SUBSCRIBER+ EXCLUSIVE REPORTING — It’s a manufacturing juggernaut, a growing actor in global supply chains, and a critical player in the geopolitics of Southeast Asia. It’s also the only country the leaders of the world’s top three military powers—the U.S., China, and Russia—have visited over the past year.
Increasingly, Vietnam matters, more than many nations of the so-called “Global South.” For Washington, this signals geopolitical opportunity, and competition with Russia and China as well.
“Vietnam is an emerging economic powerhouse, especially for high-tech manufacturing, and a major trade and investment partner of both the U.S. and China,” Gregory Poling, Senior Fellow and Director of the Southeast Asia Program and Asia Maritime Transparency Initiative at Center for Strategic and International Studies (CSIS), told The Cipher Brief. “In addition, it plays an important strategic and normative role as a non-aligned developing country trying to maintain its agency by balancing between all the bigger powers.”
That balancing act has allowed Vietnam to leverage its position for maximum benefit, attracting significant attention and resources.
Russia now provides Vietnam with significant energy cooperation, military support, and educational training, while China has built trade and economic integration with Vietnam, as well as infrastructure development and cultural and political ties. The U.S., for its part, offers significant trade and investment, educational exchanges, and security cooperation. All three nations have made courting the country of 99 million a foreign policy priority.
“Vietnam has long been a crossroads for great powers, and its government is…proficient at managing multiple competing influences at the same time,” Zack Cooper, an Asia Security Expert and Senior Fellow at the American Enterprise Institute (AEI), told The Cipher Brief. Cooper noted that Vietnam’s new president, Tô Lâm, who took office on May 22, must continue to manage the three-power courting of his country.
“Vietnam’s military remains deeply dependent on Russian systems, while Vietnam’s economy is deeply intertwined with China’s, and Vietnam’s strategic position incentivizes cooperation with Washington on security and technology,” Cooper said. “Getting this balance right will be a major challenge for the new leadership in Hanoi.”
Putin’s under-the-radar visit
When it comes to Russian President Vladimir Putin’s travels, the recent trip that got headline attention was his June visit to North Korea, for obvious reasons. But Putin also visited Vietnam and took his new defense minister, Andrei R. Belousov, with him, illuminating the importance Russia attaches to the Vietnam relationship.
Putin and his Vietnamese counterpart, Lâm, signed at least twelve deals involving economics and security. Putin also offered to supply the East Asian country with fossil fuels, including natural gas, and assist in developing nuclear power plants. In addition, the leaders agreed to increase their collaboration in science and technology, education, oil and gas exploration, and clean energy. These projects come at a critical time for Moscow, given that Western sanctions have caused a significant drop in Russia’s trade with Europe. The Vietnam deals will bolster revenue for the Kremlin while also demonstrating to the world that it has strategic influence and support in a critical part of the world.
While none of the publicly mentioned deals concerned defense, Lâm said the visit had produced other agreements, and there were several hints that defense and security played a major role in the meetings. Putin said that Russia and Vietnam share an interest in “developing a reliable security architecture,” a typical Putin phrase for any “architecture” that sidelines the U.S. For his part, Lâm proclaimed that the two countries seek to “further cooperate in defense and security to cope with non-traditional security challenges.”
Russia and Vietnam share a relationship that dates to the Cold War era, when the Soviet Union suppported North Vietnam in its war against the U.S. Although Russian weapons imports have declined in recent years as Hanoi endeavors to diversify its suppliers, Russia still accounts for roughly 80 percent of Vietnam’s weapons imports. Moreover, Russian oil exploration technologies have helped Vietnam sustain its sovereignty proclamations in the hotly disputed South China Sea. According to Poling, the partnership benefits both sides.
“It’s Russian parts that keep Vietnamese planes flying and ships sailing, so Hanoi can’t afford to lose its military relationship with Moscow in the short term, even as it has been steadily diversifying defense partners,” Poling said. “Similarly, without Russian state-owned companies, there would be no one left to operate the most important Vietnamese oil and gas fields in disputed waters of the South China Sea, since most other investors have bailed in the face of Chinese pressure over the last decade.”
For the Russians, there’s another benefit to the Vietnam relationship: Russia holds a prominent share in the country’s oil and gas industry. The two nations’ joint venture, Vietsovpetro, yields more than $1.6 billion annually, one more rich source of revenue for the Kremlin.
Putin’s Vietnam visit triggered a reprimand from the U.S. Embassy in Hanoi, which stated that “no country should give Putin a platform to promote his war of aggression and otherwise allow him to normalize his atrocities.”
That was unlikely to alter Vietnam's behavior. And Russia isn’t the only U.S. adversary vying for a stronger bond with Vietnam.
