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Date: 1 March 2022 Author: Wojciech Adamczyk

The US-China competition over Vietnam

The ongoing competition between the US and China over the sphere of influence in Vietnam has been intensifying. Vietnam can be considered as one of the most important partners for the United States in the Indo-Pacific region. At the same time, China seems to be an unavoidable partner for Vietnam. It all can be easily observed through diplomatic efforts that both countries are putting to place themselves at the pole position.

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In the second half of 2021, Chinese Foreign Minister Wang Yi paid a visit to Hanoi, while the US Vice President Kamala Harris was on a journey over Southeast Asian countries, including Vietnam[1]. Although, two officials had totally different goals, where Wang Yi was trying to maintain Vietnam’s neutrality and had the aim to settle territorial disputes. On the other hand, the US has been trying to strengthen security ties with Vietnam, and since the former US president Barack Obama lifted the decades-old ban on arms sales in 2016, efforts only increased[2].

Looking closer at the bilateral relationship between Vietnam and China, we may clearly see that the partnership has been marked by territorial disputes and an unfavourable trade deficit for Vietnam. It’s also worth adding a shared ideological background that officially should help both countries to develop a fruitful relationship. In general, Vietnamese governments want to avoid the past episodes of being under hostile Chinese sphere of influence, and they try to maintain a peaceful relationship. What’s more, Vietnam can experience that economic dependence on China may quickly deepen[3]. It has had a continual trade deficit with China since 2001 which has increased more than 150-fold during the last two decades from $211 million to $32 billion. What’s also interesting are the imported products that mainly consist of capital goods and intermediate goods. It creates a serious problem that constrains Vietnam’s economic potential from strengthening its manufacturing capabilities. Going further, whenever supplies of these goods would be disrupted, the Vietnamese economy would be instantly badly affected[4]. That’s why geographical proximity and ideological affinity that are commonly perceived as positive aspects of the bilateral relationship can be perceived as negatively impacting the economic capabilities of Vietnam. Notoriously repeated by Vietnam’s policy of “four-nos” – “no military alliances, no alignment with one country against another, no hosting of foreign military bases, and no using of force or threatening to use force”, might be perceived as too pusillanimous, while having the US as the counterbalance with its efforts to win influence over China in Vietnam[5].

When it comes to the relationship between the US and Vietnam, we are seeing a very eager approach of the US to tighten ties with Vietnam in the Indo-Pacific region. It’s the US, that became the leading source of foreign direct investment in Vietnam, as well as Vietnam’s largest export market. The bilateral trade has sharply increased accounting for $92.2 billion in 2020 compared to $1.5 billion in 2001[6]. What’s important, is the fact that the trade surplus with the US, has been nearly compensating trade deficit with China. This situation may only improve since both parties have signed Trans-pacific Partnership (TPP) agreement that will help Vietnam to diversify its external economic relations[7]. Despite a normal tendency for both countries to maintain regional order with ASEAN at the forefront, we may observe the recent changes in the US approach towards Vietnam. The term “human security” is the concept that focuses on the survival, livelihood, and wellbeing of the people. During the recent visit to Vietnam, Harris did not bring up the South China Sea issue, but instead, she offered a strategic partnership with aims to tackle issues related to climate change, supply chain disruptions and future pandemics among other few. This marks a new beginning of the bilateral relationship that so far was mainly dominated by the domain of traditional security, and the US efforts to create a military alignment. It might be perceived, as the historical Vietnam War legacy will “net greater mileage in pushing forward US-Vietnam ties[8].”

To summarize Vietnam’s relations with both countries, it’s worth noticing that Vietnam consistently tries to maintain its status of neutrality. Of course, China is an unavoidable partner for Vietnam, but on the other hand, the US is its largest export market. The threat of looming China’s dominance in Vietnam has been forcing to upgrade the US-Vietnam security relationship. Although it seems to be very difficult for Vietnam to ‘escape’ from the Chinese “grip”, and realistically observing both bilateral relationships, China has been enlarging its sphere of influence over its partner. One of the solutions for the US to improve relations with Vietnam is to rather put on the quality of cooperation, not the quantity[9].

[1] Grossman, D., 2021. Regional Responses to U.S.-China Competition in the Indo-Pacific: Vietnam. [online] Rand.org. Available at: <https://www.rand.org/pubs/research_reports/RR4412z6.html> [Accessed 26 February 2022].

[2] Fischler, N., 2021. Vietnam is a Wildcard in US-China Relations – ICAS. [online] ICAS. Available at: <https://chinaus-icas.org/research/vietnam-is-a-wildcard-in-us-china-relations/> [Accessed 26 February 2022].

[3] Thuy, T., 2020. Vietnam’s Relations with China and the US and the Role of ASEAN. [online] Nids.mod.go.jp. Available at: <http://www.nids.mod.go.jp/english/publication/joint_research/series14/pdf/chapter08.pdf> [Accessed 26 February 2022].

[4] Tran, B., 2022. U.S. Leadership and Vietnamese Resilience Both Require the CPTPP. [online] Csis.org. Available at: <https://www.csis.org/analysis/us-leadership-and-vietnamese-resilience-both-require-cptpp> [Accessed 26 February 2022].

[5] Sang, H. and Do AN, P., 2021. Vietnam is balancing China-US rivalry with deft statecraft but for how long?. [online] ThinkChina – Big reads, Opinion & Columns on China. Available at: <https://www.thinkchina.sg/vietnam-balancing-china-us-rivalry-deft-statecraft-how-long> [Accessed 26 February 2022].

[6] United States Trade Representative. 2022. Vietnam. [online] Available at: <https://ustr.gov/countries-regions/southeast-asia-pacific/vietnam> [Accessed 26 February 2022].

[7] Thuy, T., 2020. Vietnam’s Relations with China and the US and the Role of ASEAN. [online] Nids.mod.go.jp. Available at: <http://www.nids.mod.go.jp/english/publication/joint_research/series14/pdf/chapter08.pdf> [Accessed 26 February 2022].

[8] Dung, P., 2021. Deepening US-Vietnam Ties: Less Geopolitics, More Human Security | FULCRUM. [online] FULCRUM. Available at: <https://fulcrum.sg/deepening-us-vietnam-ties-less-geopolitics-more-human-security/> [Accessed 26 February 2022].

[9] Grossman, D., 2021. Regional Responses to U.S.-China Competition in the Indo-Pacific: Vietnam. [online] Rand.org. Available at: <https://www.rand.org/pubs/research_reports/RR4412z6.html> [Accessed 26 February 2022].

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