EXECUTIVE SUMMARY
- Since 2010, cross-holdings in commercial banks have been considered by Vietnamese policy makers as a critical issue; this practice encourages non-compliance activities by financial institutions, such as the bypassing of credit risk regulations.
- By 2019, thanks to banking reforms led by the State Bank of Vietnam, this issue had been effectively managed.
- However, a more sophisticated form of cross-holdings has emerged in recent years, with more and more real estate developers becoming key decision-makers in local banks.
- Real estate developers’ ownership in commercial banks exposes Vietnam to the same problems that China is facing, with poorly capitalised real estate companies borrowing heavily from banks via their complex network of affiliates, thereby exposing these banks as well as the whole banking system to great risks.
- In order to deal with these risks, regulators need better tools to trace the ultimate ownership of commercial banks and mitigate ownership concentration. Requiring board diversity and enhancing the role of independent directors are some of the best practices that Vietnam can adopt.
* Tuan Ho is Senior Lecturer in Finance and Accounting at the University of Bristol and Visiting Fellow at the ISEAS – Yusof Ishak Institute. Tuan Huu Nguyen is Head of Risk Management at Saigon Securities Corporation. Trang Thi Ngoc Nguyen is Associate Professor of Finance, and Tho Ngoc Tran is Professor of Finance at the University of Economics – Ho Chi Minh City.
ISEAS Perspective 2022/14, 17 February 2022
INTRODUCTION
China’s economic stability has recently been threatened by the debt problem of major real estate developers, with Evergrande being the most notable case.[1] This has led to concerns that similar problems may happen to other countries in the region. In Vietnam, debates about this risk among policy makers and industry experts have intensified, as several real estate developers have recently emerged as major shareholders or key decision-makers in local banks.
This paper analyses the risks that this phenomenon poses to Vietnam’s banking system and discusses how Vietnam can handle this issue. We first review Vietnam’s banking reforms since 2011, focusing on the cross-holdings issue. We then link this to the risks posed by local real estate developers’ investment in banks, and discuss possible consequences. Finally, we recommend some policies and best practices that Vietnam can adopt to mitigate the risks.
WHY DO REAL ESTATE DEVELOPERS WANT TO CONTROL BANKS?
Reducing cross-holdings in commercial banks has been an important goal for Vietnamese policy makers since 2010. The fast growth of commercial banks in the 2000s was associated with the emergence of complicated ownership structures within these banks. Some banks held shares in other banks, while some were owned by non-financial companies, both private and state-owned, which were also these banks’ major clients. Such ownership structures were established through either direct or indirect links with these companies’ affiliates.[2]
In 2010, the State Bank of Vietnam (SBV), the country’s central bank, decided that cross-ownership among banks was a worrying trend as this practice encouraged non-compliance activities by financial institutions and major shareholders of commercial banks, including the bypassing of credit risk regulations. At the end of 2011, four state-owned commercial banks, namely Vietcombank, BIDV, VietinBank and Agribank, were holding shares in eight private-owned joint-stock commercial banks. For example, Vietcombank held an 11 per cent stake in Military Bank, an 8.2 per cent stake in Eximbank, a 4.7 per cent stake in Oriental Bank, and a 5.3 per cent stake in Saigon Bank. Private-owned commercial banks also held each other’s shares. For example, Eximbank owned 10.6 per cent of Sacombank and 8.5 per cent of Viet A Bank.[3]
After some deliberation, in 2014, the SBV issued Circular 36/2014/TT-NHNN to address this cross-holding problem.[4] The circular clarifies the definition of persons related to key decision-makers of commercial banks. It also requires additional disclosures on the ownership of related persons in commercial banks and the banks’ provision of credit to these persons. At the same time, the circular provides that a commercial bank can only hold less than 5 per cent of another financial institution’s equity. Thanks to these efforts, by June 2019, the number of pairs of financial institutions with cross-holding relationships had been reduced from 56 to only one.[5] Thereafter, SBV Governor Nguyen Thi Hong claimed that the issue of cross-holding in financial institutions had been “effectively handled”, and the problem of major shareholders manipulating banks had been managed.
However, while cross-ownership between banks may have virtually been eliminated, other types of complex ownership structures in the banking system have emerged. One particularly worrying trend is the participation of local real estate developers in banks; it is feared that this can adversely influence these banks’ lending practices.
Ownership structure reports issued by local banks suggest that most of them comply with regulations against cross-holdings issued by the SBV, such as the rules specified in Circular 36/2014/TT-NHNN. However, these regulations do not cover the issue of companies that are affiliates of bank shareholders holding shares in these banks. In most cases, such companies engage in different businesses, including capital-intensive ones such as real estate. These companies’ participation in banks is not driven by these banks’ profits, dividends, or stock price appreciation. Instead, the main benefit of their participation is the ability to influence these banks’ lending practices, including non-compliance activities such as providing excessive lending to certain clients. Essentially, real estate developers who can somehow control banks can channel more credits to their real estate projects by lending to these developers’ affiliates. They can even use employees as nominees to open companies to obtain loans from banks and then channel the money back to their businesses. It is hard to trace such transactions without thorough forensic audits, which are normally conducted only when major scandals break out.
Although it is difficult to trace these transactions and obtain definitive evidence, there are clear indications that some commercial banks are being controlled by real estate developers. For example, in May 2021, Tran Thi Thu Hang, CEO of Sunshine Group, a rising real estate developer with major projects in Hanoi and Ho Chi Minh City, became chairwoman of Kienlongbank. In the same month, Nguyen Duc Thuy, founder and major shareholder of Thaiholdings, a conglomerate with diversified interests, including in real estate and renewable energy, was elected vice-chairman of LienVietPostBank after Thaiholdings, Thuy and his family members bought large amounts of the bank’s shares. As of December 2021, although Thaiholdings and Thuy’s relatives had putatively divested from LienVietPostBank, Thuy remained the bank’s vice chairman. In a more recent case, National Citizen Bank (NCB) appointed Bui Thi Thanh Huong, CEO of Sun Group, a major real estate developer well-known for large hospitality and entertainment complexes, as its chairwoman in July 2021. NCB is known to have made several loans to Sun Group, including for a major casino project in Van Don, Quang Ninh Province.
These developments reinforce a trend that has long existed in Vietnam’s banking industry, where local tycoons try to gain control of commercial banks as a way to provide cheap funding for their businesses, especially in the real estate sector. Notable examples of such a relationship between bank and real estate developers include Techcombank and Masterise Group, VPBank and MIK Group, SEABank and BRG Group, Saigon Commercial Bank and Van Thinh Phat Group, HDBank and Sovico Group, and Sacombank and Him Lam Group.[6]
INCREASING RISKS FROM REGULATORY ARBITRAGE
Against this backdrop, there have been concerns that real estate developers may distort the lending practices of these banks to benefit their other businesses. In March 2021, it was reported by local media that new forms of cross-holdings, i.e., real estate developers controlling banks, may be driven by regulatory arbitrage. According to the Law on Credit Institutions, the total loan a financial institution can lend to a single customer must not exceed 15 per cent of its capital, and the total outstanding loan to a customer and that customer’s related persons must not exceed 25 per cent of its capital. This balance includes bonds issued by companies of the customer to the lending institution.[7]
Since most real estate developers own multiple subsidiaries, they can circumvent the limits set out by this regulation by having these subsidiaries borrow from banks. In addition, these developers may also use affiliated businesses whose owners are putatively not related to them to borrow from the same banks. In such cases, banks can lend to these affiliated groups more than 25 per cent of their own capital without knowing that they have actually crossed the limit. While the risk management system of commercial banks can raise red flags over these transactions, bank managers, who are also real estate developers or who have close connections with them, may suppress such warnings. There have been similar cases in European banks, such as Credit Suisse in the Greensill Capital scandal, where risk managers’ warnings were ignored and suppressed by the bank’s executives.[8]
The SBV’s Circular 22/2019/TT-NHNN, which came into force on 1 January 2020, further incentivises real estate developers to acquire major stakes in commercial banks.[9] This circular aims to address banks’ maturity risk and slow down the credit flows to risky sectors, including real estate. Specifically, it requires that the ratio of short-term deposits to medium and long-term loans does not exceed 40 per cent for the period between 1 January 2020 and 30 September 2020. After this period, the ratio would go down further, to 37 per cent by October 2020 and eventually to 30 per cent by 2022. Additionally, loans to the real estate sector would carry a high-risk weight of 200 per cent, a significant increase from 150 per cent.[10] This change results in higher risk-weighted assets, and thus reduces banks’ capital adequacy ratio. In other words, if a bank maintains the same level of assets (including loans and investments) as before the increase of risk weights, it is considered to be subjecting itself to higher risks. Furthermore, if the bank’s capital adequacy ratio drops too low, it will need to raise capital to maintain the minimum ratio specified by the SBV. This regulation therefore limits the asset and credit growth of commercial banks that are not well capitalised.
Due to these new restrictions, the growth of credit to the real estate sector declined from 21 per cent in 2019 to 11.89 per cent in 2020.[11] Real estate developers now therefore have stronger motivations to become major shareholders in commercial banks to gain easier access to capital. The above-mentioned cases of cross-holdings between banks and real estate developers may only be the tip of the iceberg. There could have been other cases where real estate developers have major influence on commercial banks, but it is nearly impossible for the public and the media to trace the ultimate owners of these banks due to their complex and opaque cross-holding structures.
Some industry experts have warned about the risks associated with this new form of cross-holdings in the banking system, particularly amid disruptions to the real estate market caused by the Covid-19 pandemic. For example, Le Xuan Nghia, former vice-chairman of the National Financial Supervisory Committee, emphasised that real estate companies serving as “backyards” of commercial banks need special attention from regulators.[12] He pointed out that several real estate developers have weak balance sheets, high debt-to-total asset ratio, and low liquidity ratio, and that their financial position “may be even worse than Evergrande’s”.[13] He also argued that the true picture is blurred by a thick “financial fog”[14] and the common practice of developers using nominees, such as their drivers, house-keepers and security guards, to set up affiliates to get bank loans on their behalf. He warned that if regulators failed to supervise carefully, cases like Evergrande would soon emerge in Vietnam.
Such concerns are well-founded and informed by past scandals in which banks’ ultimate owners channelled these banks’ money to their own pocket, causing heavy losses to the banks and putting the whole financial system at risk. One primary example is the case of Pham Cong Danh and the Vietnam Construction Bank (VNCB). As the former chairman of the bank, Danh has been prosecuted and jailed for “stealing money” from his bank and using the funds to secure loans from other lenders.[15] It is estimated that between 2012 and 2014, Danh caused VND9,000 billion (USD392 million) in losses to VNCB.
However, some others downplay the risk of real estate developers’ involvement in commercial banks. For example, Nguyen Tri Hieu, a banking expert, argues that the new owners of banks have changed their mindset. Given the stricter regulations imposed by the SBV, Hieu suggests without elaboration that the participation of real estate developers as well as companies from other industries in banks may actually be a good thing for the economy. Nevertheless, Hieu also admits that they need to learn from cases like VNCB and avoid repeating the same mistake.[16]
PROSPECTS AND RECOMMENDATIONS
We concur that if leaders of real estate companies, who are also ultimate owners of certain banks, follow the rulebooks of the SBV, the situation will be under control. Vietnam’s current banking regulations have clearly indicated the limit that a bank can lend to a client, as well as to a client and its related parties. Furthermore, with the implementation of Basel 2 and Basel 3 standards in Vietnam, capital adequacy and internal controls have been enhanced at most banks. Market discipline may also deter bad governance behaviours, and cases like VNCB can thus be prevented.
However, while it is now harder for real estate tycoons to manipulate banks, there are still certain loopholes that they can take advantage of. Through the complex networks of subsidiaries and affiliated companies, these ultimate shareholders can channel credits to their own companies, bypassing regulations on credit and lending limits for the real estate sector. For example, they can interfere so that banks will lend to affiliates that are not directly involved in the real estate sector by building up shell companies in other industries to borrow from banks. At the end of the day, money will still be channelled to their real estate business through these shell companies.
With the rise of shadow banking, fintech app and retail lending arms, these wealth transfers can become too complicated to trace as shell companies can borrow from different arms of a commercial bank. It is therefore extremely hard for regulators to determine how much a bank is exposed to an ultimate borrower. It is also difficult for regulators to monitor which banks are exposed to cross-holdings by real estate developers and act before a problem becomes too big to tackle. Real estate developers can continue to come up with new ways to manipulate banks, and regulators are usually a few steps behind.
Even if only a few banks in the financial system have these governance loopholes, there is still a significant risk for over-indebted developers to emerge from the above-mentioned unhealthy practices. There are also concerns that banks’ operating performance may deteriorate if its leaders focus on lending to their “backyard companies”, while neglecting the banks’ main businesses. This will lead to the misallocation of banks’ resources and reduce the effectiveness of the banking system in providing capital for the economy. Furthermore, due to the wish to maintain these practices to benefit themselves, bank owners may not have the incentive to promote digitalisation of the banking system. Consequently, the competitiveness of Vietnamese banks may decline compared to foreign banks.
To avoid these risks, regulators need a better information system to trace the ultimate ownership of commercial banks and mitigate ownership concentration. Furthermore, requiring board diversity and enhancing the role of independent directors are best practices that Vietnam can adopt. When ownership is not concentrated into a few large shareholders and independent directors can challenge shady business practices, banks will be better governed and better prepared to deal with external shocks. There will also be lower chances for cases like Evergrande to emerge in Vietnam.
ENDNOTES
[1] Alexandra Stevenson and Cao Li, “Why China’s Economy Is Threatened by a Property Giant’s Debt Problems,” The New York Times, 10 November 2021, https://www.nytimes.com/article/evergrande-debt-crisis.html.
[2] Xuân Thành Nguyễn, “Commercial Banks of Vietnam: From Legal and Policy Changes in the Period 2006-2010 to Restructuring Events in the Period 2011-2015,” Fulbright Economics Teaching Program, February 2016.
[3]Văn Luyện Lê and Duy Tuấn Khuất, “Sở Hữu Chéo Giữa Các Ngân Hàng Thương Mại Việt Nam Sau Khi Ra Đời Thông Tư 36,” Tạp Chí Ngân Hàng, 2 October 2017, http://tapchinganhang.gov.vn/so-huu-cheo-giua-cac-ngan-hang-thuong-mai-viet-nam-sau-khi-ra-doi-thong-tu-36.htm.
[4] The circular can be accessed at https://vanban.chinhphu.vn/default.aspx?pageid=27160&docid=178433
[5] Đình Vũ, “Thống Đốc Nguyễn Thị Hồng: Hệ Thống Ngân Hàng Không Còn Tình Trạng Sở Hữu Chéo,” Nhà Đầu Tư, 28 January 2021, https://nhadautu.vn/thong-doc-nguyen-thi-hong-he-thong-ngan-hang-khong-con-tinh-trang-so-huu-cheo-d47956.html. The only remaining case is between Asia Commercial Bank (ACB) and Real Estate Investment Hòa Phát – Á Châu (ACB holds 2.86 per cent of Hòa Phát – Á Châu while that company owns 0.046 per cent of ACB). It remains unclear why this case was not resolved.
[6] Khanh An, “Khi đại gia Việt ‘cưới’ ngân hàng”, Nhà Đầu tư, 30 July 2021, https://nhadautu.vn/khi-dai-gia-viet-cuoi-ngan-hang-d55714.html
[7] Hà Tâm, “Bóng Dáng Sở Hữu Chéo Trong Hệ Thống Ngân Hàng,” Đầu Tư Online, 3 March 2021, https://baodautu.vn/bong-dang-so-huu-cheo-trong-he-thong-ngan-hang-d138940.html.
[8] Marion Halftermeyer, “Credit Suisse Overruled Risk Managers on Greensill Loan”, Bloomberg, 11 March 2021, https://www.bloomberg.com/news/articles/2021-03-11/credit-suisse-overruled-risk-managers-on-loan-to-greensill.
[9] Circular 22/2019 is available at: http://congbao.chinhphu.vn/noi-dung-van-ban-so-22-2019-tt-nhnn-30003?cbid=28657
[10] Kiều Linh, “‘Nắn’ Dòng Vốn Vào Bất Động Sản,” VnEconomy, 23 November 2020, https://vneconomy.vn/nan-dong-von-vao-bat-dong-san-646111.htm.
[11] Minh Phương, “Ngân Hàng Nhà Nước Nói Gì về Tín Dụng Rót Vào Bất Động Sản, Chứng Khoán?,” Báo Tin Tức, 21 June 2021, https://baotintuc.vn/thi-truong-tien-te/ngan-hang-nha-nuoc-noi-gi-ve-tin-dung-rot-vao-bat-dong-san-chung-khoan-20210621151937032.htm.
[12] “Backyards” or “backyard companies” are terms commonly used in Vietnam to refer to companies that are related to key decision-makers of a business or a government official, normally without the knowledge of the public.
[13] Đào Vũ, “Hồi Chuông Cảnh Báo Từ ‘Bom Nợ’ Evergrande,” VnEconomy, October 2021, https://vneconomy.vn/hoi-chuong-canh-bao-tu-bom-no-evergrande.htm.
[14] “Financial fog” or “sương mù tài chính” is a term coined by Le Xuan Nghia in his interview with VnEconomy to describe the lack of transparency in banks’ asset quality. Several troubled loans were not classified as bad debts thanks to SBV’s current regulations which are designed to support commercial banks and their customers during the Covid-19 pandemic.
[“15] Hai Duyen, “Vietnamese Banks Protest after Prosecutors Call for $266 Million to Be Returned at Fraud Trial,” VnExpress International, 26 January 2018, https://e.vnexpress.net/news/business/vietnamese-banks-protest-after-prosecutors-call-for-266-million-to-be-returned-at-fraud-trial-3704021.html.
[16] Nhuệ Mẫn, “Chuyện đại gia bất động sản góp vốn tại ngân hàng”, Đầu tư chứng khoán, 13 August 2021, https://tinnhanhchungkhoan.vn/chuyen-dai-gia-bat-dong-san-gop-von-tai-ngan-hang-post276622.html
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EXECUTIVE SUMMARY
- Vietnam has a single state-led union federation, the Vietnam General Confederation of Labour (VGCL). However, the 2019 Labour Code legalised worker organisations (WOs) not affiliated to the VGCL. This is the first time the country has allowed any formal freedom of association.
- WOs are enterprise-level organisations only. They are not unions and are more limited in what they can do compared to unions.
- The reforms resulted from both external pressure from above, in the form of trade agreements with labour rights requirements, and internal pressure from below, in the form of workers’ self-organised strikes.
- The reforms may help the Vietnamese government reduce the number of strikes and labour militancy. They may also pressure the VGCL to become more representative of workers.
- However, it is unlikely that WOs, on their own, will become a significant force in Vietnamese society.
* Guest writer, Joe Buckley, is a researcher and consultant specialising in Southeast Asian labour politics, especially Vietnam.
ISEAS Perspective 2022/4, 19 January 2022
INTRODUCTION
Vietnam is a one-party state with a single, state-led union federation, the Vietnam General Confederation of Labour (VGCL). The Confederation is part of the Vietnam Fatherland Front, a group of state-affiliated mass organisations, and independent trade unions not affiliated to the VGCL are banned. The VGCL operates in the mode of a dual functioning union; a doctrine developed at the 10th Congress of the Russian Communist Party in 1921 in which the role of trade unions in post-revolutionary societies is to both encourage productivity and economic growth, and protect workers from harsh treatment.[1] The doctrine is reflected in the VGCL’s contemporary charter, which defines its functions as to protect workers’ rights and interests, propagate party directions, help increase productivity and development, and take part in economic and social management.[2]
The Confederation has been heavily criticised for not representing workers properly. At the enterprise level, it is dominated by employers, with trade union representatives often being the human resource managers of the companies who normally do not stand up for workers vis-à-vis employers. Furthermore, as a state-led union, at the national level, the VGCL is subordinate to the government and the ruling Communist Party of Vietnam, so it is unable to struggle for workers’ interests independently.[3] This does not mean, however, that the VGCL is useless. In national-level policy debates, for example, it tends to take a more pro-labour position than the Ministry of Labour, Invalids and Social Affairs (MOLISA).[4]
Over the past 15 years or so, Vietnam has seen significant numbers of wildcat strikes, self-organised by workers and not led by the VGCL.[5] These peaked in 2011, when there were around 1,000 recorded strikes, and have been gradually declining since then. They have reached relatively low levels over the past couple of years, with 121 strikes recorded in 2019 and 126 in 2020, according to VGCL’s data.[6]
In November 2019, Vietnam’s National Assembly passed a new Labour Code, which came into effect on 1 January 2021.[7] The new law contained several important changes, including protecting workers without contracts, definitions of discrimination and harassment, and clearer regulations on forced and child labour.[8] Perhaps the most significant and the most discussed change was Chapter XIII of the law. This allows, for the first time, a form of freedom of association, in which workers are permitted to form organisations not affiliated to VGCL.
This research paper provides an overview and analysis of the freedom of association reforms. First of all, it clarifies what the legislation does and does not allow, given that this has been widely misreported. It then explores the drivers of the reforms, before looking at the potential implications of the changes.
THE FREEDOM OF ASSOCIATION REFORMS
The most important thing to note is that, contrary to what has been widely reported,[9] Vietnam has not legalised independent trade unions at all. The VGCL remains the only legal trade union federation. Independent unions are still illegal. Rather, the 2019 Labour Code creates a new category of “enterprise-level worker organisation” (tổ chức của người lao động tại doanh nghiệp, WO).[10] There are now three different legal concepts of relevance here:
| Type of organisation | Definition |
| Trade union (công đoàn) | Organisations that are part of the VGCL, legislated by the Trade Union Law. |
| Enterprise-level worker organisations (tổ chức của người lao động tại doanh nghiệp, WOs) | Worker organisations not affiliated to the VGCL, legislated by Chapter XIII of the 2019 Labour Code. |
| Grassroots worker representative organisations (tổ chức đại diện người lao động tại cơ sở, WROs) | A term that encompasses both enterprise-level trade unions and enterprise-level worker organisations. |
According to the 2019 Labour Code, workers have the right to establish and join both unions and WOs. The Trade Union Law,[11] which regulates unions, and Chapter XIII of the Labour Code, which regulates WOs, grant some of the same protections to both types of WROs. For example, both laws ban employers from discriminating against members of either type of organisation; both give representatives from each organisation the right to engage in enterprise-level collective bargaining and dialogue with employers; both can organise and lead strikes provided they follow the correct (lengthy and bureaucratic) legal procedures; and both can receive support from other registered organisations and agencies within Vietnam.
