“Vietnam Strengthens Ties with China amidst Regional Uncertainty” a Commentary by Le Hong Hiep

2017/4, 19 January 2017

Last week, General Secretary of Communist Party of Vietnam (CPV) Nguyen Phu Trong paid an official visit to China, the first since his re-election at the CPV’s 12th Congress in January 2016. President Xi Jinping accorded Mr Trong the highest level of protocol with a 21-gun salute and a special tea party arranged in his honour. In the final leg of the visit, Mr Trong went to Hangzhou, a major city that represents strong historical, political, and economic ties between the two countries.

During the visit, recent tensions in the South China Sea were generally played down. Instead, the two leaders emphasized the importance of their historical, cultural, ideological and economic ties. Fifteen bilateral agreements on cooperation in various fields were signed, including an agreement on senior cadre training between the two communist parties, a declaration on the common vision for future bilateral defence cooperation, an agreement between development banks of the two countries on China’s provision of loans for Vietnam, and official letters in which China pledges to provide technical assistance for the planning of a standard-gauged rail link connecting Lao Cai, Ha Noi, and Hai Phong.

During the visit, Mr Trong also had a meeting with President of the Asian Infrastructure Investment Bank (AIIB) Jin Liqun. At the meeting, Jin expressed interest in helping Vietnam develop its infrastructure to strengthen connectivity among ASEAN states. Vietnam is interested in funding from AIIB and Chinese financial institutions as Hanoi is experiencing burgeoning budget deficit while the government has indentified infrastructure development as one of the key pillars of the country’s economic growth.

On the part of China, Mr Trong’s visit serves as a timely opportunity to mend ties with Vietnam, which deteriorated since the Haiyang Shiyou 981 oil rig crisis in 2014. China’s offer of funding for Vietnam’s infrastructure projects also fits in well with its “One Belt – One Road” strategy, and can be seen as part of China’s “charm offensive” to win diplomatic and strategic influence among its neighbours at a time when growing assertiveness in maritime and territorial disputes has significantly undermined China’s international image.

As far as Hanoi is concerned, apart from the long-standing wish to maintain stability in bilateral relations due to China’s status as Vietnam’s most important foreign partner, recent regional developments seem to further encourage Vietnam to do so. For example, over the past few months, the election of Donald Trump has cast uncertainty over the prospect of US strategic engagement in Asia as well as the future trajectory of Vietnam – US relations. Meanwhile, regional countries, especially the Philippines and Malaysia, have taken steps to cement their relations with Beijing. Therefore, if Vietnam could not improve ties with Beijing in time, it may be marginalized and left out in the cold, especially if Mr Trump follows through on his isolationist foreign policy agenda. Although recent signs seem to suggest continuity rather than change in US foreign policy towards the region, improved ties with Beijing still serve as a better hedge for Vietnam against the worst case scenario.

Nevertheless, no matter how much Vietnam can improve its ties with China, the South China Sea disputes will remain a constant irritant to bilateral relations. As such, Vietnam needs to keep strengthening its ties with other major partners to balance against a rising China. The visit of Japanese Prime Minister Shinzo Abe to Vietnam right after Mr Trong’s trip to China, during which Mr Abe pledged further aid to Vietnam, including the provision of more patrol boats, is a clear indication of such an effort.

Le Hong Hiep is Fellow at ISEAS – Yusof Ishak Institute.
The facts and views expressed are solely that of the author/authors and do not necessarily reflect that of ISEAS – Yusof Ishak Institute.  No part of this publication may be reproduced in any form without permission.