrastructure policy can function as a strategic instrument, enabling the state to navigate economic cooperation while maintaining autonomy within an asymmetrical regional order.