There are, though, some important differences between the two types of WROs, which put WOs at a disadvantage compared to trade unions. For example, unions can engage in political and policy discussions at every level of the state and government, while enterprise-level WOs cannot do so beyond the enterprise level. Furthermore, there is no legislation giving WOs the right to form regional or sectoral federations beyond the enterprise level; in contrast, the VGCL has a very clear organisational structure, from the national confederation level down. Articles 172 and 174 of Chapter XIII of the Labour Code both make a passing reference to WOs being able to “link” (liên kết), but this is not expanded or elaborated upon. Finally, the state has certain responsibilities towards the VGCL and can give them financial support for projects. This is not the case for WOs. In addition, outside of the strictly legal procedures, figures in government also frequently stress their support for unions over WOs.[12]
In addition to this, there is another major issue with regard to forming WOs; they cannot be established in practice, at least for now. The Labour Code does not detail the basic administrative procedures required for creating and registering WOs, such as which documents need filling out and which government office these documents need to be submitted to. Rather, the law says that these procedures will be further regulated by the government. A decree that would explain and legislate such procedures was expected to be enacted in 2020 but that has not been released as of December 2021.[13] Consequently, workers who want to establish a formal WO in their enterprise cannot yet do so.
WHERE DID THE REFORMS COME FROM?
When explaining where these freedom of association reforms have come from, the most obvious and most reported driver has been the requirements of international trade agreements, or what I call external pressure from above. Two major trade deals to which Vietnam is a party, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA), both contain labour provisions committing signatories to ratify and implement the eight core conventions of the International Labour Organisation (ILO). The ILO is the UN agency responsible for labour, whose members include governments, employers, and unions. They have many conventions on various aspects of labour rights, which states are invited and encouraged to join. Eight of these are seen as fundamental to the basic ability for trade unions to exist and function.[14] Vietnam had already ratified six of the eight—on topics such as forced labour, child labour, equal remuneration, and discrimination—but the two that they had not ratified are the two related to freedom of association: Convention No. 98 and Convention No. 87.
Convention No. 98 is known as the Right to Organise and Collective Bargaining Convention.[15] It protects workers’ and employers’ organisations from interfering with each other. In the Vietnamese context, this should mean ending the practice of enterprise-level union representatives being human resource managers or someone similar. Vietnam ratified Convention No. 98 in summer 2019 (it came into effect a year later), but there has been no published research into what impact, if any, this has had in practice. Convention No. 87 is known as the Freedom of Association and Protection of the Right to Organise Convention,[16] allowing workers to form and join organisations of their own choice without prior authorisation. Vietnam has said it will ratify this convention by 2023. The freedom of association reforms introduced in the 2019 Labour Code created the legal framework allowing Vietnam to comply with the convention.
The argument from those who stress the external pressure from above as the driver of reforms is that Vietnam made the freedom of association reforms in order to comply with the requirements of the trade agreements to which it wanted to be a party.[17] The implication is that without external pressure from above, there would not have been such reforms. Undoubtedly, this is a large and important part of the explanation. In my view, however, focusing entirely on trade agreements misses a critical factor: internal pressure from below.
This is pressure created by workers’ self-organised militancy, mentioned in the introduction to this paper. From the mid-2000s until the late 2010s, there were hundreds of recorded strikes every year, largely in industrial export manufacturing, primarily demanding things such as higher wages (or wages that the employer had not paid) and better treatment at workplaces. Every strike was organised by workers themselves without the union; the VGCL has never led a strike. Strike numbers peaked in 2011, when nearly 1,000 were recorded.[18] Over the past decade, Vietnamese authorities, including the VGCL and MOLISA, have been attempting a number of reforms to reduce the number of strikes, and create “harmonious labour relations” (quan hệ lao động hài hoà). These include better legal representation for workers in disputes,[19] collective bargaining experiments,[20] and the creation of a National Wage Council to negotiate annual wage rises.[21] While strike numbers have fallen significantly from the 2011 high point, reducing them further has remained a major concern of the Vietnamese authorities. The freedom of association reforms in the 2019 Labour Code can be seen as a further step in that direction.
In sum, the reforms have been driven by pressure from two directions: internal pressure from below (worker militancy) and external pressure from above (requirements of trade agreements). Allowing the establishment of independent WOs as stipulated in the 2019 Labour Code is one of the key outcomes of these reforms. The next section will discuss implications of this important change for Vietnam’s labour context going forward.
WHAT DO THE REFORMS MEAN FOR THE FUTURE?
The implications of the reforms currently remain unclear given that WOs do not and cannot yet exist in practice. However, three preliminary observations and predictions can be made. First, as I have argued elsewhere[22] and above, the reforms are the latest in a number of efforts to reduce the number of strikes and labour militancy. It may be working; strike numbers have been falling and these recently reached especially low levels, hovering at just above 120 for the past couple of years. WOs, once established in practice, may further contribute to the trend of declining numbers of strikes, as workers’ grievances and disputes become channelled through institutional mechanisms of dispute resolution rather than self-organised activism. There is no guarantee that this would be positive for labour. Strikes have brought significant gains for workers, in terms of both immediate demands and national level policy reforms.[23] There is no certainty that WOs will be able to do the same; indeed, weak WOs may not be able to do much at all, resulting in a net loss for working-class power.
The second implication is more positive. The existence of independent WOs as competitors of trade unions could create pressure for the VGCL to become more representative of workers. For example, the vice president of the provincial VGCL labour federation in Nghệ An, a province in North Central Vietnam, said this explicitly in an opinion piece published in the newspaper of the provincial Communist Party. In the article, she says that the arrival of WOs presents competing organisations for the trade union, meaning it will need to be good at establishing unions, undertaking collective bargaining, and leading and organising strikes.[24] The last point is especially notable as the VGCL has never organised a strike. More broadly, in response to the recent trend of export manufacturing employers in southern Vietnam facing difficulties in retaining or recruiting workers—a result of domestic migrant workers abandoning urban areas and returning to their hometowns because of COVID-19[25]—the VGCL developed a plan to motivate workers to stay in or return to their jobs. A core part of this involved encouraging VGCL offices at various levels to negotiate with employers to improve wages, benefits and conditions.[26] While it is hard to confirm that the WO legislation had any direct impact on this response, it is a clear demonstration of how the VGCL is trying to bring more benefits to workers, in the new context of greater official freedom of association and potential competition from WOs.
Finally, it is unlikely that WOs, on their own, will directly become a significant force for change in Vietnamese society. As noted earlier, currently, WOs have not officially existed, since regulations and instructions on how to register one have not yet been promulgated. Furthermore, once they do come into existence, the law places strict limits on what they can and cannot do, meaning that unless the government is willing to allow further changes, WOs will be unable to engage in national-level policy discussions or form regional and sectoral federations. Another major problem is that many workers have not even heard of WOs.[27]
Given these reasons, it is difficult to see how the organisations themselves could become a vanguard for change, at least in the short to medium term. More interesting to observe, however, will be how their introduction, on paper and soon in practice, may affect the two major forces in Vietnam’s labour politics, namely the state-led VGCL and workers’ self-organised strikes.
ENDNOTES
[1] Alex Pravda and Blair A. Ruble, “Communist Trade Unions: Varieties of Dualism”, in Alex Pravda and Blair A. Ruble (Eds), Trade Unions in Communist States (Boston; London; Sydney: Allen & Unwin Ltd., 1986), pp. 1-21: 2.
[2] VGCL, Điều lệ Công đoàn Việt Nam (Đại hội công đoàn lần thứ XII thông qua ngày 24 tháng 9 năm 2018) [Vietnamese Trade Union Charter (adopted at the XII union congress on 24 September 2018)], http://www.congdoan.vn/FileManager/Files/nguyenthingoctu/files/DIEU%20LE%20%20CDVN%20khoa%20XII%20(b%E1%BA%A3n%20ch%C3%ADnh).pdf
[3] Do Quynh Chi and Di van Den Broek, “Wildcat strikes: A catalyst for union reform in Vietnam?”, Journal of Industrial Relations 55, no. 5 (2013), pp. 783-799.
[4] Joe Buckley, Vietnamese Labour Militancy: Capital-labour antagonisms and self-organised struggles (London; New York: Routledge, 2022): 26.
[5] Kaxton Siu and Anita Chan, ‘Strike Wave in Vietnam, 2006–2011’, Journal of Contemporary Asia 45, no. 1 (2015), pp. 71–91.
[6] “Số cuộc ngừng việc tập thể giảm gần 50% [Collective work stoppages reduced by nearly 50%]”, Lao Động [online], 7 January 2020, https://laodong.vn/cong-doan/so-cuoc-ngung-viec-tap-the-giam-gan-50-776934.ldo; Hoàng Mạnh, “126 cuộc ngừng việc tập thể trong năm 2020 [126 collective work stoppages in 2020]”, Dân Trí, 9 January 2020, https://dantri.com.vn/lao-dong-viec-lam/126-cuoc-ngung-viec-tap-the-trong-nam-2020-20210109093951160.htm
[7] National Assembly, Bộ luật Lao động 2019 [2019 Labour Code], 2019, https://thuvienphapluat.vn/van-ban/Lao-dong-Tien-luong/Bo-Luat-lao-dong-2019-333670.aspx.
[8] ILO, ‘Revised Vietnamese Labour Code to help everyone gain fair shares of economic growth’, ILO, 20 November 2019, https://www.ilo.org/hanoi/Informationresources/Publicinformation/Pressreleases/WCMS_729339/lang–en/index.htm
[9] Eric San Juan, “Is there a glimmer of hope for Vietnamese workers?”, Equal Times, 18 February 2020, https://www.equaltimes.org/is-there-a-glimmer-of-hope#.YawsQ_FBy3I
[10] National Assembly, Bộ luật Lao động 2019 [2019 Labour Code], 2019, https://thuvienphapluat.vn/van-ban/Lao-dong-Tien-luong/Bo-Luat-lao-dong-2019-333670.aspx
[11] National Assembly, Luật Công đoàn [Trade Union Law], 2012, https://vanban.chinhphu.vn/portal/page/portal/chinhphu/hethongvanban. For recent revisions to this law, see: National Assembly, Luật sửa dổi, bổ sung một số điều của luật công đoàn, dự thảo 2 [Law amending and adding to a number of article of the trade union law, second draft], 2021, https://thuvienphapluat.vn/van-ban/Doanh-nghiep/Luat-Cong-doan-sua-doi-445264.aspx
[12] See, for example, “Kỷ niệm Ngày thành lập Công đoàn Việt Nam: Vinh quang 90 năm đồng hành cùng đất nước [Anniversary of the founding of the Vietnamese Trade Union: A glorious 90 years accompanying the country]”, Lao động, 28 July 2019, https://laodong.vn/cong-doan/ky-niem-ngay-thanh-lap-cong-doan-viet-nam-vinh-quang-90-nam-dong-hanh-cung-dat-nuoc-746568.ldo
[13] T.K. Tran, “Ngoài Công đoàn, VN cần cho các tổ chức khác hoạt động vì người lao động [Besides the union, Vietnam needs other organisations for workers]”, BBC Vietnamese, 30 October 2021, https://www.bbc.com/vietnamese/forum-59089257
[14] Kari Tapiola, The Teeth of the ILO: The impact of the 1998 ILO declaration on fundamental principles and rights at work (Geneva: ILO, 2018).
[15] ILO, C098 – Right to Organise and Collective Bargaining Convention, 1949 (No. 98), 1949, https://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:12100:0::NO::P12100_ILO_CODE:C098.
[16] ILO, C087 – Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), 1948, https://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:12100:0::NO::P12100_ILO_CODE:C087.
[17] Pham Trong Nghia, Trade and Labour Rights: The Case of the TPP, University of Oxford Global Economic Governance Programme Working Paper 124, 2017, https://www.geg.ox.ac.uk/sites/geg.bsg.ox.ac.uk/files/GEG%20WP%20124%20-%20Trade%20%26%20Labour%20Rights%20%20The%20Case%20of%20the%20TPP%20-%20Nghia%20Trong%20Pham_0.pdf; Angie N Tran, Jennifer Bair, Marion Werner, “Forcing Change from the Outside? The Role of Trade–labour Linkages in Transforming Vietnam’s Labour Regime”, Competition & Change 21, no. 5 (2017), pp. 397–416.
[18] For in-depth studies of strikes and other forms of Vietnamese labour activism, see: Benedict J. T. Kerkvliet, Speaking Out in Vietnam: Public Political Criticism in a Communist Party-Ruled Nation (Ithaca; London: Cornell University Press, 2019); Angie Ngoc Tran, Ties That Bind: Cultural Identity, Class, and Law in Vietnam’s Labor Resistance (Ithaca: Cornell University Press, 2013); Joe Buckley, Vietnamese Labour Militancy: Capital-labour antagonisms and self-organised struggles (London; New York: Routledge, 2022).
[19] Tu Phuong Nguyen, Workplace Justice: Rights and Labour Resistance in Vietnam (Singapore: Palgrave Macmillan, 2019).
[20] Katie Quan, “One Step Forward: Collective Bargaining Experiments in Vietnam and China”, in A. Chan (ed), Chinese Workers in Comparative Perspective (Ithaca; London: Cornell University Press, 2015), pp. 174-192.
[21] ILO, “National wage council launched, giving employers and workers a voice in minimum wage setting”, ILO, 3 August 2013, https://www.ilo.org/hanoi/Informationresources/Publicinformation/WCMS_218763/lang–en/index.htm.
[22] Joe Buckley, “Freedom of Association in Vietnam: A Heretical View”, Global Labour Journal 12, no. 2 (2021), pp. 79-94.
[23] For some examples, see Buckley, “Freedom of Association in Vietnam”.
[24] Nguyen Thi Thu Nhi, “Phát huy vai trò của tổ chức công đoàn Nghệ An trong giai đoạn mới’ [Upholding the role of Nghe An trade unions in the new period]”, Báo Nghệ An, 28 July 2021, https://baonghean.vn/phat-huy-vai-tro-cua-to-chuc-cong-doan-nghe-an-trong-giai-doan-moi-291346.html.
[25] Lien Hoang, “Labor paradox leaves Vietnam factories reeling after COVID exodus”, Nikkei Asia, 20 October 2021, https://asia.nikkei.com/Business/Companies/Labor-paradox-leaves-Vietnam-factories-reeling-after-COVID-exodus.
[26] Hà Anh, “Giải pháp để người lao động không về quê tự phát’ [Solutions to stop workers spontaneously returning to their hometowns]”, Lao động, 7 October 2021, https://laodong.vn/cong-doan/giai-phap-de-nguoi-lao-dong-khong-ve-que-tu-phat-961286.ldo.
[27] Michael Tatarski, “Vietnamese workers still in the dark about potential of new representative organisations”, China Labour Bulletin, 21 January 2021, https://clb.org.hk/content/vietnamese-workers-still-dark-about-potential-new-representative-organisations.
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EXECUTIVE SUMMARY
- Adopted in November 2017, the Vietnamese Government’s Resolution 120 on “Climate Resilience and Sustainable Development of the Mekong Delta Region” has provided a long-term strategic vision and outlined the direction for Vietnam’s water diplomacy to address problems threatening its Mekong Delta.
- After four years of implementing the Resolution, Vietnam has achieved some positive outcomes in gaining international recognition and support towards the sustainable development of the Delta.
- However, the reluctance of some ASEAN maritime states in engaging with Mekong issues, as well as the differences among Mekong countries and the major powers involved in the sub-region regarding how to address these issues, continue to hamper the realization of the Resolution’s goals.
- A reasonable way to tackle these issues could be the adoption of a win-win approach that goes beyond water issues, in order to facilitate the achievement of key priorities pursued by the individual parties involved.
* Truong-Minh Vu is a lecturer at the University of Social Sciences and Humanities – Ho Chi Minh City. He has also been a senior fellow of The Indiana University School of Public and Environmental Affairs (SPEA) since 2018. Tram Nguyen is a lecturer at the School of Business, International University, Vietnam National University – HCMC.
ISEAS Perspective 2021/166, 17 December 2021
INTRODUCTION
The Mekong Delta is Vietnam’s most fertile region, accounting for much of the country’s rice, aquatic and fruit export. However, in recent years, climate change and extreme weather events, including floods, droughts, and saltwater intrusion, have been affecting the livelihood and food security of 17 million people living in the Delta, as well as the whole region’s ecological system. The construction of upstream hydropower infrastructure and intense economic activities in the region have also contributed to the degradation of water quality and change in water flow and alluvial soil.
Acknowledging the need for a long-term strategic vision and for international cooperation to address the problems threatening the Mekong Delta region (MDR), on 17 November 2017, the Vietnamese government issued Resolution 120/NQ-CP on “Climate Resilience and Sustainable Development of the Mekong Delta Region” (hereafter “Resolution 120”), also known as the “Thuan Thien” (Adapting to Nature) Resolution.[1] Resolution 120 emphasizes the need to put humans at the centre of development and adopts the sustainable and economical use of natural resources as the key development principle. The document also calls for regional and bilateral cooperation towards effective and sustainable use of water and other resources in the Mekong River Basin, based on mutual benefits.
Resolution 120 outlines three activities for Vietnam’s Mekong water diplomacy: (i) coordinating bilateral and multilateral cooperation with Mekong upstream countries, as well as major river basins and deltas in the world; (ii) promoting Vietnam’s active participation in the Mekong River Commission (MRC), existing cooperative mechanisms of Mekong River Basin countries, and cooperative mechanisms between Mekong River Basin countries and development partners; and (iii) developing strategic partnerships with other countries and international development partners to mobilize external resources (funding, knowledge, and technology) towards addressing climate change and promoting sustainable development in the MDR. The National Committee on Climate Change, the Ministry of Natural Resources and Environment and the Ministry of Foreign Affairs are tasked with implementing these goals. This paper provides a preliminary assessment of Vietnam’s Mekong water diplomacy since the adoption of Resolution 120.
VIETNAM’S MEKONG WATER DIPLOMACY SINCE THE ADOPTION OF RESOLUTION 120
Involvement in Bilateral Cooperation and Intra-regional Mechanisms with Upstream Countries
Vietnam has consistently contributed to the success of Mekong regional cooperative mechanisms by actively proposing and implementing initiatives, getting involved in drafting key documents, and allocating resources to support joint projects. In March 2018, Vietnam hosted the 10th Cambodia–Laos–Vietnam Summit on Development Triangle Area and the 6th Greater Mekong Subregion (GMS) Summit, along with its sideline event, the GMS Business Summit.[2] Following the completion of the MRC’s Study on Sustainable Management and Development of the Mekong River, including the Impact of the Hydropower Development Projects (also known as the Council Study) in 2017, meetings were held among the Ministry of Natural Resources and Environment, Vietnam National Mekong Committee, and representatives from key NGOs, development partners, academia and civil society. These meetings resulted in the development of several Council Study national uptake action plans.[3] Vietnam also participated in the implementation of the MRC’s Notification, Prior Consultation and Agreement procedure by organizing national consultation activities for Laos’ Pak Lay hydropower project.
In 2020, the State Audit Office of Vietnam proposed an environmental audit on water management in the Mekong River Basin. Started in March 2021, the audit assessed the fulfilment of UN sustainable development goals concerning the use, management and protection of water resources in the Mekong River Basin. Two upper-stream countries – Myanmar and Thailand – agreed to participate in this initiative.[4] On data sharing, in November 2018, the Vietnam National Space Center signed a memorandum of understanding with the MRC on using satellite data from the Vietnam Data Cube system in monitoring and assessing water and other resources in the Mekong River Basin.[5]
At meetings organized under intra-regional cooperative mechanisms, Vietnamese officials highlighted the critical situation of the Mekong Delta and urged member countries to cooperate in water resource management and promote sustainable development in the region. For example, at the 3rd MRC Summit in 2018, then-Prime Minister Nguyen Xuan Phuc raised the water security problems in the Mekong region and called for the effective implementation of MRC regulations, cooperative mechanisms for water resource management, and transparent data sharing among Mekong countries. At the 2019 Ministerial Meeting of Lancang–Mekong Water Resources Cooperation, then-Deputy Minister of Natural Resources and Environment Le Cong Thanh reiterated these points and called for the effective implementation of the Five-year Action Plan on Lancang–Mekong Water Resources Cooperation (2018-2022). Environmental degradation was once again underscored as one of the urgent issues for the Mekong–Lancang Cooperation (MLC) countries at the 6th MLC Foreign Ministers’ Meeting in June 2021. Addressing the meeting, Vietnamese Foreign Minister Bui Thanh Son advocated for data sharing, joint efforts in water resource management, and greater coordination with other cooperative mechanisms.
Vietnam’s active participation in these mechanisms shows that it considers not only national interests but also the region’s sustainable development prospects. This approach is faithful to a core principle of water diplomacy, i.e. water diplomacy is more than just water resource management, but also a means to achieve the broader long-term objective of improving regional security, stability, and prosperity.[6] Nevertheless, the outcomes of Vietnam’s water diplomacy so far have been mixed. This can be attributed to the nature of intra-regional cooperation in the Mekong region. Except for the MRC, all existing intra-regional cooperative mechanisms are non-binding policy consultation platforms.[7] Most of the meetings under these mechanisms can be classified as action-orientated conferences, which focus mainly on building basic principles and guidelines for interaction and collective action, rather than formulating legal norms. [8] Additionally, comprised of mostly ASEAN countries, they reflect ASEAN’s diplomacy features, including lenient management, consensus-based decision-making, and prioritization of maintaining dialogue over conflict settlement. [9] As meetings often conclude with an agreement on statements of intent rather than a legal framework, implementation deficits can easily arise. [10]
Involvement in Inter-regional Cooperation
Due to its economic potential and geopolitical significance, the Mekong sub-region has attracted the attention of global powers, including the United States, Japan, South Korea, Australia and India, all with their mechanisms[11] to engage with the riparian countries.[12] As Hanoi welcomes a multilateral approach to water resource management and sustainable development in the Mekong, it has actively participated in these mechanisms. In November 2020, Vietnam co-chaired the 10th Mekong–Republic of Korea Foreign Ministers’ Meeting and the 12th Mekong–Japan Summit Meeting. In January 2021, Vietnam and the United States co-hosted the first Friends of the Mekong Policy Dialogue under the Mekong-US Partnership.
