China-Vietnam relations

It appears that Beijing is losing some of its factory orders with MNCs and investors putting their bets on Vietnam. But maybe it is a win-win situation: as China moves to transition its economy to advanced manufacturing, countries like Vietnam with a young and relatively cheap labour force could fill the gap.

Sokvy Rim explains why Vietnam still chooses to adopt a hedging strategy between the US and China, despite increasing fears of China’s aggressive moves in the South China Sea.

Discussions about the bilateral relationship between Vietnam and the US typically centre on the geopolitical aspects. A more meaningful way of developing the relationship is actually in the field of human security.

Vietnam-US relations have continued to flourish even as China continues to express its displeasure and concerns. How has Vietnam maintained the balance between its ideological cohesiveness with China and pragmatic ties with the US? Is Hanoi taking a big risk by developing a deeper relationship with Washington while antagonising its giant neighbour?

Vietnam’s trade deficit with China has grown rapidly since 2001, and its heavy dependence on Chinese intermediate and capital goods creates vulnerabilities in its entire production chain. Besides, China has a history of using trade as a weapon to punish countries with which it has disputes. To reduce its trade dependence on Beijing, Vietnam has signed a number of new-generation free trade agreements (FTAs) in recent years, but these efforts have not produced desired outcomes. Vietnam will need to increase the utilisation rate of these agreements and push forward economic and institutional reforms to strengthen its overall economic resilience.

Historical photo collector Hsu Chung-mao notes that the Sino-French War showed the weaknesses of Western colonial powers, particularly France. This ultimately led to the end of colonialism following World War II.

The public reactions to the arrivals of Covid-19 vaccines to Vietnam — one from China, the other from the US — underscore a geopolitical dilemma for the country.

Relations between Vietnam and the United States have advanced markedly, particularly in trade and diplomatic cooperation. But bilateral military relations will continue to be stymied by Vietnam’s approach to China.

Vietnam’s domestic and foreign policy structures held up well in 2020 in the face of significant challenges involving Covid-19, chairing ASEAN, and relations with China and the US. Vietnam continued to maintain a delicate balance between China and the US, while at the same time retaining a strategic option to pursue deeper defence and military relations with the US. Its ability to maintain and enhance agency, in particular in its relations with Beijing, offers lessons for other Southeast Asian countries facing the same dilemma.