Never has there been greater uncertainty in the priorities and policies in most Western nations, even as strife, war, threats and supply disruptions have become commonplace. Asian nations as Vietnam understand that the hard-won freedom and autonomy must be leveraged to provide for its people, while ensuring economic security and stability.
It is with this sense of purpose and commitment that the Politburo member and President of the Socialist Republic of Viet Nam To Lam, elected in May 2024, also unanimously chosen as General Secretary of the 13th Central Committee of the Communist Party of Vietnam (CPV) on August 3, 2024, chose China as the first destination of his foreign visit from August 18-20, 2024. The visit to India of Vietnam’s Prime Minister Pham Minh Chinh to India in July 2024, also deserves mention here. The visit, during which several MOUs were signed in trade, energy, education and technology, signified the importance India has acquired in Vietnam’s vision. The three=day visit was also meant to boost trade ties, with a special fillip for boosting the tourism sector. Hence, economic prosperity has become the key anchor and mission for Vietnam’s leaders.
When General To Lam was elected as the President of Vietnam in May, he expressed his desire to effectively deploy the foreign policy of multilateralism, diversifying foreign relations, imbuing the diplomatic identity of “Vietnamese bamboo”, proactively and positively. He also articulated his commitment towards combining the Party’s foreign affairs with State diplomacy and people’s diplomacy, in addition to promoting and deepening the relationship between his country and other countries, especially neighboring countries and traditional friends. His visit to China is a marker of this policy.
Economics as the Cornerstone of Cooperation
The visit of Xi Jinping to Hanoi in December 2023 resulted in establishing the “China-Vietnam Community with a Shared Future carrying a Strategic Significance”. Ever since Vietnam signed the CSP with USA, China had further pushed for elevation in bilateral ties, ensuring high-level visits. The Communist Party of China (CPC) and the CPV have time and again, reaffirmed the version of Marxism-Leninism ideological orientations and systems suitable to the circumstances and development path of their respective countries. Despite the challenges of overlapping maritime claims and tensions in the surrounding seas, the two countries prefer to reiterate their shared interests, including maintaining regime security and stability.
Prior to arriving in Beijing, General Secretary To Lam made a stopover in Guangzhou, in the southern province of Guandong. This not only marked the leader’s articulated commitment in following the “red footprints” of the late Vietnamese leader Ho Chi Minh, with visits to the historical sites where revolutionary activities were conducted, but also to signal the significance of the economic robustness of bilateral ties.
China’s Guandong province alone accounts for a fifth of total bilateral trade, which is expected to touch USD 200 in 2024, enjoying an industrious collaboration with Vietnam in various fields, including trade and investment. Here again, the underlying anxiety stems from the upcoming elections in USA, with Trump expected to re-occupy the White House. Vietnam has not forgotten that the U.S. trade imbalance remained a thorn in Trump’s side, and had called Vietnam “the single worst trade abuser of everybody” with warnings of tariffs being imposed. That tariffs will be imposed on imports into the US, is also echoed by the Democrats. Given that the U.S. bilateral trade deficit in goods with Vietnam in 2023 at $104 billion was the United States’ third largest, with Vietnam being a major source for consumer electronics, furniture, semiconductor and parts, apparel, and footwear imports, it would be surprising if status quo was maintained.
Why China needs Vietnam to boost its declining fortunes is an easy answer. The US-China rivalry in the Indo-Pacific region, the conflict in Taiwan, the Russia-Ukraine War, inflation, economic slowdown, overproduction problems, a downturn in the real estate market, and zero Covid adventurism have all contributed to China’s inability to rise to prominence in the world economy. Hence, for China’s pandemic-battered economy which is also battling a demographic crisis, Vietnam’s economic progress, becomes a positive sum contribution for China. Vietnam’s trade balance is heavily tilted towards China, the latter being a vital source of imports for Vietnam’s manufacturing sector. According to a Reuters report, China has remained the largest source of imports for Vietnam, and over the past 5 years (2017-22), the exports of China to Vietnam have increased at an annualized rate of 14.6%, from $69.7 billion in 2017 to $138 billion in 2022. In contrast, over the same period, the exports of Vietnam to China have increased at an annualized rate of 5.86%, from $35.2 billion in 2017 to $58.7 billion in 2022. A similar trend has continued in 2023 and thereafter.
As alluded to earlier, the negative repercussions of debt traps of Belt and Road projects, which are reverberating in several smaller Asian states, must not adversely impact BRI projects in its tracks- especially the proposed highways and railway lines in Vietnam. One of the planned high-speed lines would run from Vietnam’s port cities of Hai Phong and Quang Ninh through Hanoi to Lao Cai province, which borders China’s Yunnan province; the other would run from Hanoi to Lang Son province, which borders China’s Guangxi region, passing through an area known for global manufacturing facilities. China can ill-afford to falter in these investments.
The visit of the Vietnamese leader seems to have resulted in another huge gain for China, viz. a China-funded project in Cambodia, viz. the USD 1.7 billion Funan Techo Canal, which was being opposed by Vietnam, is now finding support. The Canal project, which is raising security concerns for mainland Southeast Asia, is expected to yield significant gains for China in terms of timber, minerals and agricultural commodities. The allaying of Vietnamese concerns, and a revision in Vietnam’s position has been achieved. The Vietnamese State, instead of opposing the canal project, is now willing to engage with its counterparts in Cambodia in mitigating its potential negative impacts.
Vietnam’s Multilateralism: Prioritising Camaraderie with China
The raison d’etre to fortify Vietnam’s relations with China must also be located within Vietnam’s multilateralism and balanced diplomacy. There are several dimensions that can be discussed; not to exclude the disillusionment with the USA. First, Washington’s refusal to grant Hanoi a “market economy” status provided Beijing with the pertinent opportunity to shore up ties through Vietnam’s Communist Party chief’s visit. The decision on August 2, 2024, by the US Commerce Department to continue to classify Vietnam as a “non-market economy” (NME) sparked great disappointment from the Vietnamese especially after a period of tightening ties between Hanoi and Washington. This is despite the fact that the Comprehensive Strategic Partnership (CSP) was signed during the visit of US President Joe Biden to Vietnam in September 2023. Second, despite the adverse reaction from USA, Vietnam played host to the Russian President, Vladimir Putin, in June 2024, renewing ties as trusted partners. With Moscow being the key supplier of modern weaponry, it was evident that the Russian President received the red-carpet treatment.
Third, while Vietnam-Philippines conducted joint maritime exercises in Manila Bay, the scale of the exercise was relatively small. China preferred to view this as an inconsequential instance of bilateral security cooperation among two ASEAN nations. With this successful visit of the Vietnamese leader, China can be credited to have thwarted any attempts to enhance the maritime cooperation between Vietnam and the Philippines resulting in exacerbating tensions in the South China Sea. The maritime exercises are not without the support of the United States, the foremost ally of the Philippines.
Hence, while the visit of the Vietnamese leader reaffirmed the strength of the bilateral relationship, with the expectation that the present leader would follow in the footsteps of his predecessor, (the longest serving Party Chief), the late Nguyen Phu Trong, Vietnam has always kept its options open. China knows that Vietnam will continue to adhere to its Four No’s Foreign Policy, even as it balances relations with other middle and large powers in its quest for freedom of navigation and territorial integrity.