One central challenge to the Mekong sub-region lies in balancing the developmental and geopolitical interests of multiple internal and external actors. While Laos, Cambodia, and Myanmar have relied on China for hydropower infrastructure development, Vietnam has tried to avoid technological dependence on its northern neighbor and resisted China’s infrastructural hegemony in the region.[13] Inter-regional cooperative mechanisms led by the great powers not only open new windows of opportunity for downstream Mekong countries to address water-related concerns but could also transform the regional order. By boosting ties with external actors and assuming a leading role in inter-regional mechanisms, Vietnam is gradually increasing its diplomatic clout in the sub-region.
Within ASEAN, Vietnam is looking for a common position on the issue of water security in the Mekong basin. As the 2020 Chair of ASEAN, Vietnam hosted the “ASEAN Forum on Sub-regional Development: Converging Mekong Sub-regional Cooperation with ASEAN Goals” in September 2020. The forum discussed the importance of sub-regional cooperation in enhancing ASEAN connectivity and economic links, the challenges to sub-regional cooperation, and the role of development partners.[14] Vietnamese Deputy Foreign Minister and Chair of the forum, Nguyen Quoc Dung, emphasized the strategic role of a prosperous, peaceful and sustainable Mekong sub-region to ASEAN’s regional position and the future of the ASEAN community. In the joint communiqué of the meeting, ASEAN countries agreed to promote sub-regional cooperation frameworks, including those in the Mekong region, and align sub-regional development with the comprehensive development of ASEAN.[15]
Vietnam’s attempt to get ASEAN involved in the Mekong has met with mixed responses from other members. Maritime ASEAN states have not shown much enthusiasm for Hanoi’s proposal as they think that the Mekong issues should be addressed through sub-regional frameworks.[16] However, it is too early to evaluate Vietnam’s efforts. The 2020 ASEAN Forum on Sub-regional Development is the first of its kind, and so far, the only time that the ASEAN Coordinating Council has tabled this issue in a separate session.[17] Additionally, sub-regional issues might be viewed as having less urgency than the Covid-19 pandemic, which has been the primary concern of all countries and a key point of discussion in ASEAN meetings.[18]
Strengthening Strategic Partnerships with Development Partners
As of 2021, Vietnam has engaged more than 20 development partners in the implementation of Resolution 120. These development partners, with diverse experiences, expertise and resources, have committed to lend Vietnam a total of US$2.2 billion to facilitate the implementation of the Resolution.[19]
The World Bank is one of Vietnam’s most active and largest partners. The organization has engaged in cross-cutting collaboration with Vietnam in three major fields of governance: environmental sustainability, inclusive economic growth, and human resource and knowledge development.[20] Most World Bank projects are funded through its Investment Project Financing instrument, which provides the MDR with not only the necessary budget but also knowledge transfer and technical assistance for the long-term success of project implementation and institutionalization.[21] The Vietnamese Ministry of Planning and Investment has also been working with the World Bank on a future budget support programme of US$1.05 billion to improve infrastructure, prevent droughts and saltwater intrusions, and adapt to climate change in the MDR.
Another long-term partner of the MDR is the Netherlands. Resolution 120 specifically mentions the diplomatic task of expanding and strengthening the Strategic Partnership with the Netherlands on climate change adaptation and water management, which was established in 2010. Both countries have also affirmed that sustainable agriculture and food security remain the key pillars in the Vietnam–Netherlands Comprehensive Partnership.[22] The Dutch Fund for Climate and Development, with a budget of EUR160 million (US$185 million), also committed to fund businesses seeking to support climate-resilient ecosystem and community in the Mekong Delta.
Additionally, the United States, France, Germany, Japan, Australia and the European Union have also expressed their appreciation for and commitment to the implementation of Resolution 120.[23] These diplomatic endorsements show that Vietnam has successfully expanded and strengthened strategic collaboration with development partners to mobilize resources for the MDR. International support in terms of knowledge sharing, technology transfer, and investment is crucial to Vietnam’s proactive adaptation to nature and to its bid to turn challenges of climate change into opportunities.
THE WAY FORWARD FOR VIETNAM’S MEKONG WATER DIPLOMACY
After four years of implementing Resolution 120, Vietnam’s water diplomacy has yielded positive outcomes. Through its active participation in bilateral and multilateral mechanisms, Vietnam has shed light on the pressing water security issues facing the MDR. Proactive engagement with various stakeholders within and outside the Mekong sub-region has earned Vietnam international support in the form of knowledge sharing, technology cooperation, and investment. Similar to the South China Sea dispute, Vietnam seeks to internationalize and multilateralize the Mekong issue. Particularly, Hanoi has taken some initial steps to generate greater international awareness of transboundary water management problems in the Mekong River Basin, starting with raising the topic in ASEAN meetings. Moving forward, Vietnam should continue to advocate for the inclusion of key sub-regional matters in the broader regional agenda.
By delivering clear and consistent messages on problems facing the MDR and the effective management of the Mekong River Basin’s resources to a broader foreign audience, Vietnam can further garner international attention and support in realizing Resolution 120’s development goals while enhancing the country’s diplomatic credentials in sub-regional mechanisms. With the involvement of external actors in the Mekong region, discussions on China’s control of the upstream Mekong through hydropower dams will gain momentum. One of the tasks for the next five years is to enhance Vietnam’s presence in the MLC and encourage China to be transparent and responsive about sharing water-related data, especially information about the planning and operation of its hydropower dams, as well as how water is discharged downstream.[24] Additional attention from the international community might induce greater cooperation from China, and thus make this task more achievable.
Another challenge ahead for Vietnam is to harmonize its interests with those of the upper-stream countries. Transboundary water management in the Mekong River Basin is a complex issue as each country follows a different development path and has divergent interests in the Mekong River. For example, Laos and Cambodia aim to harness the Mekong’s hydropower potential for energy generation.[25] However, Vietnam, as the most downstream country, is concerned about the negative impacts of upstream hydropower dams on the survival of the MDR and has therefore advocated for the effective and sustainable management of transboundary water in the region.
To address this challenge, firstly, Vietnam needs to cooperate with other Mekong countries in conducting joint studies and generating scientific analyses and assessments of the situation of the Mekong River Basin. Vietnam should also continue to promote information sharing and data transparency. These measures would produce agreed-upon scientific knowledge and shared understanding between parties, resulting in a more collaborative decision-making process and more trustful relationships. Second, Vietnam should propose mutually beneficial options that allow one side to achieve their most important priorities, while satisfying the other side’s top interests.[26] This approach requires Vietnam and its partners to look beyond the surface to understand the underlying drivers of Mekong countries’ water policies. Consequently, the possibilities for effective transboundary water management may lie in other economic sectors, such as agriculture and energy production, and water negotiations should therefore not be viewed as a zero-sum game.[27]
CONCLUSION
Vietnam’s water diplomacy since the adoption of Resolution 120 in November 2017 reflects the country’s concerns over the MDR’s sustainable development prospects in the context of climate change and intensive human interventions in the Mekong River Basin. Treating Mekong issues as a national security matter, Vietnam has mobilized resources for the development of the MDR and promoted regional cooperation towards a sustainable Mekong River Basin.
However, the divergence in development direction and interests of Mekong countries, as well as the region’s complex interactions with external actors, remains a challenge. The key to overcoming these barriers is a win-win approach to water diplomacy, in which water is viewed as a shared resource, and all parties realize that they can best achieve mutually beneficial outcomes by addressing common water issues while taking into consideration the broader economic, social and environmental contexts that each country is facing.
ENDNOTES
[1] Full text of the Resolution (in Vietnamese) is available at: http://dwrm.gov.vn/uploads/laws/file/2017/120-nq-cp-ve-phat-trien-ben-vung-dbscl-thich-ung-bdkh.pdf
[2]VOV World, “Vietnam Contributes to Regional Economic Connectivity through GMS”, 15 March 2018, https://vovworld.vn/en-US/content/NTQ1OTEz.vov.
[3] MRC, “Basin-Wide Assessment of Climate Change Impacts on Hydropower Production: Final Report”, 2019, https://www.mrcmekong.org/assets/Publications/Basin-wide-Assessment-of-Climate-Change-Impacts-on-Hydropower-Production_report-13May19.pdf.
[4] Nhan Dan Online, “Vietnam to Host Audit of Water Management Cooperation in Mekong River Basin”, 23 December 2020, https://en.nhandan.vn/scitech/item/9426402-vietnam-to-host-audit-of-water-management-cooperation-in-mekong-river-basin.html.
[5] VNSC, ‘Vietnam National Space Center coordinates with Mekong River Commission in exploiting satellite data application’, 4 December 2018, https://vnsc.org.vn/en/news-events/vietnam-national-space-center-coordinates-with-mekong-river-commission-in-exploiting-satellite-data-application/.
[6] Susanne Schmeier and Zaki Shubber, ‘Anchoring water diplomacy – The legal nature of international
river basin organizations’, Journal of Hydrology 567 (2018): 114-120.
[7] Han Phoumin and Minh Thu To, “Water Resources Management in the Mekong Basin”, in Subregional Development Strategy in ASEAN after COVID-19: Inclusiveness and Sustainability in the Mekong Subregion (Mekong 2030), edited by Fukunari Kimura (Jakarta: ERIA, 2019), pp. 161–190.
[8] Volker Ritterberger, “Global Conference Diplomacy and International Policy-Making: The Case of UN-Sponsored World Conferences”, European Journal of Political Research 11 (1983): 167-182.
[9] Koichi Sato, “The Rise of China’s Impact on ASEAN Conference Diplomacy: A Study of Conflict in the South China Sea”, Journal of Contemporary East Asia Studies 2, no. 2 (2013): 95-110.
[10] Rittergerger, ‘Global Conference Diplomacy’.
[11] The inter-regional cooperative mechanisms include Mekong–US Partnership, Mekong–Japan Summit, Mekong–Republic of Korea Summit, Mekong–Ganga Cooperation, and Mekong–Australia Partnership.
[12] Fabio Figiaconi, “Geopolitical Competition in the Indo-Pacific: The Mekong Region”, ISPI Online, 2 April 2020, https://www.ispionline.it/it/pubblicazione/geopolitical-competition-indo-pacific-mekong-region-25627.
[13] Chris Sneddon and Coleen Fox, “Power, Development, and Institutional Change: Participatory Governance in the Lower Mekong Basin”, World Development 35, no. 12 (2007): 2161-2181; Truong-Minh Vu and Maximilian Mayer, “Hydropower infrastructure and regional order making in the Sub-Mekong region”, Revista Brasileira de Política Internacional 61, no. 1 (2019).
[14] Viet Nam News, “Mekong sub-regional co-operation must converge with ASEAN goals: official”, 14 June 2020, https://vietnamnews.vn/politics-laws/749602/mekong-sub-regional-co-operation-must-converge-with-asean-goals-official.html.
[15] Full text of the joint communiqué is available at: https://asean.org/joint-communique-of-the-53rd-asean-foreign-ministers-meeting/
[16] Hoang Thi Ha and Farah Nadine Seth, “The Mekong River Ecosystem in Crisis: ASEAN Cannot be a Bystander”, ISEAS Perspective (2021/69).
[17] An Nhien, “ASEAN Cần Tập Trung Vào Các Khía Cạnh Khác Nhau Của Phát Triển Tiểu Vùng’” Công An Nhân Dân Online, 9 September 2020, https://cand.com.vn/Su-kien-Binh-luan-thoi-su/ASEAN-can-tap-trung-vao-cac-khia-canh-khac-nhau-cua-phat-trien-tieu-vung-i580025/; Asian Development Bank, “ASEAN Foreign Ministers Meeting – Masatsugu Asakawa”, 10 September 2020, https://www.adb.org/news/speeches/asean-foreign-ministers-meeting-masatsugu-asakawa; ASEAN Vietnam 2020, “ASEAN Forum on Sub-Regional Development Opens”, 14 July 2020, https://www.asean2020.vn/xem-chi-tiet1/-/asset_publisher/ynfWm23dDfpd/content/asean-forum-on-sub-regional-development-opens.
[18] Phan The Thang, “Vietnam’s efforts and initiatives as ASEAN Chair 2020 – Challenges of and response to the COVID-19 pandemic”, Vietnam Pictorial, 14 May 2020, https://vietnam.vnanet.vn/english/vietnams-efforts-and-initiatives-as-asean-chair-2020—challenges-of-and-response-to-the-covid-19-pandemic/446014.html.
[19] VGP, “Preliminary Outcomes Of Three-year Implementation Of Resolution On Climate-resilient development Of Mekong Delta”, 13March 2021, http://news.chinhphu.vn/Home/Preliminary-Outcomes-Of-Threeyear-Implementation-Of-Resolution-On-Climateresilient-development-Of-Mekong-Delta/20213/43202.vgp
[20] “WBG Country Partnership Framework for Vietnam 2018 – 2022: Key Priorities”, World Bank, 5 July 2017, https://www.worldbank.org/en/news/infographic/2017/07/05/wbg-country-partnership-framework-for-vietnam-2018-2022-key-priorities.
[21] World Bank, “Investment Project Financing (IPF)”, worldbank.org/en/what-we-do/products-and-services/financing-instruments/investment-project-financing.
[22] Vietnam Investment Review, “Vietnam-Netherlands Issue Joint Statement”, 9 April 2019, https://vir.com.vn/vietnam-netherlands-issue-joint-statement-66987.html.
[23] Ousmane Dione, “Mekong Delta Conference”, World Bank, 19 June 2019, https://www.worldbank.org/en/news/speech/2019/06/19/mekong-delta-conference.
[24] VGP, “Preliminary Outcomes Of Three-year Implementation”.
[25] Vu and Mayer, “Hydropower infrastructure and regional order making in the Sub-Mekong region”.
[26] Shafiqul Islam and Lawrence Susskind, “Using Complexity Science and Negotiation Theory to Resolve Boundary-Crossing Water Issues, Journal of Hydrology 562 (2018): 589-598.
[27] ibid.
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EXECUTIVE SUMMARY
- The worst wave of Covid-19 infections to hit Vietnam since late April has threatened to chip away at the hard-earned public trust the government was able to engender last year. That is a major concern for a regime that relies on public support and patriotic nationalism to boost its legitimacy.
- As Vietnam’s pandemic response plunged from shining example to cautionary tale, officials experienced public backlash for resting on their laurels, chief among which was their perceived over-confidence in pursuing a strategy of containment over vaccination to suppress the spread of the coronavirus.
- Findings from an analysis of public responses in cyberspace showed that public criticism of the government’s pandemic response has generally dwarfed public support, with the gap widening significantly in August and September 2021, when Covid-19 caseloads and deaths peaked.
- The government has attempted to win back public trust through three key efforts: its vaccine rollout, its provision of social safety nets and its public messaging. Even though Vietnam’s vaccine rollout started slowly, it is the only area where the public has expressed more sympathy and support for the government. In contrast, the government drew most public ire for its social safety nets.
* Dien Nguyen An Luong is Visiting Fellow with the Media, Technology and Society Programme at ISEAS – Yusof Ishak Institute. A journalist with significant experience as managing editor at Vietnam’s top newsrooms, his work has appeared in the New York Times, the Washington Post, the Guardian, South China Morning Post, and other publications. The author would like to thank Ms Lee Sue-Ann and Dr Le Hong Hiep for their constructive comments and suggestions.
ISEAS Perspective 2021/151, 18 November 2021
INTRODUCTION
On the night of 30 September 2021, right after Ho Chi Minh City relaxed its pandemic lockdowns, thousands of migrant workers fled the economic hub in droves. The city had been the epicentre of Vietnam’s most severe coronavirus outbreak and the exodus took place against the backdrop of the authorities urging the workers to stay put while promising to find jobs for them.[1] Earlier in late August, when the Ho Chi Minh City administration announced plans to bar residents from leaving their homes and reassured them that the food supply would be sufficient, the public did not appear to buy into it. Panic buying ensued, and endless queues of people formed at supermarkets and food items flew off the shelves.[2] These were instances of public skepticism about the government’s pandemic messaging.
They stood in stark contrast to the exceptional public support and compliance the government had enjoyed in dealing with the coronavirus outbreak last year.[3] According to the Covid-19 behaviour tracker compiled by YouGov, a British data analytics firm, and Imperial College London, nearly 97 per cent of Vietnamese polled between May and July of 2020 said the government was handling the crisis “very” or “somewhat” well.[4] However, since the worst wave of Covid-19 infections hit Vietnam in April 2021, public confidence in the government has dropped. Latest data from the same YouGov survey found that by early May 2021, about 83 per cent of Vietnamese polled said they trusted the government’s pandemic handling, a decrease of 14 percentage points. While this figure was still well above that of comparable data in Southeast Asia, it marked a 10-month low in Vietnam.
This paper addresses these following questions: How much of a bearing has the latest outbreak had on public trust in Vietnam’s Covid handling? How have Vietnamese authorities addressed recent public grievances? What observations can we make of the Vietnamese government’s efforts to reverse waning public confidence in its pandemic response?
WHAT CHIPS AWAY AT PUBLIC CONFIDENCE?
Until late April 2021, Vietnam had maintained one of the world’s lowest coronavirus infection rates, having logged fewer than 3,000 cases and suffering just 35 deaths.[5] But that has since skyrocketed to over one million cases and around 23,200 deaths as of this writing.[6] Ho Chi Minh City, Vietnam’s economic hub, accounted for half of the infections and 80 per cent of fatalities in the country.[7]
Vietnam’s pandemic response plunged from being a shining example to being a cautionary tale. Like several other countries that have become a victim of their own success, Vietnam was facing a triple threat: It reined in the pandemic so well that it had little natural immunity;[8] its access to vaccines was limited, for various reasons;[9] and, it was besieged by the deadlier and more transmissible Delta variant.[10]
There were several factors that were beyond the government’s control. Chief among them: Rich countries were hoarding vaccines.[11] India, a major vaccine maker, stopped exports in March to tackle its own Covid-19 crisis.[12] In Southeast Asia, Vietnam had expressed no interest in purchasing Chinese vaccines until June.[13] Unlike wealthier countries, Vietnam was short of the money or negotiating muscle when working with vaccine companies to ensure promised deals would be kept fast enough.[14]
Vietnamese officials also drew public criticism for resting on their laurels. In November 2020, Deputy Prime Minister Vu Duc Dam, then head of the Covid-19 task force, said that the country would stick to its strategy of containing the virus rather than jostle for supplies of vaccines that could turn out to be “financially risky.”[15] The authorities may have had high hopes in Vietnam’s four homegrown shots carried out in a bid to avert reliance on imported vaccines and to bolster the country’s international credentials.[16] Several critics pointed out that Vietnam’s leaders had squandered several months on the political transition instead of hammering out a feasible vaccine strategy.[17]
It was actually not until June that Vietnam expedited efforts to secure foreign vaccines, a belated move that placed it far back in the queue.[18] The vaccine shortages compelled the authorities to rely on lockdowns to suppress the spread of the virus. In July, authorities started imposing strict pandemic curbs, particularly in Ho Chi Minh City. Protracted lockdowns, however, have exacted a heavy economic and mental toll on the public, leaving tens of thousands jobless and hungry.[19] In late September, Vietnam’s gross domestic product plummeted 6.17 percent on year for the July-September period, the first quarterly decline since 2000.[20]
To gauge public responses in cyberspace, this ISEAS research programme conducted in-depth content analysis of Vietnam’s vaccine rollout, social safety nets and public communications messaging (Appendixes 1,2,3,4) and analysed discussions about them from 1 May 1 to 31 October 2021. The methodology involves gleaning the most significant and distinctive keywords that typified pro-government and anti-government narratives from over a thousand posts and their comments on online forums, Facebook, YouTube, and TikTok. (Facebook and YouTube have remained the leading social media platforms in Vietnam while TikTok is increasingly popular among Generation Z there.) These keywords are subsequently fed into social media listening frameworks to generate granular comparative sentiment analysis graphs, depicting Vietnamese netizens’ responses to the various aspects of the government’s pandemic management.
PUBLIC SENTIMENT ON THE GOVERNMENT’S HANDLING OF THE PANDEMIC
Overall, public criticism dwarfed public support during the corresponding period. The gap widened significantly in August and September, when Covid caseloads and deaths peaked (Figure 1). That was the period of drawn-out lockdowns. In September, Ho Chi Minh City recorded one of the highest death rates in Southeast Asia.[21]
As Figure 1 shows, public support peaked on June 4, when the dominant narrative of the supportive camp focused on expressing confidence that Vietnam would be able to beat the latest wave and achieve its dual goal of pandemic control and economic growth.[22] But interestingly, an almost equal level of public criticism was also registered a day earlier. Internet users lamented that the authorities should have done more to prevent a surge by curtailing travel during the long holidays in late April and early May, when infections began edging up.[23] Criticism peaked on September 8 over the perceived government’s incompetency in handling the pandemic that led to surging numbers, hospital overload and mass unemployment. Public criticism has been on the downward trend since Vietnam partially reopened in October.
Public sentiments online in both camps each revolved around the following key messages:
| Public Support | Public Criticism |
| Given its past success and the national solidarity, Vietnam will soon beat the latest wave of Covid-19 infections. The quiet sacrifice of frontline workers, doctors and healthcare staff in particular, in the fight against the pandemic is immeasurable. The government has left no stone unturned to contain the latest wave. | In suppressing the chain of transmission, the Vietnamese government should not have prized the containment strategy over securing vaccine supplies. The “no-one-is-left-behind” pledge by the authorities is ringing hollow. Last year, the government was transparent on the number of Covid caseloads and deaths as well as its ability to deliver on the lockdown promises. That was no longer the case during this latest wave. |
PUBLIC SENTIMENTS ON SPECIFIC ASPECTS OF VIETNAM’S PANDEMIC RESPONES
This section sheds light on how the public reacted to three aspects of the Vietnamese government’s pandemic response, namely vaccine rollout, social safety nets and public messaging.