For Xi, boosting trade and lowering tensions
China is also shoring up its relationship with Vietnam, and doing so at the highest levels.
Chinese President Xi Jinping made his sojourn to Hanoi last December. While China and Vietnam have long-standing disputes over sovereignty and resources in the South China Sea, Xi and his Vietnamese counterparts signed multiple agreements designed to deepen cooperation in railways and telecommunications.
Behind the scenes, the competition for Vietnam’s affections was apparent. During Xi’s visit, Beijing was reported to have sought guarantees that it was Vietnam’s most important partner, a not-so-subtle reference to the Russian courtship, and the fact that Hanoi had just elevated its relationship with the U.S. to the level of “comprehensive strategic partnership.”
Neil Thomas, a Fellow on Chinese Politics at the Asia Society Policy Institute’s Center for China Analysis, said China wants “good relations with Vietnam to deepen trade and investment opportunities, manage their shared land border, support the international development of authoritarian socialism, and dissuade Hanoi from asserting its rival territorial claims in the South China Sea.”
China’s disputes with its neighbors over the South China Sea have recently caused tensions to soar with the Philippines; a Chinese vessel rammed a Philippine military boat last month, in an incident that brought condemnation from Manila, Washington and other capitals. Vietnam claims its own share of territory in the South China Sea (Vietnam refers to it as the East Sea), and China is hoping to use its influence over Hanoi to keep that dispute from escalating into confrontation.
The Washington factor
The U.S. and Vietnam formally mended relations in 1995, two decades after the long and ignominious U.S. war in the country. Now Washington is also vying for Hanoi’s cooperation, pushing a partnership that benefits both countries.
President Biden’s trip to Vietnam last September was his first as president, and it cemented that “comprehensive partnership” and resulted in several bilateral agreements. The two nations announced joint efforts to bolster security, deepen trade, investment, and economic cooperation, promote and protect human rights (Vietnam is a longstanding laggard in that department), and address legacies of the U.S. war. However, much of the president’s official visit was focused on expanding Vietnam’s semiconductor production.
“The United States recognizes Vietnam’s potential to play a critical role in building resilient semiconductor supply chains, particularly to expand capacity in reliable partners where it cannot be re-shored to the United States,” the White House said in a statement.
That’s a boost for Vietnam, but a clear benefit for the U.S. as well, as it seeks to counter a surge in China’s production of semiconductors.
Just before Biden touched down in Vietnam, the White House also hailed a “landmark” $7.8 billion deal between Vietnam Airlines and Boeing, in which the largely state-owned carrier would purchase 50 Boeing 737 Max jets. That U.S.-Vietnam agreement is expected to create more jobs in both countries and solidify their economic partnership.
Vietnam also needs U.S. backing to broaden its own defenses and grow its economy. Experts say that by making advanced weaponry more affordable and providing cutting-edge technology and training, U.S. support can bolster Vietnam's military capabilities and strengthen the country’s international standing, potentially attracting investment and fueling economic expansion.
The problem for the U.S. is that China offers the powerful allure of fueling Vietnam's economic growth with cheap goods and investment as the country’s largest trading partner. China exports machinery, electronics, textiles, and raw materials to Vietnam; Vietnam, in turn, sells electronics, agricultural products, textiles, and seafood to China. This mutual exchange underscores a significant economic interdependence – China is Vietnam's largest trading partner, and last year the two countries’ bilateral trade was estimated at $172 billion.
According to Thomas, there are concerns in Washington that Vietnam’s leadership is already moving closer to China—and that the visit from Putin, a strong ally of Xi’s, “will be viewed especially favorably in Beijing.”
“Vietnam never intended to pursue closer ties with Washington to the exclusion of its relationships with other major powers such as China and Russia,” Thomas said. “Some policymakers in Washington may have overestimated the degree to which a one-party communist dictatorship like Vietnam would sign up for a struggle of democracy against autocracy.”
He also noted that Vietnam “shows the limits of U.S. efforts to wage a pitched battle of American democracy versus Chinese authoritarianism,” indicating that Hanoi has no intention of turning away from Beijing in the bid to be closer to Washington.
“Hanoi will work closely with Washington on initiatives that advance its own trade and territorial interests concerning Beijing but is unlikely to abandon ties with fellow authoritarian states like China that provide economic, ideological, and political benefits to Vietnam,” he explained.
Cooper, from AEI, concurred. He told The Cipher Brief that Washington can do little to decrease Russian or Chinese influence in Vietnam, suggesting its best course of action is to focus on bolstering its own ties.
“What is most critical is finding ways for the United States and Vietnam to work together,” Cooper said. “I suspect that key areas will include semiconductor and other supply chains and increased military cooperation.”
Update: headline
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