Vaccine rollout
Despite the slowness of Vietnam’s vaccine rollout, online criticism of the government’s handling of this issue was surprisingly low. Public support reached its peak early on June 4, with the dominant narratives centering on the strong willingness of Vietnamese to get a vaccine shot in order for Vietnam to achieve herd immunity as soon as possible. The late May–early June period was also when the government launched a fund to secure much-needed doses of coronavirus vaccines.[24] The public heeded the call, and donations began pouring in.[25]
Significantly, the strong levels of public support do not appear to have been strongly amplified by the possible involvement of pro-government cyber troops and public opinion shapers.[26] Figures 2 and 2B show comparative charts for levels of public support of Vietnam’s vaccine rollout, and when data from pro-government Facebook pages (see Appendix 5) were included and when they were excluded. The overall result was more or less the same; the levels of public support were only marginally lower when data from pro-government Facebook pages were excluded (Figure 2B). This strongly suggests that public support of the government’s vaccine rollout was likely organic and not significantly orchestrated.
Also of interest are the trends in public sentiments towards Vietnam’s decision to procure Chinese vaccines. In July, the Ministry of Health licensed Van Thinh Phat, a local company, to import five million doses of Sinopharm’s Vero Cell vaccines to address Vietnam’s acute vaccine shortfall.[27] The move initially triggered some public resistance both on social media and in real life.[28] As seen in Figure 2, there were sharp spikes in public criticism between late July and late August, with the dominant narratives revolving around the rejection of Chinese vaccines. But between late August and September, these had dropped significantly, incidentally coinciding with surging cases across southern Vietnam and the growing salience of the government’s narrative that “the best vaccine is the first one you have.”
That message apparently resonated with the public in a country where, according to another YouGov survey[29], 89 per cent of Vietnamese polled between July and September said they would be willing to take a Covid-19 shot. It was during this period that public sentiments online started to shift to this narrative: getting a Covid shot in order to go back to normal life is preferable to getting stuck in lockdown indefinitely. Chinese jabs have since been administered on a voluntary basis across southern Vietnam without any major hiccups. Vietnam’s recent go-ahead for the purchase of another 20 million doses of Vero Cell shots did not trigger any major backlash in the online sphere.[30]
Social safety nets
The Vietnamese government attracted more – if not most – public criticism over support for its Covid-19 social safety nets (Figure 3). Internet users on the supportive and critical camps coalesced around a “master narrative”, each consisting of three key messages:
| Public Support | Public Criticism |
| We’re all in this together so instead of venting, let’s join hands to help those who are more vulnerable. The government will not leave the people in the lurch during the pandemic. The deployment of soldiers to deliver food and aid to households is a necessary and timely move. | The authorities, especially those at local levels, have delivered poorly on their financial aid pledges. Hunger and unemployment will kill people before Covid does. This latest wave of infections has laid bare the incompetence of the political apparatus. |
On the issue of the Vietnamese government’s rollout of social safety nets, during the early stage of the latest wave (between early May and mid July), public support was equal to or even greater than critical voices. Public support was at its highest on July 2, when online discussion zeroed in on the call to join hands with the government to push back the coronavirus. But public criticism started to eclipse public support in early August; the sharpest spike occurred from later that month to mid-September. Public criticism peaked on September 8, when Internet users vented their grievances mostly against unemployment and bankruptcy. During the late August-mid September period, social media was also inundated with complaints about how hospitals and quarantine centres came under great pressure and how the authorities were slow to respond to calls for help.[31]
Public grievances stemmed largely from the slow disbursement of a government stimulus package totalling VND26 trillion (US$1.1 billion) designed to support informal workers and poor households.[32] At live broadcasts of questions from the public to Ho Chi Minh City officials, nerves were evidently on edge as disgruntled citizens repeatedly clamoured for their overdue financial aids.[33] A survey in August by VnExpress, which brands itself as “the most read online Vietnamese newspaper”, found that of around 69,000 people polled, 62 per cent said they lost their jobs because of the pandemic; many of them became unemployed for more than six months.[34]
The deployment of soldiers to enforce a stricter lockdown in Ho Chi Minh City in late August also failed to allay public worries.[35] The mainstream media ramped up the message that the core task of the troops, besides patrolling the streets or standing guard at posts, was to deliver food and aid to households.[36] But with Ho Chi Minh City already crippled by a shortage of delivery workers, the troops were soon snowed under with orders of essential goods, food in particular.[37] A looming food delivery crisis unnerved the public and caused a relentless furore online, forcing the authorities to allow professional shippers back to the delivery rollout just several days after having boots on the ground.[38]
The government dialed up its “no-one-is-left-behind” rhetoric particularly between late August and mid-September (Chart 1). But as Figure 3 shows, that was also the peak time when scores of Internet users lamented that they were waiting in vain for official support.
Public messaging
This is also an area where the government fell short of public expectations, drawing more criticism than support (Figure 4). The “master narrative” circulated by Internet users in both camps each consisted of three key messages:
| Public Support | Public Criticism |
| Government leaders, the prime minister in particular, have made great outreach efforts to allay public concern about the pandemic. Contact-tracing apps are much needed to help break the chain of transmission. Media stories about national solidarity and philanthropy are much needed during these trying times. | • In getting their messages across, the authorities failed to be first, right and credible. Mixed messaging, delays and confusion have been colouring people’s daily life during the pandemic. • The rollout of a raft of contact-tracing apps without integrating their databases only created myriad hassles for their users. • The implementation of central guidelines on pandemic controls has been subject to conflicting interpretations and dogged by red tape across provinces. |
Similar to the Covid social safety nets, the government, as based on Figure 4, enjoyed public support for its messaging during the early stage of the latest outbreak from early May until mid-July. But there was a marked crossover in public sentiments around early August, when public criticism started to dwarf public support. The sharpest spike in public criticism occurred from late August to late September. The public was growing increasingly skeptical of what it perceived to be a sanitised narrative of the crisis. As cases continued surging, the number of Covid deaths rarely made headlines in mainstream media until October. When news outlets kept a tally of daily infections, the number of deaths was placed at the bottom. In an attempt to inject “positive energy” into the public discourse, state-controlled media was ordered to publish feel-good stories related to the pandemic. Against that backdrop, chat groups and social media buzzed with clips and posts that claimed to reveal how the plan to deal with the pandemic was unraveling.
The lack of transparency, consistency and credibility in communication was another major source of public frustration. When it came to lifting pandemic curbs, public hopes had been dashed too many times as the authorities kept backpedaling on their oft-repeated “the-new-normal” promises (Chart 2).[39]
As Figure 4 shows, the public was most dismal on September 30, one day ahead of the reopening phase. The complaints centred around a lack of a well-coordinated national effort to articulate and enforce the government strategy on living with Covid-19[40] and the concern about data privacy in a slew of contact-tracing apps.[41] Public criticism declined, however, after the country reopened in October. Since then, public support has also gained momentum and hit its peak on October 19, when Internet users acknowledged that they had started to receive more “useful information” on how to go about their daily lives in the reopening phase.
CRUNCH TIME
Judging by public sentiments online, even though the vaccine rollout went off to a slow start, it has been the only area where the public has expressed more sympathy for the authorities than criticism. The government drew most public ire for its Covid social safety nets.Unlike during previous waves, the government’s public communications have also fallen short of expectations this time around.
It was oversimplistic at best for Western media to accredit Vietnam’s relative pandemic success last year squarely to its authoritarian rule and the “draconian” measures designed to rein in the coronavirus.[42] In fact, it was the uncharacteristically transparent governance and effective messaging [43] that earned the public’s approval and proved instrumental to securing their compliance.
But as our analysis has showed, the levels of public support for the government’s pandemic response have generally plummeted. For the Vietnamese government, vaccination rollout aside, how to fortify the social safety nets and to fine-tune its public messaging will remain the top challenges in regaining public trust.
APPENDIX 1. Public Sentiments Online on Vietnam’s Pandemic Response
| Keywords on Public Support | Keywords on Public Criticism |
| Việt Nam cố lên (Vietnam fighting) áo trắng đáng yêu (lovable white coat) Việt Nam vô địch (Vietnam the champion) miền nam cố lên (Southern Vietnam fighting) Việt Nam chiến thắng đại dịch (Vietnam beats the pandemic) chúng ta đẩy lùi covid (We push back Covid-19) lực lượng tuyến đầu không mệt mỏi (untiring frontline forces) cám ơn chiến sĩ (thank you, soldiers) anh hùng áo trắng (white coat heroes) chúng ta là Việt Nam (We are Vietnam) anh chị em tuyến đầu (frontline brothers and sisters) nhìn thương muốn khóc (crying seeking frontline forces working so hard) yên tâm cách ly (rest assured to quarantine) có trách nhiệm với xã hội (socially responsible) tội nghiệp cảnh sát không được về nhà (feel bad for the police officers who cannot go home) thương cán bộ (feel bad for the officers) thương hậu phương (appreciate logistic forces) tự hào tiêm vaccine trung quốc (proud of getting Chinese vaccines) tiêm đã lắm (vaccination is great) hiểu biết thì tiêm vaccine trung quốc (getting Chinese vaccines is wise) tiêm dịch vụ vài trăm ngàn cũng tiêm (happy to pay for serviced vaccination) mong triển khai nhanh (look forward to fast vaccination) nhanh lên nhé dân cố chờ (please speed up, the people are waiting) VN không bỏ rơi một ai (Vietnam does not leave anyone behind) may mắn sinh ra ở Việt Nam (blessed to be born in Vietnam) tiêm mũi 1 tiếp mới tiêm mũi 2 nhanh (second shot will soon follow first shot) tiêm không cần giấy mời (getting vaccinated without any invite) tiêm gấp để hạn chế lây nhiễm (speed up the vaccination to limit transmission) nhìn bác Đam bạc tóc thương quá (feel bad seeing Mr. Dam’s greying hair) một mình bác sao làm được (Mr. Dam alone cannot do anything) ủng hộ lời kêu gọi chính phủ (support the government’s call) cám ơn lãnh đạo gần dân (appreciate the government for being sympathetic to the public) được 1.200k (get 1.200k) nhận gạo thức ăn thịt mì (receive rice, food, mean and bread) nhân được 800k (get 800k) nhâận được rồi cám ơn chính phủ (received, grateful to the government) chính phủ gồng mình vắt óc (the government works really hard) chống dịch hiệu quả (effective pandemic fighting) chính sách có 100% (the policy delivers 100%) phải tin vào lãnh đạo (must have faith in the leaders) bác Chính xuống làm việc (Prime Minister Chính pays a site visit) 5 ngày phát gạo 1 lần (give away the rice once in five days) nhà nước đâu bỏ dân (the state doesn’t abandon the people) hy sinh lợi ích nhỏ vì cộng đồng (sacrifice small personal interests for public interests) đăng ký là tuần sau được nhận (register and receive financial aids next week) nhiều người chửi nhà nước dữ quá (too many people criticize the government) nặng tình nghĩa (compassionate) quân đội cho quà (the troops deliver gifts) biết cảm ơn và trân trọng (appreciated and grateful) tổ trưởng tốt dân được hưởng (a good neighborhood chief benefits the community) nhân dân đồng hành cùng chính quyền (the people rally behind the government) chỉ có chính phủ Việt Nam mới cứu được dân (only the Vietnamese government can save the people) thủ tướng tuyệt vời đi vào lòng dân (kudos to the prime minister for wining public hearts and minds) nhà nước sao kèm hết từng người được (the state cannot cater to every single person) Quyết định thủ tướng tuyệt vời (a wonderful decision by the prime minister) ủng hộ thống nhất app (support the integration of contact-tracing apps) lãnh đạo ngày càng dùng công nghệ (leaders go increasingly tech-savvy) quyết định thủ tướng đúng đắn (a right decision by the prime minster) tổ chống dịch + vất vả (laborious pandemic task force) cám ơn chính phủ VN (thank you, the Vietnamese government) bệnh viện dã chiến + giải thể (disband makeshift hospitals) cảm ơn y bác sĩ (thank you, doctors and nurses) bệnh viện + ế (hospitals with few patients) chính phủ ưu tiên vaccine (the government prioritizes the vaccination drive) mùa dịch ai cũng khó khăn riêng (everyone has their own troubles during the pandemic) mong lực lượng chi viện sớm thất nghiệp (wishing for the recruitments to be disbanded soon) tuyến đầu quá mệt mỏi (frontline forces are exhausted) tiêm vaccine nhiều (ramp-up vaccinations) phường chu đáo (caring ward officials) phường nhắn tin gọi điện liên tục (ward officials keep texting and calling) họ kêu dân đi tiêm quá trời (officials urge the people to get vaccinated) mũi 2 vero cell chích dễ (easy to get the 2nd shot of Vero cell) tự hào công dân Việt Nam (proud to be a Vietnamese citizen) vì dân vì nước (for the people, for the country) phạt nặng người thiếu ý thức (throw the book at those who are not compliant) nên nhốt lại (lock them up) cám ơn phó thủ tướng (thank you, deputy prime minister) người Việt Nam đoàn kết (the Vietnamese are unified) có tâm có tầm (visionary) ủng hộ bác Đam (support Mr. Dam) lương y như từ mẫu (doctors are like mothers) người dân mang ơn (the people are grateful) tổng đài rất nhanh (call centers are very responsive) phải kiểm soát dịch mới mở cửa (only reopen when the pandemic is contained) yên tâm nhà nước sẽ chăm lo (rest assured that the state will take care of you) chu đáo và chuyên nghiệp (considerate and professional) giúp đỡ cưu mang người dân (a helping hand to those in need) hỗ trợ bà con kịp thời hiệu quả (timely and effective support for the people) cảm ơn anh em chiến sĩ (thank you, soldiers) cám ơn ban lãnh đạo các cấp (thank you, leaders at all levels) đừng nói tỉnh làm khó dễ (don’t blame local leaders) địa phương phối hợp tốt (local provinces coordinate well) không ở đừng nói lời cay đắng (don’t badmouth quarantine centers) Chặt chẽ không biết dịch lây như thế nào (such lockdown efforts will help break the chain of transmission) nỗ lực của cả tỉnh (efforts of the entire province) vui vẻ vì thành quả (proud of the accomplishment) giá như địa phương nào cũng làm căng (if only every province were that strict) tỉnh nào làm tốt mở cửa sớm (provinces who contain the pandemic well should reopen soon) HN và TPHCM khó hơn nhiều (Hanoi and Ho Chi Minh City are in worse situations) làm tốt không thể không nhắc hà nội (Hanoi has done great) lãnh đạo tỉnh làm rất quyết liệt (local leaders are very hell-bent on containing the pandemic) thà chịu đựng 15 ngày (rather under lockdown for 15 days) không chủ quan (no complacency) ngoại giao thông minh (smart vaccine diplomacy) mạnh dạn nhập vaccine Trung Quốc (not balked at importing Chinese vaccines) cư xử với dân ôn hòa (treat the people kindly) góp ý phê bình nên nhẹ nhàng (criticism should be constructive) Quân tử khắt khe với bản than (you should be tough on yourself first) Mời mấy ông lên làm thủ tướng (dare you to be the prime minister) Nhà nước gồng mình chống dịch (the government stretches it thin to fight the pandemic) chuyên gia bới móc chê trách (armchair critics) Hy vọng vaccine Việt Nam (hope in Vietnamese vaccines) Chậm nhưng mà chắc (slowly but steadily) Who chấp nhận thì người dân tiêm (If WHO approves, let the people get the vaccine) muốn dc tiêm thuốc của VN (want to get Vietnamese vaccines) Nanocovax number one (Nanocovax is number one) tin tưởng vn (believe in Vietnam) sẵn sàng tiêm (willing to get Covid-19 shots) Cám ơn sự Quan Tâm của Chính phủ (thank you the government for your care and support) nhiệt tình chuyển lương thực (eagerly deliver food) TRẬN ĐÁNH CUỐI CÙNG (the last battle) thủ tướng vất vả (the prime minister is restless) thủ tướng nói rất hay (the prime minister speaks eloquently) hơn hẳn thủ tướng trước (the prime minister outshines its predecessor) cảm phục phó thủ tướng (admire the deputy prime minister) thủ tướng nghiêm khắc (the prime minister is very tough) hoan hô thủ tướng (bravo the prime minister) thủ tướng giỏi quá (the prime minister did great) tin yêu thủ tướng (believe in the prime minister) thấu hiểu tâm tư nguyện vọng (understanding the public) họp trực tuyến rất hay (teleconference is great) bác chính quyết đoán (Prime Minister Chinh is tenacious) tự hào Việt Nam (proud Vietnam) toàn dân quyết tâm chống dịch (the entire society is determined to fight the pandemic) yêu các chú bộ đội (love the soldiers) cố lên các chú bộ đội (the soldiers fighting) Hậu duệ mặt trời phiên bản Việt Nam (Descendants of the Sun, Vietnam version) Chúc các chiến sĩ khoẻ mạnh (all the best to the soldiers) y tế Việt Nam AND tuyệt vời (Vietnamese healthcare is wonderful) Vũ Đức Đam AND người hùng (Vu Duc Dam is a hero) hy sinh thầm lặng (quiet sacrifice) bộ đội đi chợ hộ (the troops go to buy food for the people) trách nhiệm của người lính (the responsibility of the soldiers) thương các chiến sĩ (love the soldiers) chiến sĩ vất vả (the soldiers are hardworking) quân đội chống dịch AND tổ quốc trong tim (the troops fight the pandemic and the fatherland is in the heart) | cho ăn lễ giờ ra nông nỗi (pay the price for the long holiday) không làm đúng dân chửi (incur the public wrath for failing to do their job properly) làm như lo cho dân lắm (as if they cared much about the people) chỉ thấy toàn thị uy (the officials just show off) không a dua theo đám đông là bị quy chụp (get pigeonholed for not following the pack) còn gì độc lập tự do (independence freedom no more) chính quyền sợ dân túng làm loạn (the government worries that desperate people will rise) ra quân để phạt người dân (deploy the fore just to fine people) đủ ăn đủ uống không ai ra đường (who cares to go out if they have enough food) sao không ra giữ biển đảo (why not send the troops to protect the islands?) toàn màu mè (just grandstanding) khí thế chứ dân chết đói (the people are starving despite the official grandstanding) dân đang đói sao không chở gạo cho dân (why not transport the rice to the starving people) nổ quá trời mà không ra vaccine (all talk, no vaccine) chích vaccine chen chúc (jostle to get vaccinated) thua từ chính quyền đến người dân (a failure from top to bottom) không phân chia vùng chích (no desgination of vaccinated areas) tiêm lây chéo (cross-infections because of vaccinations) chính quyền làm ăn tệ (the authorities do a bad job) tổ chức quản lý yếu kém (poor governance) cái gì cũng tại dân (blame the people for everything) quá nhiều bất cập (too much red tape) không thông báo rõ rang (lack of information) yếu kém từ khâu tổ chức (poorly organized) đông không dám vô tiêm (balked at overcrowded vaccination sites) vaccine ông ngoại (nepotism vaccine) cán bộ không tiêm loại nào tôi không tiêm loại đó ( I won’t get the vaccines the officials refuse) không có xu nào (not a penny) không ai hỗ trợ (no official support) làm để đối phó (half-baked measure) nhận trên tiktok (receive the aid on TikTok) nhận trên facebook (receive the aid on Facebook) nhận trên tv (receive the aid on TV) lấy được tiền trời sập (the sky would collapse if I could receive the aid) thất nghiệp x tháng rồi (unemployed for xxx months) chính phủ sao kê tiền hỗ trợ (demand an accounting of the government aid package) thủ tướng ngồi trong máy lạnh (the prime minister only sits in air-conditioned room) Chỉ thị 16 thảm bại kinh tế (Directive 16 is an economic debacle) không có thống nhất giữa tỉnh (no consistency among provinces) 63 khu tự trị (63 self-governed zones) chính phủ xem lại cách làm việc (the government needs to self-correct its governance) dân chết đói vì không đi làm (the people starve to death because of unemployement) trên nói nghe để đó (government directions fall on deaf ears) chính quyền phải nói thật với người dân (the authorities need to be transparent with the people) bình mới rượu cũ (new bottle old wine) không coi chính phủ ra gì (disdain the government) giãn cách ngân hàng vẫn lấy lãi (still collect bank interests during lockdown) mã ứng dụng lỗi (faulty QR code) nhiều app quá (too many contact-tracing apps) rủi ro lộ thông tin cá nhân (risk of personal data leak) hỗ trợ không thấy đâu (no sight of financial aid packages) không nhắc lực lượng tuyến đầu (no sight of frontline forces) không thấy giúp cho người ở trọ (no support for tenants) chỉ giúp người có hộ khẩu (support for those with family registers only) sao số ca tăng hoài (why do caseloads keep rising) thống kê có trục trặc (problematic statistics) càng phong tỏa càng nhiều (the more lockdowns, the more caseloads) giấu thông tin (information cover-up) bao nhiêu chỉ thị 16 (too many directives) khi nào hết dịch (when will the pandemic end?) đi chích vaccine về bị (get infected after vaccination) hô hào thì giỏi (no action, talk only) chưa được tiêm vaccine (not vaccinated yet) không thấy tiêm mũi 2 (not get 2nd shot yet) học online nguy hiểm (online learning is dangerous) covid chưa chết nhưng đói thì chết (hunger will kill people before covid does) miền tây + khổ chồng khổ (no end in sight in misery for Mekong Delta people) con số không còn giá trị (the statistics has no value) không có gói hỗ trợ doanh nghiệp tư nhân (no aid package for private businesses) doanh nghiệp + đóng băng 2 năm (businesses have been frozen for two years) tự kiếm kế sinh nhai (fend for themselves) buôn bán ế ẩm (slow business) giá mặt bằng cao (high rents) chi phí sao chịu nổi (unbearable costs) chờ mãi không thấy y tế (waiting in vain for healthcare staff) không thấy ai tới test (no one comes to do test) gọi không ai phản hồi (no one returns calls for help) suốt ngày đếm F0 (keep counting FO cases all day) vaccine + sợ bị làm khó dễ (vaccination red tape) người giàu được lãnh người nghèo thì không (financial aids for the rich only) tổ trưởng kêu đợi (the neighborhood chief asks to wait) mùa covid kiếp sau (wait until the next Covid wave next life to get financial aids) trợ cấp + hi vọng mong manh (dim hope for financial aids) không có 1 xu (not a penny) làm ăn rườm rà hơi lâu (drag foot on red tape) xx tháng không có 1 đồng (many months without a penny) sót nhiều lắm (left out too many) báo đài không nói rõ (the media didn’t articulate well) mỗi người nói một kiểu (contradicting messages) nhà nước thông não cấp dưới giùm (the government needs to rein in local leaders) tổ trưởng chẳng làm được gì (neighborhood chiefs are hopeless) app sai không chỉnh sửa (not fixing faulty contact-tracing apps) test covid là nguồn thu quốc gia (Covid tests contribute to state revenue) ăn không nổi khô khủng khiếp (the food is too dry to eat) của nhà nước làm gì mà ngon (cannot expect the food to be good because it’s state sponsored) không còn lựa chọn (no option) Lãnh đạo nói ai dám chống (who dares to defy official directives) nếu không hết dịch mời từ chức (please step down if the pandemic is not controlled) không thấy trợ cấp mà cứ kéo dài (no subsidy despite drawn-out lockdowns) Người dân không có tiếng nói (the people have no voice) Mấy chục lần 2 tuần (how many times “two more weeks”?) nói thì giỏi làm thì dở (no action, talk only) giả mù giả điếc (turn a blind eye) tiêm 2 mũi mà vẫn phải cách ly tốn phí (still have to quarantine despite being fully vaccinated) có dịch là mất quyền công dân (stripped of citizen rights because of the pandemic) cách ly rồi lây chéo (cross-infections because of quarantine) thủ tướng yêu cầu nhưng về địa phương lại khác (local leaders contradict the prime minister directive) cấp cao cần kiểm tra lại (central leaders need to double check their local subordinates) đừng thấy đỏ mà tưởng là chin (don’t count the chickens before they are hatched) đánh úp người dân (caught the people off-guard) hứa thật nhiều thất hứa thật nhiều (too much lip service) bảo fake news hóa ra real (fake news turns out to be real) siết quá trời siết (too strict lockdowns) làm ơn để shipper chạy liên quận (please let professional shippers deliver across districts) giá đội trên trời (prices go through the roof) không có shipper (no shipper) đặt giá app quá cao (app order is too expensive) không ai nhận đơn (no one takes orders) bị hủy đơn (order canceled) ứng dụng quá tệ (contact-tracing apps suck) dẹp giùm + app (scrap the contact-tracing apps) trung ương không bảo được địa phương (the central leaders unable to rein in local officials) baất tài của lãnh đạo (incompetent leaders) phép vua thua lệ làng (the mandate of the emperor stops at the village gate) cắt chức ông Nên ông Mãi (fire the top leaders of Ho Chi Minh City) tỉnh không cần biết bộ y tế (provinces just disregard Minsitry of Health) lãnh đạo thành phố quá yếu kém (city leaders are too incompentent) phong tỏa mãi số ca y chang (never-ending lockdowns but caseloads remain) đẩy shipper vào nguy hiểm (put shippers in danger) trạm y tế lưu động không hoạt động (mobile health stations not operate) có ca nhiễm vẫn nói kiểm soát (too many cases but officials still claim under control) giấu như mèo giấu cứt (cover up) quốc gia giấy tờ thủ tục (nation of red tape) cường quốc khai báo y tế (superpower of health declaration) làm chỉ được khúc đầu (half-baked efforts) giấy này thẻ kia làm khổ dân (too much red tape take a toll on the people) chống dịch trên tivi (fight the pandemic on TV) xử lý thiếu tình người (inhuman handling) phạt công ty đừng phạt shipper (fine the companies, not shippers) đi bộ về quê (walk to the hometowns) phản biện thành phản động (those who criticize the government are deemed reactionaries) chọt mũi thần tốc (fast swab tests) trong cái khó ló cái ngu (stupidity knows no border) làm dân hoang mang (confuse the public) loạn cào cào (too chaotic) quay dân như chong chóng (leave the people scratching their heads) baáo chí mỗi người một phách (the media conveys contradicting messages) không hiểu nổi chính sách (cannot understand the policy) chừng nào tiêm trẻ em (when will children get vaccinated) không thể miễn dịch cộng đồng (no herd immunity) vaccine tốt nhất là vaccine mà lãnh đạo chích (the best vaccines are those the leaders get) WHO đã ko còn giá trị (WHO is doomed) không dùng hàng tàu (no Chinese product) WHO của china (WHO is in China’s bag) Who bị tàu cộng mua chuộc (WHO is bought by China) thủ tục hành là chính (red tape) ko 1 đồng (not a penny) ko 1 kg gạo (not one kilogram of rice) xuống âm phủ mới nhận (go to hell to get financial aids) đừng tin những gì họ nói (don’t believe in what they say) ăn chặn (siphone off) Toàn báo cáo (just reports) người nhà người quen (nepotism) gói cứu trợ mồm (financial aid pacakges on paper) ko tới tay dân (did not reach the people) rớt nhiều vào túi những người ra quyết định (only those who make decisions benefit) chậm trễ (delay) ngồi phòng lạnh ra quyết định (decisions made from air-conditioned rooms) chỉ đạo lúng túng (confusing directives) chạy theo tình hình (knee jerk) thủ tướng thôi chức (prime minister, resign) bó tay lãnh đạo (hopeless leaders) dân khổ quá rồi (the people are too miserable) dân chết đói hết rồi (the people are starving) hết lương thực (run out of food) lấy gì mà sống (how can I survive) mệt mỏi lắm rồi (public patience wears thin) dân còn khổ dài dài (never-ending misery for the people) dân lãnh hết (the people bear the brunt) cầm cự không nổi nữa (can’t stand it anymore) mất việc (unemployed) phải trả nợ ngân hàng (bank debt) phải trả lãi ngân hang (bank interests) phá sản (bankruptcy) chủ quan (complacency) ngạo nghễ (too much pride) lúng túng (bungling) lơ là (lack of vigilance) y ếu kém (incompetence) tốn kém (waste) luẩn quẩn (vicious cycle) không hiệu quả (inefficient) không ai chống dịch giống Việt Nam (no country controls the pandemic like Vietnam) phản khoa học (unscientific) phong toả cực đoan (extreme lockdowns) hết chỉ thị này đến chỉ thị khác (directive after directive) số ca vẫn tang (caseloads keep rising) số ca không giảm (no letup of cases) hết giường bệnh (run out of hospital beds) bệnh viện không nhận (hospitals refuse to admit) trợ cấp trên mạng (financial aids online) mị dân (demagogic) diễn sâu (showmanship) _ giao hàng chậm (slow delivery) thua xa shipper công nghệ (the soldiers are way behind professional shippers) quá tải (overload) không chịu rút kinh nghiệm (fail to draw experience) quá muộn rồi (too late) tin đồn vài ngày nữa thành sự thật (rumors become true after several days) không tiêm vaccine Trung Quốc (say no to Chinese vaccines) dân chết đói hết rồi (the people were starved to death already) |
APPENDIX 2. Public Sentiments Online on Vietnam’s Vaccine Rollout
| Keywords on Public Support | Keywords on Public Criticism |
| tự hào tiêm vaccine trung quốc (proud) tiêm đã lắm (vaccination is great) hiểu biết thì tiêm vaccine trung quốc (getting Chinese vaccines is wise) tiêm dịch vụ vài trăm ngàn cũng tiêm (happy to pay for serviced vaccination) mong triển khai nhanh (look forward to ramped-up vaccination nhanh lên nhé dân cố chờ (please speed up the vaccination as the people are waiting) may mắn sinh ra ở Việt Nam (blessed to be born in Vietnam) tiêm mũi 1 tiếp mới tiêm mũi 2 nhanh (the 2nd shot will soon follow the first one) tiêm không cần giấy mời (getting vaccinated without any invite) tiêm gấp để hạn chế lây nhiễm (getting vaccinated urgently to limit infections) chính phủ ưu tiên vaccine (the government prioritises vaccination) tiêm vaccine nhiều (ample vaccine supplies) họ kêu dân đi tiêm quá trời (the officials repeatedly urge the people to get vaccinated) mũi 2 vero cell chích dễ (easy to get the 2nd Vero Cellshot) mạnh dạn nhập vaccine Trung Quốc (not balked at importing Chinese vaccines) Hy vọng vaccine Việt Nam (high hopes in Vietnamese vaccines) Chậm nhưng mà chắc (slowly but steadily) Who chấp nhận thì người dân tiêm ((If WHO approves, let the people get the vaccine) muốn dc tiêm thuốc của VN (wish to get Vietnamese vaccines) Nanocovax number one sẵn sàng tiêm (willing to get Covid vaccine) an toàn và hiệu quả (safe and effective) make in VIETNAM make in Vietnam “tiêm ngay khi còn có thể” (get the vaccines when possible) “tiêm bất cứ loại vaccine nào” (get any vaccine) “làm tốt chiến lược ngoại giao vaccine” (Vietnam’s vaccine diplomacy goes well) “kén cá chọn canh” (picky) “phân biệt vùng miền” (regionalism) “vaccine make in Vietnam” “vaccine tự lực cánh sinh” (self-reliant vaccine) “không phân biệt đối xử” (no vaccine discrimination) “chia sẻ vaccine” (vaccine sharing) | dân chết hết mới xong thử nghiệm nanocovax (the nanocovax experiment only stops when the people die) nổ quá trời mà không ra vaccine (only hollow promises on vaccines) chích vaccine chen chúc (jostle to get vaccinated) không phân chia vùng chích (no vaccination zoning) tiêm lây chéo (cross infections because of vaccination) chính quyền làm ăn tệ (the authorities did a bad job) vô tổ chức (disorganized) tổ chức quản lý yếu kém (poor governance and management) cái gì cũng tại dân (blame the people for everything) quá nhiều bất cập (too many missteps) sao không mời tiêm qua tổng đài (why not send vaccination notifications via call services?) TPHCM tổ chức chán (HCMC poorly organized vaccination) muốn tiêm mà không được (want to get vaccinated but to no avail) không thông báo rõ ràng (no clear notice) đông không dám vô tiêm (afraid of entering crowded vaccination sites) vaccine ông ngoại (nepotism vaccine) cán bộ không tiêm loại nào tôi không tiêm loại đó (I don’t the vaccines that officials refuse) đi chích vaccine về bị (infection after vaccination) không thấy tiêm mũi 2 (no words on 2nd shot) vaccine + sợ bị làm khó dễ (vaccine red tape) chừng nào tiêm trẻ em (when will children get vaccinated) vùng sâu vùng xa (vaccine for remote areas) không thể miễn dịch cộng đồng (unable to achieve herd immunity) vaccine tốt nhất là vaccine mà lãnh đạo chích (the best vaccines are ones that the leaders get) chờ tiêm vaccine xịn (wait for good vaccines) không tiêm vaccine Trung Quốc (no Chinese vaccines) không tiêm/từ chối tiêm Vero Cell (say no to Vero Cell) |
APPENDIX 3. Public Sentiments Online on Vietnam’s Covid Social Safety Nets
| Keywords on Public Support | Keywords on Public Criticism |
| được 1.200k (get 1.200k) nhận gạo thức ăn thịt mì (receive rice, food, mean and bread) nhân được 800k (get 800k) nhận được rồi cám ơn chính phủ (received, grateful to the government) chính sách có 100% (the policy delivers 100%) Theo tổ trưởng nhận 1 củ rưỡi (follow the neighborhood chief to receive VND1.5 million) 5 ngày phát gạo 1 lần (give away the rice once in five days) nhà nước đâu bỏ dân (the state doesn’t abandon the people) hi sinh lợi ích nhỏ vì cộng đồng (sacrifice small personal interests for public interests) ít nhưng vài ngày lại có (meager but still get it after several days) đăng ký là tuần sau được nhận (register and receive financial aids next week) quân đội cho quà (the troops deliver gifts) yên tâm nhà nước sẽ chăm lo rest assured that the state will take care of you) nhiệt tình chuyển lương thực (eagerly deliver food) nhân dân ủng hộ (the people support) đặt niềm tin (place trust in the government) nói ít làm nhiều (actions, not words, matter) cảm ơn các chú bộ đội (thank you, soldiers) tự hào VN (proud Vietnam) chung tay (join hands) Việt Nam cố lên (Vietnam fighting) tin tưởng Đảng (trust the Communist Party) cảm ơn Đảng và nhà nước (thank you the party and the state) nhờ ơn chính phủ (thank you the government) Đảng chỉ đường dẫn lối (the Communist Party leads the way) trên dưới đồng long (unanimous support) y tế Việt Nam AND tuyệt vời (Vietnam’s healthcare is superb) cảm ơn y bác sĩ (thank you doctors) yêu các chú bộ đội (love the soldiers) | khí thế chứ dân chết đói (despite the grandstanding, the people are starving) xe thùng sao không chở thực phẩm cho dân (those trucks cannot transport food) dân đang đói sao không chở gạo cho dân (why not transport rice for starving people0 không có xu nào (not a penny) không ai hỗ trợ (no support) báo cáo chính quyền là em hết tiền (dear the authorities, I’m broke) nhận trên tiktok (receive aids on TikTok) nhận trên facebook (receive aids on Facebook) nhận trên tv (receive aids on TV) lấy được tiền trời sập (if I could get aids, the sky would collapse) thất nghiệp x tháng rồi (unemployed for many months) Chỉ thị 16 thảm bại kinh tế (Directive 16 is an economic debacle) giãn cách ngân hàng vẫn lấy lãi (still collect bank interests under lockdown) hỗ trợ không thấy đâu (financial aids are nowhere to be found) không thấy giúp cho người ở trọ (no support for tenants) chỉ giúp người có hộ khẩu (support for those with family registers only) covid chưa chết nhưng đói thì chết (hunger will kill people before Covid does0 miền tây + khổ chồng khổ (never-ending misery for Mekong delta people) (no aid package for private businesses) doanh nghiệp + đóng băng 2 năm (businesses have been frozen for two years) tự kiếm kế sinh nhai (fend for themselves) buôn bán ế ẩm (slow business) giá mặt bằng cao (high rents) chi phí sao chịu nổi (unbearable costs) người giàu được lãnh người nghèo thì không (financial aids for the rich only) tổ trưởng kêu đợi (the neighborhood chief asks to wait) mùa covid kiếp sau (wait until the next Covid wave next life to get financial aids) trợ cấp + hi vọng mong manh (dim hope for financial aids) không có 1 xu (not a penny) làm ăn rườm rà hơi lâu (drag foot on red tape) xx tháng không có 1 đồng (many months without a penny) sót nhiều lắm (left out too many) ăn không nổi khô khủng khiếp (the food is too dry to eat) của nhà nước làm gì mà ngon (cannot expect the food to be good because it’s state sponsored) không còn lựa chọn (no option) không thấy trợ cấp mà cứ kéo dài (no subsidy despite drawn-out lockdowns) Người dân không có tiếng nói (the people have no voice) siết quá trời siết (too strict lockdowns) làm ơn để shipper chạy liên quận (please let professional shippers deliver across districts) giá đội trên trời (prices go through the roof) không có shipper (no shipper) đặt giá app quá cao (app order is too expensive) không ai nhận đơn (no one takes orders) bị hủy đơn (order canceled) đẩy shipper vào nguy hiểm (put shippers in danger) trạm y tế lưu động không hoạt động (mobile health stations not operate) xử lý thiếu tình người (inhuman handling) phạt công ty đừng phạt shipper (fine the companies, not shippers) đi bộ về quê (walk to the hometowns) ko 1 đồng (not a penny) ko 1 kg gạo (not one kilogram of rice) xuống âm phủ mới nhận (go to hell to get financial aids) gói cứu trợ mồm (financial aid pacakges on paper) ko tới tay dân (did not reach the people) rớt nhiều vào túi những người ra quyết định (only those who make decisions benefit) chậm trễ (delay) ngồi phòng lạnh ra quyết định (decisions made from air-conditioned rooms) dân khổ quá rồi (the people are too miserable) dân chết đói hết rồi (the people are starving) hết lương thực (run out of food) lấy gì mà sống (how can I survive) mệt mỏi lắm rồi (public patience wears thin) dân còn khổ dài dài (never-ending misery for the people) dân lãnh hết (the people bear the brunt) cầm cự không nổi nữa (can’t stand it anymore) mất việc (unemployed) phải trả nợ ngân hàng (bank debt) phải trả lãi ngân hang (bank interests) phá sản (bankruptcy) chủ quan (complacency) ngạo nghễ (too much pride) lúng túng (bungling) lơ là (lack of vigilance) yếu kém (incompetence) tốn kém (waste) luẩn quẩn (vicious cycle) không hiệu quả (inefficient) không ai chống dịch giống Việt Nam (no country controls the pandemic like Vietnam) |
APPENDIX 4. Public Sentiments Online on Vietnam’s Pandemic Messaging
| Keywords on Public Support | Keywords on Public Criticism |
| ủng hộ lời kêu gọi chính phủ (support the government’s call) cám ơn lãnh đạo gần dân (appreciate the government for being sympathetic to the public) phải tin vào lãnh đạo (must have faith in the leaders) bác Chính xuống làm việc (Prime Minister Chính pays a site visit) nhiều người chửi nhà nước dữ quá (too many people criticize the government) thủ tướng tuyệt vời đi vào lòng dân (kudos to the prime minister for wining public hearts and minds) Quyết định thủ tướng tuyệt vời (a wonderful decision by the prime minister) ủng hộ thống nhất app (support the integration of contact-tracing apps) lãnh đạo ngày càng dùng công nghệ (leaders go increasingly tech-savvy) quyết định thủ tướng đúng đắn (a right decision by the prime minster) phường nhắn tin gọi điện liên tục (ward officials keep texting and calling) tổng đài rất nhanh (call centers are very responsive) địa phương phối hợp tốt (local provinces coordinate well) thấu hiểu tâm tư nguyện vọng (understanding the public) họp trực tuyến rất hay (teleconference is great) thủ tướng nói rất hay (the prime minister speaks eloquently) cư xử với dân ôn hòa (treat the people kindly) thiết thực (useful information) nói ít làm nhiều (actions, not words, matter) | không làm đúng dân chửi (incur the public wrath for failing to do their job properly) làm như lo cho dân lắm (as if they cared much about the people) chỉ thấy toàn thị uy (the officials just show off) không a dua theo đám đông là bị quy chụp (get pigeonholed for not following the pack) chính quyền sợ dân túng làm loạn (the government worries that desperate people will rise) ra quân để phạt người dân (deploy the fore just to fine people) toàn màu mè (just grandstanding) khí thế chứ dân chết đói (the people are starving despite the official grandstanding) trên nói nghe để đó (government directions fall on deaf ears) chính quyền phải nói thật với người dân (the authorities need to be transparent with the people) bình mới rượu cũ (new bottle old wine) không coi chính phủ ra gì (disdain the government) nhiều app quá (too many contact-tracing apps) rủi ro lộ thông tin cá nhân (risk of personal data leak) giấu thông tin (information cover-up) hô hào thì giỏi (no action, talk only) báo đài không nói rõ (the media didn’t articulate well) mỗi người nói một kiểu (contradicting messages) nhà nước thông não cấp dưới giùm (the government needs to rein in local leaders) tổ trưởng chẳng làm được gì (neighborhood chiefs are hopeless) Người dân không có tiếng nói (the people have no voice) Mấy chục lần 2 tuần (how many times “two more weeks”?) nói thì giỏi làm thì dở (no action, talk only) giả mù giả điếc (turn a blind eye) thủ tướng yêu cầu nhưng về địa phương lại khác (local leaders contradict the prime minister directive) cấp cao cần kiểm tra lại (central leaders need to double check their local subordinates) đừng thấy đỏ mà tưởng là chin (don’t count the chickens before they are hatched) đánh úp người dân (caught the people off-guard) hứa thật nhiều thất hứa thật nhiều (too much lip service) bảo fake news hóa ra real (fake news turns out to be real) có ca nhiễm vẫn nói kiểm soát (too many cases but officials still claim under control) giấu như mèo giấu cứt (cover up) chống dịch trên tivi (fight the pandemic on TV) làm dân hoang mang (confuse the public) loạn cào cào (too chaotic) quay dân như chong chóng (leave the people scratching their heads) baáo chí mỗi người một phách (the media conveys contradicting messages) không hiểu nổi chính sách (cannot understand the policy) mị dân (demagogic) diễn sâu (showmanship) _ giao hàng chậm (slow delivery) tin đồn vài ngày nữa thành sự thật (rumors become true after several days) |
APPENDIX 5. Pro-Government Facebook Pages
| Việt Nam trong tim tôi | https://www.facebook.com/VNTTTnew/ |
| Phân đội Alpha- Đơn vị Tác Chiến Điện Tử | https://www.facebook.com/WarCommissar |
| Tifosi | https://www.facebook.com/tifosi.hpo |
| Học viện phòng chống phản động – Anti-reactionary academy | https://www.facebook.com/aravietnam2017 |
| Đất Nước vs Dân Tộc | https://www.facebook.com/datnuocvsdantoc |
| Thông tin chống phản động | https://www.facebook.com/thongtinchongphandong/ |
| TÔI YÊU CÔNG AN NHÂN DÂN VIỆT NAM | https://www.facebook.com/ToiYeuCANDVN/ |
| VietDefense | https://www.facebook.com/VietDefenseVN |
| Quả Đấm Thép Miền Đông Nam Bộ | https://www.facebook.com/miendonggianlaomaanhdung |
| Trang Quân sự Việt Nam | https://www.facebook.com/qsvnfp |
ENDNOTES
[1] Tomoya Onishi, “Ho Chi Minh City jobless flee as Vietnam eases COVID curbs”. Nikkei Asia, 1 October 2021. https://asia.nikkei.com/Spotlight/Coronavirus/Ho-Chi-Minh-City-jobless-flee-as-Vietnam-eases-COVID-curbs
[2] “Plan to ban people from leaving their homes triggers panic buying in Ho Chi Minh City”. Reuters and The Straits Times, 21 August 2021. https://www.straitstimes.com/asia/se-asia/panic-buying-in-vietnams-ho-chi-minh-city-before-tighter-covid-19-lockdown
[3] Sen Nguyen, “Vietnam’s Pandemic Success Is a Lesson for the World”. GlobalAsia, September 2020. https://www.globalasia.org/v15no3/cover/vietnams-pandemic-success-is-a-lesson-for-the-world_sen-nguyen
[4] “COVID-19: government handling and confidence in health authorities”. YouGov, 9 May 2021. https://today.yougov.com/topics/international/articles-reports/2020/03/17/perception-government-handling-covid-19
[5] Chen Lin, “Vietnam urges WHO to send more COVID-19 shots as cases surge despite lockdown”. Reuters, 25 August 2021. https://www.reuters.com/world/asia-pacific/vietnam-urges-who-send-more-covid-19-shots-cases-surge-despite-lockdown-2021-08-25/
[6] “Vietnam passes 800,000 reported COVID-19 infections”. Reuters, 4 October 2021. https://graphics.reuters.com/world-coronavirus-tracker-and-maps/countries-and-territories/vietnam/
[7] “Ho Chi Minh City could lift lockdown, end ‘zero COVID-19’ policy”. Channel News Asia, 3 September 2021. https://www.channelnewsasia.com/asia/vietnam-ho-chi-minh-city-lift-lockdown-end-zero-covid-19-policy-2154341
[8] Zachary Abuza, “What Explains Vietnam’s Current COVID-19 Struggles?”. The Diplomat, 15 June 2021. https://thediplomat.com/2021/06/what-explains-vietnams-current-covid-19-struggles/
[9] Tomoya Onishi, “Vietnam accepts China COVID shots as inoculation drive stalls”. Nikkei Asia, 21 June 2021. https://asia.nikkei.com/Spotlight/Coronavirus/Vietnam-accepts-China-COVID-shots-as-inoculation-drive-stalls
[10] Barnaby Flower, “Delta variant sets off alarm bells in Vietnam”. East Asia Forum, 1 Augut 2021. https://www.eastasiaforum.org/2021/08/01/delta-variant-sets-off-alarm-bells-in-vietnam/
[11] “Vaccine hoarding set to backfire on rich nations as India reels from Covid-19 surge”. The Straits Times, 27 April 2021. https://www.straitstimes.com/asia/south-asia/vaccine-hoarding-set-to-backfire-on-rich-nations-as-india-reels
[12] Jeffrey Gettleman, Emily Schmall and Mujib Mashal, “India Cuts Back on Vaccine Exports as Infections Surge at Home”. New York Times, 25 March 2021. https://www.nytimes.com/2021/03/25/world/asia/india-covid-vaccine-astrazeneca.html
[13] Prak Chan Thul, “How China’s vaccine diplomacy brought bosom buddy Cambodia even closer”. Reuters, 8 June 2021. https://www.reuters.com/world/asia-pacific/how-chinas-vaccine-diplomacy-brought-bosom-buddy-cambodia-even-closer-2021-06-08/
[14] Jeneen Interlandi, “The World Is at War with Covid. Covid Is Winning”. New York Times, 21 September 2021. https://www.nytimes.com/2021/09/21/opinion/sunday/covid-vaccine-world.html
[15] Phuong Nguyen, “Vietnam opts for containment over ‘high risk’ rush for costly vaccine”. Reuters, 6 November 2020. https://www.reuters.com/article/us-health-coronavirus-vietnam-idINKBN27M0L8
[16] Le Hong Hiep, “Challenges Facing Vietnam’s Covid-19 Vaccination Drive”. Fulcrum, 8 June 2021. https://fulcrum.sg/challenges-facing-vietnams-covid-19-vaccination-drive/
[17] Tan Hui Yee, “Vietnam grapples with public frustration over Covid-19 pandemic missteps and transparency”. The Straits Times, 28 July 2021. https://www.straitstimes.com/asia/se-asia/vietnam-grapples-with-public-frustration-over-pandemic-missteps-and-transparency
[18] “Vietnam to receive 1 mln doses of AstraZeneca vaccine weekly from July”. Reuters, 22 June 2021. https://www.reuters.com/business/healthcare-pharmaceuticals/vietnam-receive-1-mln-doses-astrazeneca-vaccine-weekly-july-2021-06-22/
[19] Sarah Johnson and Nhung Nguyen, “‘Hunger was something we read about’: lockdown leaves Vietnam’s poor without food”. The Guardian, 8 September 2021. https://www.theguardian.com/global-development/2021/sep/08/hunger-was-something-we-read-about-lockdown-leaves-vietnams-poor-without-food
[20] Tomoya Onishi, Vietnam’s GDP shrinks 6.17% in Q3, hurt by pandemic lockdowns. Nikkei Asia, September 29, 2021. https://asia.nikkei.com/Economy/Vietnam-s-GDP-shrinks-6.17-in-Q3-hurt-by-pandemic-lockdowns
[21] Tomoya Onishi and Grace Li, “Vietnam’s Ho Chi Minh City has highest COVID death rate in region”. Nikkei Asia, 11 September 2021. https://asia.nikkei.com/Spotlight/Coronavirus/Vietnam-s-Ho-Chi-Minh-City-has-highest-COVID-death-rate-in-region
[22] “Vietnam aims for dual goal in 2022 economic development plan”. Nhan Dan, 27 July 2021. https://en.nhandan.vn/business/item/10208702-vietnam-aims-for-dual-goal-in-2022-economic-development-plan.html
[23] Sebastian Strangio, “COVID-19 Stages Another Comeback in Vietnam”. The Diplomat, 4 May 2021. https://thediplomat.com/2021/05/covid-19-stages-another-comeback-in-vietnam/
[24] Tomoya Onishi, “Vietnam launches $1.1bn COVID vaccine fund: 5 things to know”. Nikkei Asia, 4 June 2021. https://asia.nikkei.com/Spotlight/Coronavirus/Vietnam-launches-1.1bn-COVID-vaccine-fund-5-things-to-know
[25] Anh Minh, “Vietnam nears vaccination fund goal”. VnExpress International, 25 June 2021. https://e.vnexpress.net/news/news/vietnam-nears-vaccination-fund-goal-4299818.html
[26] Dien Nguyen An Luong, “How How The Vietnamese State Uses Cyber Troops to Shape Online Discourse”, ISEAS Perspective, no. 2020/115, 13 October 2020, p. 2
[27] “Vietnam licenses firm to import 5 mln doses of Sinopharm vaccine”. Reuters, 9 July 2021. https://www.reuters.com/world/asia-pacific/vietnam-licenses-firm-import-5-mln-doses-sinopharm-vaccine-2021-07-09/
[28] “Vietnam Faces Risk of Interruption in Vaccination Campaign”. Voice of America, 26 August 2021. https://www.voanews.com/a/covid-19-pandemic_vietnam-faces-risk-interruption-vaccination-campaign/6210002.html
[29] “COVID-19: Willingness to be vaccinated”. YouGov, 18 October 2021. https://yougov.co.uk/topics/international/articles-reports/2021/01/12/covid-19-willingness-be-vaccinated
[30] Viet Tuan, “Vietnam to buy 20 million Chinese vaccine doses”. VnExpress International, 22 September 2021. https://e.vnexpress.net/news/news/vietnam-to-buy-20-million-chinese-vaccine-doses-4360543.html
[31] Sen Nguyen, “Volunteers in Vietnam come to the rescue as coronavirus lockdown hits the vulnerable”. South China Morning Post, 11 August 2021. https://www.scmp.com/week-asia/health-environment/article/3144571/volunteers-vietnam-come-rescue-coronavirus-lockdown
[32] Joanik Bellalou, “Vietnam’s Ho Chi Minh City turns into ghost town under Covid-19 lockdown”. The Straits Times, 19 July 2021. https://www.straitstimes.com/asia/se-asia/vietnams-ho-chi-minh-city-turns-into-ghost-town-under-covid-19-lockdown
[33] “Vietnam’s capital ramps up testing after extending COVID-19 curbs”. Reuters, 6 September 2021. https://news.trust.org/item/20210906103522-37n73/
[34] Anh Minh, “Pandemic impacts survey finds 62 percent losing jobs”. VnExpress International, 2 September 2021. https://e.vnexpress.net/news/business/data-speaks/pandemic-impacts-survey-finds-62-percent-losing-jobs-4349806.html
[35] Tomoya Onishi, “Vietnam deploys troops in Ho Chi Minh City to suppress COVID”. Nikkei Asia, 20 August 2021. https://asia.nikkei.com/Spotlight/Coronavirus/Vietnam-deploys-troops-in-Ho-Chi-Minh-City-to-suppress-COVID
[36] Dinh Van, Quynh Tran, “Soldiers supply food to HCMC needy”. VnExpress International, 23 August 2021. https://e.vnexpress.net/news/news/soldiers-supply-food-to-hcmc-needy-4345077.html
[37] Tomoya Onishi, “Vietnam faces food delivery crisis in Ho Chi Minh City”. Nikkei Asia, 3 September 2021. https://asia.nikkei.com/Spotlight/Coronavirus/Vietnam-faces-food-delivery-crisis-in-Ho-Chi-Minh-City
[38] Huu Cong, HCMC shippers to resume operations in eight high-risk districts. VnExpress International, 28 August 2021. https://e.vnexpress.net/news/news/hcmc-shippers-to-resume-operations-in-eight-high-risk-districts-4347870.html
[39] Tomoya Onishi and Grace Li, “Vietnam extends Ho Chi Minh City lockdown as COVID rages”. Nikkei Asia, 16 September 2021. https://asia.nikkei.com/Spotlight/Coronavirus/Vietnam-extends-Ho-Chi-Minh-City-lockdown-as-COVID-rages
[40] Viet Tuan, “Vietnam prepares to live safely with Covid: PM”. VnExpress International, 6 September 2021. https://e.vnexpress.net/news/news/vietnam-prepares-to-live-safely-with-covid-pm-4351981.html
[41] Truong Thuy Quynh and Pham Thi Thuy Duong, “Bittersweet: Vietnam’s Mixed Progress on E-Government During COVID-19”. The Diplomat, 16 July 2021. https://thediplomat.com/2021/07/bittersweet-vietnams-mixed-progress-on-e-government-during-covid-19/
[42] Liam Gammon, “Vietnam is paying for its early virus success. Sound familiar?”. Financial Review, 1 August 2021. https://www.afr.com/world/asia/vietnam-is-paying-for-its-early-virus-success-sound-familiar-20210801-p58ery
[43] Hong Kong Nguyen and Tung Manh Ho, “Vietnam’s COVID-19 Strategy: Mobilizing Public Compliance Via Accurate and Credible Communication”, ISEAS Perspective, no. 2020/69, 25 June 2020. /wp-content/uploads/2020/05/ISEAS_Perspective_2020_69.pdf
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EXECUTIVE SUMMARY
- Japan’s maritime capacity-building assistance for Vietnam, which includes training seminars, joint exercises and equipment transfer, has become a prominent feature in bilateral cooperation.
- The cooperation is driven by their increasingly convergent strategic interests, including preserving the safety of maritime trade routes and countering China’s increasing assertiveness in territorial and maritime disputes. Capacity-building assistance for Vietnam is also in line with Japan’s Free and Open Indo-Pacific vision for an international rules-based order.
- Vietnam is receptive to Japan’s assistance due to the high level of political trust between the two countries and to Hanoi’s wish to mobilize resources for its hedging strategy against China.
- The prospect for bilateral maritime capacity-building cooperation is promising, especially if Japan works with its allies and partners to coordinate their assistance for Vietnam.
*Hanh Nguyen is a Non-resident WSD-Handa Fellow at the Pacific Forum. Her research interests include Southeast Asian politics and security, and Vietnam’s foreign policy.
ISEAS Perspective 2021/148, 16 November 2021
INTRODUCTION
Japan has traditionally been a provider of maritime capacity-building assistance for Southeast Asian states, offering activities ranging from joint exercises, training opportunities in Japan for defence personnel to equipment transfer. The assistance aims to strengthen the capacity of these countries in maritime domain awareness and law enforcement, thereby facilitating faster and more effective responses to security challenges.
Among Southeast Asian states, Vietnam has emerged as a prioritized partner for Japan’s maritime capacity-building initiatives. Driven by a confluence of strategic interests, including the safety of maritime trade routes and growing alarm over China’s behaviour in territorial and maritime disputes, Japan and Vietnam have cooperated extensively to enhance the latter’s maritime capacity. Cooperation initiatives include training seminars, joint exercises between navies and coast guard forces, as well as equipment and technology transfers. Vietnam sees Japan as an ideal partner in its quest for military and law enforcement modernization and its struggle against China in the South China Sea. For Japan, capacity-building assistance for Vietnam is in line with its Free and Open Indo-Pacific (FOIP) vision, in which Tokyo seeks to enhance the capacity of Southeast Asian states to promote a regional rules-based order.
JAPAN-VIETNAM STRATEGIC PARTNERSHIP
Japan and Vietnam have been enjoying a solid bilateral partnership covering economic, political and security cooperation. With US$60 billion investments in 4,641 projects as of 2020, Japan is Vietnam’s second-biggest foreign investor.[1] Japan is also a top provider of official development assistance (ODA) to Vietnam, sending the country US$650 million in grants, loans and equity investment in 2019.[2] On the political front, the two countries established an extensive strategic partnership in 2014 and agreed to deepen it three years later. Japan has thus emerged as a close security partner of Vietnam, providing the latter with patrol vessels and maritime security-related equipment.
The foundation for capacity-building cooperation between Japan and Vietnam has been laid out in a series of official documents. The two countries kickstarted their security engagement by signing a memorandum of understanding on defence cooperation in 2011, which promised capacity-building initiatives such as defence personnel training in Japan, cooperation in search and rescue (SAR), humanitarian assistance/disaster relief (HA/DR), counterterrorism, military medicine, IT training, and peacekeeping.[3] In the 2014 Joint Statement on the Establishment of the Extensive Strategic Partnership for Peace and Prosperity in Asia, both sides announced their intention to advance cooperation in capacity-building, particularly by enhancing the capacity of Vietnam’s maritime law enforcement agencies.[4] During the visit of Prime Minister Nguyen Xuan Phuc to Japan in 2017, Japan and Vietnam agreed to deepen their strategic partnership and advance capacity-building initiatives, including information exchange between coast guard agencies.[5] In 2018, the two sides signed a Joint Vision Statement on Defence Relations, promising more military exchanges, cooperation in aviation search and rescue and peacekeeping operations.[6] The following table summarizes the main types of capacity-building initiatives that the two countries conducted between 2012 and 2020.
Japan’s Capacity-building Initiatives with Vietnam 2012-20
Source: Author’s compilation based on Ministry of Defence of Japan[7] and various media reports
Vietnam is not the only country that benefits from Japan’s maritime capacity-building assistance. Tokyo has long provided this type of assistance for several Southeast Asian states since the late 1960s. However, over the past decade, a confluence of strategic interests has particularly encouraged Japan and Vietnam to promote this type of cooperation.
JAPAN’S STRATEGIC INTERESTS
As a resource-poor country pursuing export-led growth, Japan pays constant attention to maintaining the safe transit of goods along critical sea lines of communication (SLOC). Several of these SLOCs are located in the South China Sea and fall within the jurisdiction of Southeast Asian littoral states such as Indonesia, Malaysia, The Philippines, Singapore and Vietnam.[8] In 2016, 42 per cent of Japan’s maritime trade passed through the South China Sea.[9] However, Japan has been facing several maritime security challenges in this area, which threatens the safety of ship passage with repercussions for Japan’s economic wellbeing. These challenges include traditional and non-traditional threats ranging from natural disasters, maritime safety incidents, illegal fishing, piracy, to territorial and maritime disputes. Southeast Asian littoral states also have varying levels of capacity to respond to these challenges.
China’s growing naval power also complicated Japan’s efforts to protect critical SLOCs. Buoyed by exponential growth over the past 30 years, China has rapidly expanded and strengthened its maritime forces, including its navy and coast guard. The People’s Liberation Army Navy (PLAN) is currently the world’s largest navy with approximately 335 ships as of 2019, while the China Coast Guard (CCG) also ranks as the world’s largest coast guard.[10] China’s assertive posture in territorial and maritime disputes with Southeast Asian claimant states in the South China Sea, and Japan in the East China Sea also presents another grave concern for Japan. Heightened tensions could spiral into open conflicts, potentially disrupting maritime trade flows. Additionally, China’s actions, from its more frequent incursions into waters around the Senkaku/Diaoyu Islands and its rejection of the 2016 arbitral ruling to its construction and militarization of seven artificial islands in the Spratlys, pose a challenge to the rules-based international order, which underpins Japan’s prosperity.
Nevertheless, Tokyo faces two major limiting factors in dealing with these challenges. First, Article 9 of Japan’s Constitution states that the country will renounce war as a sovereign right and also the use of force to settle international disputes, thus limiting Japan’s capacity to engage in collective self-defence activities with other countries whose strategic interests are closely aligned with Japan’s.[11] Second, Japan’s imperial legacy from World War II means that it would be more challenging for Japan to openly employ its Self Defence Force (SDF) to conduct maritime security operations in the region,[12] and this action would be deemed controversial by Japan’s anti-militarist society.
Mindful of these constraints, Japan has followed a nuanced and cautious approach in offering maritime capacity-building assistance to regional states, especially to enhance their governance, infrastructure and law enforcement capacity.[13] Starting from the late 1960s, these activities generally focused on maritime accidents, marine environment protection and navigation safety.[14] Tokyo mostly enlisted civilian agencies, notably the Japan Coast Guard (JCG) and the Japan International Cooperation Agency (JICA), along with private organizations such as the Nippon Foundation, to deliver the assistance.[15] At that time, the nature of Japan’s engagement remained mostly civilian, with restricted roles for its armed forces.
Over the years, new security challenges have emerged, including piracy, terrorism and China’s increasingly assertive postures in territorial and maritime disputes. Japan’s response to the changing environment includes an emphasis on maritime law enforcement, which added a security dimension to its assistance. The expansion of cooperation areas had two main implications: first, an enhanced role for the Japan Maritime Self-Defence Force (JMSDF) as it engaged in more diplomatic and constabulary missions with regional armed forces;[16] and second, Tokyo’s adoption of new legislations to create a legal framework for capacity-building initiatives. Tokyo relaxed its self-imposed arms export ban by introducing the “Three Principles on Transfer of Defence Equipment and Technology” in 2014, allowing arms transfers that contribute to the active promotion of peace and Japan’s security.[17] Later, it revised the Development Cooperation Charter in 2015 to allow for the provision of aid for foreign militaries.[18] These developments were consistent with Japan’s 2012 National Security Strategy, which proposed to accelerate security-related assistance through capacity-building initiatives and strategic utilization of ODA.[19] Japan’s FOIP vision later elevated capacity-building assistance as a core instrument for promoting peace and stability.[20]
While Japan also provides some other Southeast Asian states with maritime capacity-building assistance, its cooperation with Vietnam has grown rapidly and extensively since 2012. An important underlying reason is that Japan sees a connection between its own dispute with China over the Senkaku Islands and the South China Sea disputes. If China is able to coerce other claimants in the South China Sea to accept its claims, this could further embolden China in its confrontation with Japan in the East China Sea. Vietnam, generally considered as the most willing and capable among South China Sea claimant states to stand up to China’s coercion, is therefore a natural maritime security partner for Japan.
Furthermore, a more capable Vietnam in the maritime domain contributes to Japan’s broader strategic goal of preserving the international rules-based order. Tokyo aims to achieve this overarching goal of its FOIP vision through different measures, in which promoting the rule of law and freedom of navigation is key. Stronger maritime capacity will enable Vietnam to better resist coercive actions by China which contravene the international legal norms and undermine the international rules-based order. Moreover, a stronger Vietnam capable of challenging China in the South China Sea can also help lower China’s pressures on Japan in the East China Sea, where Japan has been facing more frequent Chinese intrusions in recent years.
VIETNAM’S RECEPTION OF JAPANESE ASSISTANCE
Vietnam is increasingly receptive to Japan’s overtures in maritime security cooperation because it shares similar strategic interests with the latter, particularly in protecting commercial sea routes and countering China’s increasing assertiveness in the South China Sea. Vietnam’s economic modernization has led the country to become increasingly reliant on foreign trade, and thus on the safety and openness of maritime trade routes in the South China Sea for its economic wellbeing. The importance of these shipping routes will only increase in the future, given Vietnam’s aspiration to become a regional manufacturing and logistics hub. Furthermore, the rise of non-traditional security challenges in the maritime domain, including piracy, illegal fishing, smuggling, natural disasters and climate change, means that Vietnam will need to devote greater resources and attention to maritime security issues.[21] The Vietnam Coast Guard (VCG) recently received some major investments, including six Aso-class patrol boats funded by Japan’s ODA, but still needs more investments for monitoring Vietnam’s vast maritime domain.
Vietnam’s oil and gas activities in the South China Sea have also been disrupted by China on multiple occasions. For example, a major crisis broke out when China moved a giant oil rig into Vietnam’s exclusive economic zone in May 2014, leading to a two-month violent standoff.[22] Tensions rose again in 2019 when the Chinese survey ship Haiyang Dizhi 8 entered waters near Vanguard Bank on Vietnam’s continental shelf and conducted oil and gas surveys across a wide area for four months.[23] In 2020, a CCG vessel reportedly rammed and sunk a Vietnamese fishing boat near the Paracel Islands.[24] China’s construction and militarization of seven artificial islands in the Spratlys also pose a substantial threat to Vietnam’s security.
Against this backdrop, Vietnam highly appreciates Japan’s maritime capacity-building assistance. Despite significant investments in its naval and maritime law enforcement capabilities, Vietnam cannot possibly match China’s military power, leaving the country in a precarious position vis-à-vis China’s incursions.[25] Moreover, there are domains where Vietnam still lacks capabilities, such as the monitoring of its vast maritime domain. This capability is also critical for Vietnam’s efforts to handle natural disasters, deter maritime crimes and enforce its claims in disputed areas. Japan’s assistance, such as the transfer of maritime security-related equipment, therefore strengthens Vietnam’s capability in this regard. In July 2020, a loan agreement was signed for Japan to build six patrol boats for VCG using Japan’s ODA.[26] In September 2021, the two countries signed another agreement to facilitate Japan’s transfer of defence gear and technology, possibly including patrol planes and radars, to Vietnam.[27]
Cooperation with Japan also contributes to Vietnam’s hedging strategy against China. Specifically, Vietnam looks to strengthen security and defence ties with the major powers through a series of comprehensive and strategic partnerships to push back against China’s bullying behaviours. Japan is therefore a priority partner of Vietnam, given the high level of political trust between the two countries. There is no historical baggage in bilateral relations and Tokyo has been consistently supporting Vietnam’s economic development since the early 1990s through both ODA and foreign direct investments (FDI). Through these avenues, Japan has helped Vietnam develop its infrastructure, governance capacity and human resource, which are critical to Vietnam’s economic modernization.[28] Maritime capacity-building cooperation can help further strengthen the overall ties and deepen the strategic partnership between the two countries.
PROSPECTS FOR FUTURE COOPERATION
Japan’s capacity-building assistance for Vietnam is expected to continue as the confluence of strategic interests between the two countries will likely persist. In 2019 and 2020, China dramatically stepped up its incursions into waters around the Senkaku Islands—1,097 times in 2019 and 1,161 times in 2020. Some of its ships also stayed in the area for 333 days in 2020.[29] In the South China Sea, China continued its foray into the exclusive economic zones of Vietnam, The Philippines, Indonesia and Malaysia, harassing their oil and gas exploration activities. China recently passed a controversial coast guard law that grants the CCG sweeping authority, including the right to take “necessary measures” against foreign vessels deemed violating waters under its jurisdiction, including deportation, forced towing, and even “the use of weapons”.[30] This could put patrol vessels of both VCG and JCG under direct threat, further encouraging them to strengthen pragmatic cooperation and policy coordination.
However, Japan’s need to focus on other strategic areas might hamstring its efforts to deepen capacity-building cooperation with Vietnam. Other than surging incursions by CCG vessels into waters around the Senkaku Islands, Tokyo has also been facing increased activities from PLA Navy and Air Force. In fiscal year 2018, Japan Air Self Defence Force (JASDF) had to scramble its fighter jets 675 times to intercept Chinese military aircraft.[3`1] Recently, a group of ten military vessels from China and Russia sailed through the Tsugaru Strait.[32] In response, Japan has since 2012 significantly enhanced its defence posture in its Southwestern region, which covers the Senkaku Islands. Tokyo also needs to keep an eye on the simmering tensions in the Taiwan Strait. Given the proximity between Taiwan and Japan, a Chinese military takeover of Taiwan will risk spreading turmoil to Japan’s Southwestern region and threaten Japan’s main islands.[33] Preparing to respond to these contingencies will require immense resources. Given Tokyo’s high debt level, which rose to a record 1.4 quadrillion yen (US$10.5 trillion) in fiscal year 2020, Japan’s budget for maritime capacity-building programmes will come under great stress.[34] Furthermore, Tokyo also has to prioritize domestic demands, especially post-pandemic economic stimulus packages and social welfare spending to deal with its ageing population.
Vietnam will continue to seek assistance from Japan to strengthen its maritime domain awareness and maritime law enforcement capacity. Japan can meet this demand from Vietnam (and other Southeast Asian states) by coordinating its capacity-building assistance with its key allies and partners, especially the United States, Australia and India, all of which are providing varying levels of capacity-building assistance for Vietnam through bilateral channels; for example, American and Australian experts participated in Japan-led underwater medicine seminars for Vietnam held in 2013 and 2015.
These countries can work together on other joint initiatives to create synergy between their capacity-building programmes. Such collaboration will allow Japan and its allies and partners to share the financial costs, take advantage of each other’s strengths, and optimize their assistance to best meet the maritime capacity-building needs of Vietnam as well as regional countries.
ENDNOTES
[1] Statistical Yearbook of Vietnam 2020 (Hanoi: Statistical Publishing House, 2021), p. 280.
[2] “Donor Tracker: Japan,” https://donortracker.org/country/japan.
[3] Carlyle Thayer, “Vietnam’s extensive strategic partnership with Japan,” The Diplomat, 14 October 2014, https://thediplomat.com/2014/10/vietnams-extensive-strategic-partnership-with-japan/.
[4] Ministry of Foreign Affairs of Japan, “Joint statement on the establishment of the extensive strategic partnership,” 18 March 2014, https://www.mofa.go.jp/files/000031617.pdf.
[5] Ministry of Foreign Affairs of Japan, “Joint Statement on deepening the Japan-Vietnam extensive strategic partnership,” 6 June 2017, https://www.mofa.go.jp/files/000262573.pdf.
[6] Felix Kim, “Japan, Vietnam pledge to increase defense cooperation,” Indo-Pacific Defense Forum, 6 October 2018, https://ipdefenseforum.com/2018/10/japan-vietnam-pledge-to-increase-defense-cooperation/.
[7] Ministry of Defence of Japan, “Japan’s defense capacity-building assistance,” https://www.mofa.go.jp/files/000146830.pdf.
[8] Jay Tristan Tariela, “Abe’s Coast Guard diplomacy in Southeast Asia,” Asia Centre, April 2019, https://centreasia.eu/wp-content/uploads/2019/07/12-Tarriela-GardesCo%CC%82tesJapon_Avr19.pdf.
[9] “How much trade transits the South China Sea,” Center for Strategic and International studies, https://chinapower.csis.org/much-trade-transits-south-china-sea/.
[10] “How is China modernizing its Navy?” Center for Strategic and International Studies, https://chinapower.csis.org/china-naval-modernization/; Lyle J. Morris, “Blunt Defenders of Sovereignty: The Rise of Coast Guards in East and Southeast Asia,” Naval War College Review 70, no. 2 (2017): 75-112.
[11] Andrew Oros, Japan’s Security Renaissance: New Policies and Politics in the 21st Century (New York: Columbia University Press, 2017).
[12] Ian Storey, “Japan’s Maritime Security Interests in Southeast Asia and the South China Sea Dispute,” Political Science 65, no. 2 (2013): 135-156.
[13] Yoichiro Sato, “Southeast Asian receptiveness to Japanese maritime security cooperation,” Asia Pacific Center for Security Studies, September 2007, https://apcss.org/Publications/Maritime%20security%20cooperation%20Japan-SE%20Asia%20Sato.pdf.
[14] John Bradford, “Japan’s Naval Activities in Southeast Asian Waters: Building on 50 years of Maritime Security Capacity Building,” Asian Security 17, no. 1 (2021): 79-104.
[15] Ibid.
[16] John Bradford, “Southeast Asia: A new strategic nexus for Japan’s maritime strategy,” Cimsec, 21 September 2020, https://cimsec.org/southeast-asia-a-new-strategic-nexus-for-japans-maritime-strategy/.
[17] Ministry of Foreign Affairs of Japan, “The three principles on transfer of defense equipment and technology,” 1 April 2014, https://www.mofa.go.jp/press/release/press22e_000010.html; Alexandra Sakaki & Sebastian Maslow (2020) “Japan’s new arms export policies: Strategic aspirations and domestic constraints,” Australian Journal of International Affairs 74, no. 6: 649-669.
[18] Ministry of Foreign Affairs of Japan, “Cabinet decision on the Development Cooperation Charter,” 10 February 2015, https://www.mofa.go.jp/files/000067701.pdf; Fumitaka Furuoka, “Breaking Japan’s aid policy taboo,” East Asia Forum, 10 March 2016, https://www.eastasiaforum.org/2016/03/10/breaking-japans-aid-policy-taboo/.
[19] Ministry of Foreign Affairs of Japan, “National Security Strategy,” 17 December 2013, https://www.cas.go.jp/jp/siryou/131217anzenhoshou/nss-e.pdf.
[20] Ministry of Foreign Affairs of Japan, “Free and Open Indo-Pacific, updated 1 April 2021, https://www.mofa.go.jp/files/000430632.pdf.
[21] Anh Duc Ton, “Vietnam’s maritime security challenges and regional defense and security cooperation,” Sea Power Centre, March 2018, https://www.navy.gov.au/sites/default/files/documents/CMDR_Anh_Duc_Ton_Vietnams_Maritime_Security_Challenges_0.pdf.
[22] Le Hong Hiep, “Pull and push: Sino-Vietnamese relations and President Xi’s Hanoi visit,” ISEAS Perspective, no. 92, 18 December 2017, /images/pdf/ISEAS_Perspective_2017_92.pdf.
[23] Lye Liang Fook & Ha Hoang Hop, “The Vanguard Bank incident: Developments and what next?” ISEAS Perspective, no. 69, 4 September 2019, /images/pdf/ISEAS_Perspective_2019_69.pdf.
[24] Khanh Vu, “Vietnam protests Beijing’s sinking of South China Sea boat,” Reuters, 4 April 2020, https://www.reuters.com/article/us-vietnam-china-southchinasea/vietnam-protests-beijings-sinking-of-south-china-sea-boat-idUSKBN21M072.
[25] Shang-su Wu, “The development of Vietnam’s sea-denial strategy,” Naval War College Review 70, no. 1 (2017): 143-161.
[26] Japan International Cooperation Agency, “Signing of Japanese ODA loan agreement with Vietnam: Strengthening the maritime security and safety capability of the Vietnam Coast Guard,” 30 July 2020, https://www.jica.go.jp/english/news/press/2020/20200730_31_en.html.
[27] Nikkei Asia, “Japan inks deal to export defense assets to Vietnam amid China worry,” 11 September 2021, https://asia.nikkei.com/Politics/International-relations/Japan-inks-deal-to-export-defense-assets-to-Vietnam-amid-China-worry.
[28] Ministry of Foreign Affairs of Japan, “Japan’s ODA data for Vietnam,” https://www.mofa.go.jp/policy/oda/page_000008.html#vietnam.
[29] Ministry of Defence of Japan, “Defense of Japan 2021,” p. 18.
[30] Shigeki Sakamoto, “China’s new coast guard law and implications for maritime security in East and South China Seas,” Lawfare, 16 February 2021, https://www.lawfareblog.com/chinas-new-coast-guard-law-and-implications-maritime-security-east-and-south-china-seas.
[31]Franz-Stefan Gady, “Japan intercepted Chinese military aircraft 675 times in fiscal year 2019,” The Diplomat, 10 April 2020, https://thediplomat.com/2020/04/japan-intercepted-chinese-military-aircraft-675-times-in-fiscal-year-2019/.
[32] Mike Yeo, “Chinese-Russian task force sails around Japan,” Defense News, 22 October 2021, https://www.defensenews.com/global/asia-pacific/2021/10/22/chinese-russian-task-force-sails-around-japan/.
[33] Yamaguchi Noboru, “Japan’s new security posture and its implications for Taiwan,” The Asan Forum, 24 September 2021, https://theasanforum.org/japans-new-security-posture-and-its-implications-for-taiwan/#9.
[34] “Japanese government debt rises by record ¥101 trillion yen in fiscal 2020,” The Japan Times, 11 May 2021, https://www.japantimes.co.jp/news/2021/05/11/business/economy-business/japan-government-debt/.
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EXECUTIVE SUMMARY
- Chinese Foreign Minister Wang Yi paid an official visit to Vietnam on 10-12 September as part of Beijing’s efforts to reassert its influence on Vietnam and pull Hanoi back from its perceived ‘tilt’ towards Washington.
- Wang Yi emphasised the ideological affinity between the two countries, stepped up China’s vaccine diplomacy, and warned Vietnam about external interferences in the South China Sea.
- Hosting Wang Yi provided Vietnam with an opportunity to address existing issues in bilateral relations and certain domestic concerns, especially to secure China’s support for the Covid-19 response.
- Over the past year, bilateral ties seem to have enjoyed a rare respite from tensions in the South China Sea, and Wang Yi’s visit could add to this renewed momentum in the improvement of bilateral relations.
- However, Vietnam-China relations are fundamentally constrained by strategic distrust over the South China Sea dispute. The intensifying China-US strategic competition is another challenge for Hanoi.
- While Hanoi continues to nurture ties with both China and the US, and insists not to take sides, it needs to also think forward and be prepared to make tough choices on relevant issues in the future.
* Hoang Thi Ha is Fellow and Co-coordinator of the Regional Strategic and Political Studies Programme, and Le Hong Hiep is Senior Fellow and Coordinator of the Vietnam Studies Programme at ISEAS – Yusof Ishak Institute.
INTRODUCTION
Chinese Foreign Minister Wang Yi paid an official visit to Vietnam on 10-12 September as part of his East Asia tour that also included stops in Singapore, Cambodia and the Republic of Korea. During his visit, he co-chaired the 13th Meeting of the Steering Committee for Bilateral Cooperation with Vietnam’s Deputy Prime Minister Pham Binh Minh, and met with Communist Party of Vietnam (CPV) General Secretary Nguyen Phu Trong and Prime Minister Pham Minh Chinh.
Wang Yi had paid official visits to all Southeast Asian states last year and early this year, except Vietnam.[1] Hanoi’s absence in Chinese leaders’ regional tours in the last two years was even more conspicuous given that Vietnam was the ASEAN Chair in 2020. During the same period, Hanoi hosted high-level visits by Japanese Prime Minister Suga and many cabinet members of the Trump administration.[2] Under Biden, the US continues to accord high priority to Vietnam in its Southeast Asia policy, as manifested in the Interim National Security Strategic Guidance,[3] and especially the two high-profile visits by Secretary of Defense Lloyd Austin and Vice President Kamala Harris in July and August 2021, respectively.
Wang Yi’s three-day visit to Hanoi, as compared to his shorter stops in Cambodia and Singapore, suggests Beijing’s imperative to make its presence felt in Vietnam. Why so and why now? How did the US factor weigh in China’s calculations towards Hanoi during this trip? This Perspective answers these questions by examining China’s motivation and messaging during the visit. It also discusses Hanoi’s statecraft in achieving its practical agenda from the visit while maintaining its balancing act between the great powers.
CHINA’S MOTIVATION AND MESSAGE: REASSERTING INFLUENCE
The Global Times ran an op-ed on 12 September titled “Wang Yi’s visit to neighbours expected to improve cooperation, not to counter US influence”.[4] In fact, improving China’s neighbourly relations and countering US influence should be mutually reinforcing from Beijing’s perspective. Vietnam remains a key partner for China in Southeast Asia. Both countries are putatively ideological allies; and Vietnam is currently China’s largest trading partner in ASEAN[5] and its sixth largest trading partner globally, with two-way trade turnover reaching US$133.09 billion in 2020.[6] At the same time, as an immediate neighbour to China, Vietnam’s defence policy and its positioning between China and America is critical to China’s security.
The fact that Wang Yi’s trip took place just two weeks after US Vice President Kamala Harris’ visit to Hanoi suggests the imperative for China to reassert its influence on Vietnam in the wake of perceptions about Hanoi’s ‘tilt’ towards Washington, which might have been amplified by high-level American visits. China’s sense of urgency has heightened in the context of increasing US-China strategic competition under the Biden administration, and advances in Vietnam-US relations. Wang’s priorities for his visit were: (i) Emphasising the ideological affinity; (ii) Stepping up vaccine diplomacy; and (iii) Warning on the South China Sea (SCS).
Emphasising the ideological factor
China defines its relations with Vietnam not only as “neighbouring states” but also as “comrades and brothers” anchored in ideological affinity and historical linkages. The Chinese leadership claims privilege in having a special conduit of leverage over Hanoi through party-to-party ties between the Communist Party of China (CPC) and the CPV. The CPC’s 100th anniversary and the CPV’s 13th National Congress this year provided a good context for Wang Yi’s emphasis on the two countries’ shared socialist ideology and political system during his visit. The news release of Wang Yi’s meeting with Pham Minh Chinh on the Chinese foreign ministry’s website said: “As both states are socialist countries led by the Communist Parties, reinforcing and revitalising socialist causes is the top priority in bilateral relations and the most significant and fundamental common strategic interests that both countries should insist on.”[7] The ideological tone was even more pronounced during Wang Yi’s meeting with party chief Nguyen Phu Trong: “China appreciates that General Secretary Nguyen Phu Trong published a signed article after the end of the 13th National Congress of the CPV, emphasising the inevitability and correctness of Vietnam’s adherence to the socialist path, which is of great significance for Vietnam to overcome various risks and challenges.”[8]
However, ideology was not on top of the mind of Vietnamese leaders during their exchanges with Wang Yi, judging from what was reported in Vietnamese media. The coverage of Wang Yi’s meeting with Pham Minh Chinh on the Vietnamese government’s online portal highlighted bilateral issues ranging from Covid-19 response and border trade to the SCS disputes, but contained hardly any ideological element.[9] The news release on the CPV’s online portal about Wang Yi’s meeting with Nguyen Phu Trong was also much less ideologically laden than the Chinese version. Trong was quoted as emphasising the need to “enhance high-level bilateral exchanges to promote friendship and political trust, improve the effectiveness of party-to-party cooperation mechanisms, and exchange of experiences in Party building and country governance”.[10]
Some commentators have noted that Trong’s meeting with Wang Yi – and highlighting that he did not meet Kamala Harris – indicates Vietnam’s unequal treatment of Beijing and Washington.[11] That reading is overstretched, given the absence of party links between America and Vietnam. In 2018, Trong did meet then-Secretary of State Mike Pompeo when he visited Hanoi. With Washington’s repeated commitments to respect Vietnam’s political system and its pragmatic approach towards Hanoi, US-Vietnam bilateral ties are increasingly defined by their converging security and economic interests rather than by ideological considerations. While the US-China rivalry has taken on stronger ideological overtones, Vietnam-US relationship continues on its upward trend regardless of ideological differences, suggesting diverging trajectories of US-China and US-Vietnam relations in the years ahead.
Stepping up vaccine diplomacy
Southeast Asia is a primary target of China’s vaccine diplomacy, accounting for 29% of its total vaccine donations and over 25% of its vaccine sales worldwide by June 2021.[12] Despite being the first-mover in vaccine offerings to other Southeast Asian countries, China’s vaccine outreach towards Vietnam got a fairly late start. In June, China donated 700,000 Sinopharm doses to Vietnam, and in August pledged two million more free doses. Chinese Ambassador to Vietnam Xiong Bo made this pledge just one day before Kamala Harris’ visit – a calibrated move to one-up the US, which donated one million Moderna doses during Harris’ trip to Hanoi.[13] Vietnam is among the top recipients of US vaccine donations, with 6 million doses by end-August 2021.[14]
Until mid-2021, Hanoi had not been enthusiastic about approaching China for vaccine support due to the prevalent distrust of Chinese vaccines among the Vietnamese public and concerns about their relatively lower efficacy.[15] However, by the time of Wang Yi’s visit, the Covid-19 situation had taken a tragic turn with massive spikes across Southern Vietnam, and the country was trying to secure any source of vaccine supply available. This provided a strategic window for China to extend its Covid-19 response support to Vietnam and play catch-up with Washington’s vaccine diplomacy in the country.
During his visit, Wang Yi announced Beijing’s donation of three more million doses to Vietnam. Three days later, China’s Guangxi province offered 800,000 Sinopharm doses together with medical equipment and supplies. This brings China’s total pledged vaccine donation to Vietnam to 6.5 million doses, exceeding that from the US. However, up to now, the Vietnamese government has not made any official deal to buy Chinese vaccines, except for the purchase of 13 million Sinopharm doses by a private company. The share of Chinese-made vaccines in Vietnam’s vaccine portfolio remains modest in terms of both purchase and donation.
Warning on the South China Sea
The sovereignty and maritime disputes in the SCS cast a long shadow on Vietnam-China relations, and there is little room for each party to moderate their respective positions and claims in order to reach a settlement. It is the single most important issue that drives Hanoi’s estrangement from Beijing. According to the State of Southeast Asia Survey 2021 by ISEAS –Yusof Ishak Institute, among Southeast Asians, Vietnamese are the most apprehensive about Chinese actions and the most welcoming to increased military presence by the United States and other powers in the SCS.
The SCS has become a key theatre of the Indo-Pacific geopolitical contest, with higher density and frequency of all major powers’ naval presence. Before and around the time of Wang Yi’s visit, the UK’s Carrier Strike Group-21 (CSG-21) had transited the SCS,[16] and the US’ Carl Vinson Carrier Strike Group (VINCSG) was still undertaking freedom of navigation operations in the area.[17] The CSG-21 and VINCSG, together with four other task groups from the US, Australia, Japan and India, are currently on their operational deployments in the Indo-Pacific to participate in a series of multilateral exercises, sending a clear deterrent signal to China’s maritime ambitions.[18] Notably, one of these task groups, the Australian Defense Force Indo-Pacific Endeavour 21 (IPE 21) is currently at Vietnam’s Cam Ranh Bay for a four-day visit.[19]
Such a crowded maritime domain set the stage for Wang Yi to urge Vietnam to “be alert in resisting interference and incitement from regional outsiders”, “treasure the hard-won peace and stability in the SCS”, and “not to complicate the conditions or magnify conflicts from unilateral moves”. While this talking point is not new, there was added urgency and fervency to the tone. It was as much a warning to Vietnam as a swipe at Kamala Harris’ call on Vietnam to join Washington in opposing China’s “bullying”.[20]
VIETNAM’S STATECRAFT: PRACTICAL AGENDA AND STRATEGIC HEDGING
On its part, hosting Wang Yi provided Vietnam with an opportunity to push its own agendas, including boosting ties with China, promoting practical cooperation to address its domestic concerns and existing issues in bilateral relations, and maintaining its strategic balance between the US and China.
Improving ties with China
Vietnam wanted to use Wang Yi’s visit to boost its ties with China, given that bilateral exchanges had been rather limited in 2020 despite it being the 70th anniversary of bilateral diplomatic relations. There was no direct meeting between the two countries’ high-level leaders throughout 2020. Not only Wang Yi but also Chinese Defence Minister Wei Fenghe and CPC foreign affairs chief Yang Jiechi skipped Vietnam in their regional tours. There were three main reasons for this: Covid-19 restrictions; differences on the SCS dispute;[22] and Vietnam’s preoccupation with the organisation of the CPV’s 13th National Congress.
China’s direct high-level engagements with Vietnam only resumed after the CPV’s 13th Congress concluded, with the visit by Chinese Minister of Public Security Zhao Kezhi in February followed by a visit by Minister of Defence Wei Fenghe in April. Wang Yi’s visit therefore provided Hanoi with another chance to continue its high-level engagements with Beijing, and to signal to China that Vietnam values its relationship with Beijing despite its frequency of exchanges with the US and its allies. Vietnamese leaders apparently tried to show Vietnam’s appreciation of bilateral ties by arranging for Wang Yi to be received by both General Secretary Nguyen Phu Trong and Prime Minister Pham Minh Chinh, in addition to his meetings with Deputy Prime Minister Pham Binh Minh and Foreign Minister Bui Thanh Son.
Promoting practical cooperation
Wang Yi’s visit also provided Vietnam with an opportunity to address its domestic concerns as well as existing issues in bilateral relations. Due to the latest surge of Covid-19 infections, Vietnam’s current top priority is to speed up its vaccination programme to contain the virus and facilitate economic reopening. The three more million vaccine doses pledged by Wang Yi, once delivered, will contribute to Vietnam’s vaccination drive. Vietnam’s aim is to inoculate up to 70% of its population by this year-end. On 10 September, the first day of Wang Yi’s visit, Vietnam’s Ministry of Health approved Hayat-Vax, a vaccine jointly produced by Sinopharm and G42 of the United Arab Emirates (UAE), for emergency use, suggesting that Hayat-Vax may be the vaccine donated by China. During Wang Yi’s visit, news of Hanoi using Sinopharm’s Vero Cell vaccine to inoculate its population was reported prominently by the local media.[23]
Other issues addressed during Wang Yi’s meetings with Vietnamese leaders included trade, infrastructure development and the SCS dispute. Vietnam is interested in maintaining stable trade flows and preventing any disruptions in the supply chain between the two countries; it also wants China to facilitate the import of Vietnamese agricultural products and help bring about a more balanced structure in bilateral trade. In terms of infrastructure development cooperation, Vietnam asked Beijing to bring the delayed Cat Linh-Ha Dong metro project in Hanoi and some other projects funded by Chinese loans into operation as early as possible.[24]
On the SCS issue, over the past twelve months, China has adopted a less aggressive approach towards Vietnam, with no major intrusion into Vietnamese waters being reported. This is notable given that Chinese intrusions and provocations in the waters of the Philippines, Indonesia and Malaysia have increased during the same period. However, this is likely a temporary lull, and Vietnam needs to work with China to manage future tensions and address remaining issues. For example, bilateral negotiations on the delimitation of the waters outside the mouth of the Tonkin Gulf have been stalled for years, while the Vietnam-China agreement on fishery cooperation in the Tonkin Gulf, which expired on 30 June 2020, has not been renewed. Wang Yi’s visit and direct meetings between the two delegations may help untangle these issues in a more efficient manner.
Strategic balance and hedging
Hanoi is keenly aware of China’s strategic anxiety with regard to the strengthening of Vietnam-US ties. Wang Yi’s visit was therefore an occasion for Vietnam to assure China of its non-aligned foreign policy. In response to China’s repeated incursions into Vietnam’s maritime zones in the SCS, Hanoi has been expanding security ties with the US and its allies, but is nevertheless still keen to maintain a balance between the two big powers. Hanoi’s reluctance to upgrade its relationship with Washington to the strategic partnership level despite the latter’s repeated requests[25] is an indication of Hanoi’s sensitivity to Beijing’s concerns.
That said, the brewing SCS dispute and the Vietnamese public’s longstanding distrust of China prompt the country to be cautious in its relations with Beijing. This means that while maintaining a stable, friendly and mutually beneficial relationship with China, Hanoi will continue to deepen ties with the US and its allies and partners to hedge against China’s behaviours. This was evident in Vietnam’s diplomatic activities before and during Wang Yi’s visit. Vietnam hosted defence secretaries of the US and the UK in July, and US Vice President in August. Most notably, Japanese Defence Minister Nobuo Kishi visited Vietnam on the same dates as Wang Yi. During Kishi’s visit, Vietnam and Japan signed an agreement on defence equipment and technology transfer, and announced plans to sign memorandums in military medicine and cybersecurity. The two sides also stated that they would bring their defence collaboration to a “new level”, moving beyond the bilateral scope to actively contribute to the peace and stability of the region and the international community.[26] Hosting Wang Yi and Nobuo Kishi concurrently suggests Vietnam’s conscious efforts to diversify its relations and maintain a strategic balance between the US, China and other major powers.
CONCLUSION
Over the past decade, Vietnam-China relations have gone through major ups and downs. Over the past year, with Beijing adopting a less aggressive stance towards Hanoi in the SCS, bilateral ties enjoyed a rare respite from tensions, and Wang Yi’s visit could add to this renewed momentum in the improvement of bilateral relations. That said, Vietnam-China relations are fundamentally constrained by strategic distrust over the SCS dispute. As soon as China resumes its incursions into Vietnamese waters, which can happen any time, the current trend of improvement in bilateral ties will reverse.
The intensifying China-US strategic competition is another challenge for Hanoi. Vietnam has so far been adroit in maintaining a balance between the two great powers but it may not be easy to sustain this going forward. If Washington and Beijing fail to get what they want from Hanoi, they may decide that it is not worthwhile to continue investing in their ties with Vietnam. As such, while Hanoi continues to nurture ties with both China and the US, it should also think forward and be prepared to make tough choices on certain specific issues in the future. These include, among others, continuation of hydrocarbon projects in its EEZ despite Chinese warnings and obstructions, response to the Quad’s overtures and US maritime initiatives such as the proposed Joint Statement of Maritime Principles for the Western Pacific,[27] and upgrading of ties with America to strategic partnership. More than ever, Vietnam’s foreign policy mantra, “firm in objectives, flexible in strategies and tactics”, is being put to test.
ISEAS Perspective 2021/124, 22 September 2021
ENDNOTES
[1] In October 2020, Wang Yi visited Cambodia, Laos, Thailand and Malaysia. In January 2021, he visited Brunei, Indonesia, Myanmar and the Philippines. Wang Yi met with Pham Binh Minh in the border province of Quang Ninh (Vietnam) in August 2020 to celebrate the 20th anniversary of the Vietnam-China land border treaty signing, but this event is not considered “an official visit”. See “Vietnam, China celebrate 20th anniversary of land border treaty signing”, Vietnamplus.vn,, 24 August 2020, https://en.vietnamplus.vn/vietnam-china-celebrate-20th-anniversary-of-land-border-treaty-signing/181767.vnp.
[2] These included the visits by Defence Secretary Mark Esper (November 2019), Secretary of State Mike Pompeo (October 2020) and National Security Adviser Robert O’Brien (November 2020).
[3] The White House, Interim National Security Strategic Guidance, 03 March 2021, https://www.whitehouse.gov/briefing-room/statements-releases/2021/03/03/interim-national-security-strategic-guidance/.
[4] Xu Keyue and Zhang Dan, “Wang Yi’s visit to neighbors expected to improve cooperation, not to counter US influence”, The Global Times, 12 September 2021,https://www.globaltimes.cn/page/202109/1234043.shtml.
[5] “Vietnam becomes China’s largest trade partner in ASEAN: Chinese diplomat”, Nhan Dan Online, 26 July 2018, https://en.nhandan.vn/business/item/6428702-vietnam-becomes-china%E2%80%99s-largest-trade-partner-in-asean-chinese-diplomat.html.
[6] “Vietnam becomes China’s sixth largest trading partner”, Nhan Dan Online, 19 January 2021, https://en.nhandan.vn/business/item/9513202-vietnam-becomes-china%E2%80%99s-sixth-largest-trading-partner.html.
[7] Ministry of Foreign Affairs of the People’s Republic of China, “Vietnamese Prime Minister Pham Minh Chinh Meets with Wang Yi”, 12 September 2021, https://www.fmprc.gov.cn/mfa_eng/zxxx_662805/t1906432.shtml.
[8] Ministry of Foreign Affairs of the People’s Republic of China, “General Secretary of the Communist Party of Vietnam Central Committee Nguyen Phu Trong Meets with Wang Yi”, 11 September 2021, https://www.fmprc.gov.cn/mfa_eng/wjdt_665385/wshd_665389/t1906423.shtml.
[9] “Thủ tướng Phạm Minh Chính tiếp Ủy viên Quốc vụ, Bộ trưởng Ngoại giao Trung Quốc”, baochinhphu.vn, 11 September 2021, http://baochinhphu.vn/Thoi-su/Thu-tuong-Pham-Minh-Chinh-tiep-Uy-vien-Quoc-vu-Bo-truong-Ngoai-giao-Trung-Quoc/446179.vgp.
[10] “Tổng Bí thư Nguyễn Phú Trọng tiếp Ủy viên Quốc vụ, Bộ trưởng Bộ Ngoại giao Trung Quốc”, dangcongsan.vn, 11 September 2021, https://dangcongsan.vn/thoi-su/tong-bi-thu-nguyen-phu-trong-tiep-uy-vien-quoc-vu-bo-truong-bo-ngoai-giao-trung-quoc-590720.html.
[11] “Ngoại giao Việt Nam ‘khôn khéo trước mọi đại cường’?”, BBC Tiếng Việt, 15 September 2021, https://www.bbc.com/vietnamese/vietnam-58559819.
[12] Khairulanwar Zaini, “China’s Vaccine Diplomacy in Southeast Asia – A Mixed Record”, ISEAS Perspective 2021/86 , 24 June 2021, /articles-commentaries/iseas-perspective/2021-86-chinas-vaccine-diplomacy-in-southeast-asia-a-mixed-record-by-khairulanwar-zaini/.
[13] John Haltiwanger, “Kamala Harris was en route to Vietnam to donate 1 million COVID-19 vaccines when China swooped in to one-up the US and offered 2 million shots”, businessinsider.com, 25August 2021, https://www.businessinsider.com/china-undercuts-kamala-harris-1-million-vaccine-donation-to-vietnam-2021-8.
[14] The White House, Remarks by Vice President Harris at the National Institute of Hygiene and Epidemiology in Hanoi, Vietnam, 25 August 2021, https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/08/26/remarks-by-vice-president-harris-at-the-national-institute-of-hygiene-and-epidemiology-in-hanoi-vietnam/.
[15] Hoang Thi Ha, “A Tale of Two Vaccines in Vietnam”, Fulcrum, 12 July 2021, https://fulcrum.sg/a-tale-of-two-vaccines-in-vietnam/.
[16] Latit Kapur, “Britain’s Return to the Indo-Pacific”, AMTI Update, 11 August 2021, https://amti.csis.org/britains-return-to-the-indo-pacific/.
[17] “Carl Vinson Carrier Strike Group Enters South China Sea”, pacom.mil, 08 September 2021, https://www.pacom.mil/Media/News/News-Article-View/Article/2768009/carl-vinson-carrier-strike-group-enters-south-china-sea/.
[18] Dzirhan Mahadzir, “6 Naval Task Groups From U.S., U.K., India, Japan and Australia Underway in Pacific”, USNI News, 30 August 2021, https://news.usni.org/2021/08/30/6-naval-task-groups-from-u-s-u-k-india-japan-and-australia-underway-in-pacific.
[19] “Nhóm tàu tác chiến Australia thăm Việt Nam”, Vietnamnet, 20 September 2021, https://vietnamnet.vn/vn/the-gioi/viet-nam-va-the-gioi/nhom-tau-tac-chien-australia-tham-viet-nam-776519.html.
[20] The White House, Remarks by Vice President Harris and President Phúc of the Socialist Republic of Vietnam in Hanoi, Vietnam, 24 August 2021, https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/08/24/remarks-by-vice-president-harris-and-president-phuc-of-the-socialist-republic-of-vietnam-in-hanoi-vietnam/.
[21] Sharon Seah et al., The State of Southeast Asia: 2021 (Singapore: ISEAS-Yusof Ishak Institute, 2021), /wp-content/uploads/2021/01/The-State-of-SEA-2021-v2.pdf.
[22] For example, due to China’s pressures, PetroVietnam cancelled production sharing contracts with Spanish firm Repsol in June 2020 and a drilling contract with Noble Corporation the following month. Both cases caused significant financial losses for Vietnam. See Le Hong Hiep, Vietnam: Managing Chinese Pressures around Vanguard Bank, ISEAS Commentary (2020/100), 23 July 2020, /media/commentaries/vietnam-managing-chinese-pressures-around-vanguard-bank/.
[23] See, for example, “Hà Nội tiếp nhận 1 triệu liều vaccine Vero Cell”, VnExpress, 9 September 2021, https://vnexpress.net/ha-noi-tiep-nhan-1-trieu-lieu-vaccine-vero-cell-4353544.html; “Cận cảnh người dân Hà Nội tiêm vắc-xin Vero Cell”, Nguoi Lao Dong, 11 September 2021, https://nld.com.vn/thoi-su/can-canh-nguoi-dan-ha-noi-tiem-vac-xin-vero-cell-20210910123856004.htm.
[24] “Bộ trưởng Ngoại giao Bùi Thanh Sơn hội đàm với Bộ trưởng Ngoại giao Trung Quốc Vương Nghị”, Vietnam Government Portal, 11 September 2021, http://baochinhphu.vn/Doi-ngoai/Bo-truong-Ngoai-giao-Bui-Thanh-Son-hoi-dam-voi-Bo-truong-Ngoai-giao-Trung-Quoc-Vuong-Nghi/446182.vgp
[25] “US V-P Kamala Harris urges more China pressure in meeting with Vietnam leader”, The Straits Times, 26 August 2021, https://www.straitstimes.com/world/united-states/us-to-offer-vietnam-more-covid-19-vaccine-help-as-kamala-harris-visits.
[26] Prashanth Parameswaran, “What’s in the Newly Regionalized Japan-Vietnam Defense Partnership?”, The Diplomat, 13 September 2021, https://thediplomat.com/2021/09/whats-in-the-newly-regionalized-japan-vietnam-defense-partnership/.
[27] The White House, Remarks by Vice President Harris and President Phúc of the Socialist Republic of Vietnam in Hanoi, Vietnam, 24 August 2021, op. cit.
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EXECUTIVE SUMMARY
- Consumer finance is a thriving sector that has been growing at an annual pace of 20 percent in Vietnam.
- Policy-makers and financial players promote consumer finance as an antidote to black credit gangs or usurious practices. However, banks and financial companies use controversial collection practices, including threatening borrowers’ relatives, friends and employers who are not legally liable for repaying the debt.
- Some financial companies such as FE Credit appear to go beyond conventional collection practices by hiring external collectors with ties to black credit gangs that harass borrowers and their personal connections.
- While these controversial collection practices support consumer finance by limiting non-performing loans in the banking system, they create discontent and public trust erosion in consumer finance.
- There is ambivalence among formal lenders when they employ extortionary collection practices that they officially denounce, which is characteristic of transitional countries.
* Nicolas Lainez is Visiting Fellow at ISEAS – Yusof Ishak Institute. Trinh Phan Khanh lives in Hanoi and is a recent political science graduate from Leiden University, specializing in international relations. Bui Thi Thu Doai lives in Hanoi and is studying towards a BA in Development and Economics at the London School of Economics. Tô Thu Phuong lives in Hanoi and holds a Bachelor in Human Rights and Political Science from Columbia University and Sciences-Po Paris. Le To Linh lives in West Virginia and is studying International Studies at Hollins University. Emmanuel Pannier is a Research Fellow at the French National Research Institute for Sustainable Development (IRD).
INTRODUCTION
Vietnam is experiencing a consumer finance boom. This recent development raises an interesting paradox. On the one hand, state and financial actors promote consumer finance as a tool to consolidate financial institutions, depersonalize credit relations, and eradicate an ‘archaic’ yet persistent informal sector typified by ‘black credit’ gangs and personalized credit relations.[1] On the other hand, banks and financial companies (fincos) harass borrowers’ social connections who are not legally responsible for repaying their debt. Moreover, fincos may hire debt collectors connected to black credit gangs to collect bad debt using heavy-hand tactics. This paradox reveals an ambivalence in the consumer finance sector, a double standard of formal lenders when they employ collection practices that they themselves denounce as informal and coercive when such methods are similarly applied by moneylenders.[2]
The implementation of these practices in the face of policy discourse and legal efforts to eliminate them both supports and subverts consumer finance development. While they allow banks and fincos to comply with non-performing-loan (NPL) regulations and limit credit risk, they also cause discontent and erode public trust in consumer finance.
Data for this article comes from in-depth interviews conducted in-person and online with 36 informants from Hanoi and Ho Chi Minh City. The convenience sample comprised 14 bankers working for public banks, joint-stock banks and fincos, and 22 borrowers who took consumer loans. Among these borrowers, 13 took cash loans and instalment plans from FE Credit, the leading and most controversial financial company in Vietnam.
THE BLURRING OF FORMAL LENDING AND INFORMAL PRACTICES
The harassment of borrowers’ personal networks and the use of strong-arm collection practices by formal fincos such as FE Credit have been causing public concern in Vietnam for years.[3] This anxiety echoes a deeper worry about informal ‘black credit’ gangs being involved in ‘loan sharking’ activities. In the past decade, these gangs have proliferated to fill an unmet demand for flexible consumer loans, which formal lenders seek to address as well. Policy-makers, developers and financial players make a clear distinction between informal and formal lending. They describe moneylending as an outdated subsistence economy based on personalized, unregulated and coercive credit relations. This ‘backward’ credit system should be replaced with an optimized market system based on depersonalized, regulated and sustainable credit relations.[4] The controversy around black credit gangs originates in their high-interest rates and the use of strong-arm recovery methods involving borrowers and their close relatives and associates. Our empirical evidence and hundreds of news clips, YouTube videos and Facebook groups show that formal lenders are known to recover bad debt in a seemingly similar manner.
When a client misses a payment, in-house collection departments from banks and fincos start by sending reminders and notices. If the client ignores the messages, collectors contact borrowers’ referees to gather information about their motive for being late and incite repayment. Petrolimex Group, a public bank that provides secured loans to low-risk clients, sends reminders five days before and after the payment date, investigates the client through phone and home visits up to ten days after the payment date, and from day 11 onwards, requires the late client to sign a commitment form. According to a senior officer from Petrolimex, at this stage, “If the client still couldn’t come through, we will take more serious actions, such as going to the client’s workplace or calling their family and relatives to remind them of the debt if the client refuses to cooperate”.
Fincos proceed in the same way. However, they may also hire aggressive external collectors. VPBank’s consumer finance branch, FE Credit, leads the consumer finance market. It has a database of 14 million customers and a consumer debt market share of 55 per cent. It applies similar collection practices as banks; it escalates harassment and threats against late payers during the first 60 days, calling up to 30 times and sending dozens of text messages a day. After 60 days, the file is passed to the litigation service which, depending on the profit to be made, will sue the borrower or commission or sell the bad debt to a third party. Often organized by black credit gangs, external collectors use non-physical violence to retrieve bad debt. Along recovery stages, both in-house and external collectors pressure borrowers’ personal networks. A typical early call or text message says, “this person hasn’t paid, we urge his relatives to remind him”. Subsequent messages become rude, insulting and threatening. Relatives and friends from sampled late payers received extortionary messages saying, “if you don’t pay, I will come to your house to kill you”, “we will cut the heads, arms, legs of your children out in the streets”. They could not always determine if these threats come from in-house or external collectors.
Collection practices also involve defamation campaigns on social media carried out by external collectors. Late payers may find manipulated photos of themselves wearing a prison uniform with messages such as “this is a debtor who refuses to pay up” circulating on their Facebook and Zalo pages. For instance, Duc took a VND35 million cash loan from FE Credit to open a restaurant that went bankrupt because of Covid-19 lockdowns. After missing a payment for five days, FE Credit sent him messages accusing him of ‘fraudulent crimes and appropriation of property’ and threats of “a market-hammer nature, that if I read them out loud, it would be very trembling to hear”, as mentioned by Duc. The most devastating action was the circulation of manipulated pictures of his sister on an altar of the dead and his wife dressed as a prostitute on his Facebook and Zalo pages.
Harassment has devastating effects on borrowers’ associates. They often carry messages asking them to repay the debt. Ngân, a woman working in a hospital, contracted TB and missed payment for a cash loan from FE Credit. After harassing her son, “they told me that if I was unable to pay, I needed to tell my family to do so on my behalf”. Her son agreed to repay two instalments before running out of cash.
Collectors can also propose new lines of credit to late payers to settle their arrears. Informants have reported being offered loans from FE Credit’s in-house collectors and external collectors in collaboration with small loan companies and pawnshops.
CONTROVERSIAL COLLECTION SUPPORTS CONSUMER FINANCE
Banks and fincos appear to operate at any cost and by any means to address NPLs. In 2008, in the aftermath of the global financial crisis, economic growth and consumption crashed, the economy experienced double-digit inflation, and a property bubble burst, leaving Vietnamese banks with high NPL ratios. Between 2011 and 2015, the State Bank enforced Decision 254/QD/TTG to restructure the financial system, stabilize credit institutions, and decrease NPL ratios. It also created the Vietnam Asset Management Company (VAMC) in 2013, a public company designed to purchase NPLs and keep their ratio below three percent in the banking system. In exchange, it provides credit institutions with special recapitalization bonds from the State Bank. After five years, banks must repurchase NPLs. All these efforts led to a significant drop in the general NPL ratio: 4,08 percent in 2012, 3.25 in 2014, 2.55 in 2016, 2.4 in 2018, and 1.6 in 2020.[5]
The economic fallout of the Covid-19 pandemic has revived concerns over NPLs.[6] Fitch-rated local banks reported a 45 percent surge in past-due loans in the first quarter of 2020 relative to the end of 2019.[7] The State Bank issued Circular 01/2020/TT-NHNN in March 2020, requiring credit institutions to restructure repayment periods, waive and reduce interest and fees, and maintain bad debt classification to support Covid-19-affected borrowers.[8] However, the NPL ratio continued to rise in the first nine months of 2020. Data from 17 listed commercial banks points to an increase of 30.7 percent in NPLs compared to the end of 2019, totaling VND97,280 billion and a ratio of 1.8 percent[9]. The NPL ratio is higher for FE Credit. This finco announced a pre-tax profit of VND3.713 trillion (US$161.43 million), down 16.3 per cent on-year, and an increase in NPL from 6 to 6.6 percent from December 2019 to December 2020.[10] In the first half of 2021, it jumped to 9.1 percent from 7.7 percent at the end of the first quarter.[11] As a result, the NPL ratio of VPBank rose to 3.46percent in March 2021, including bad debt from FE Credit.[12] To further support distressed borrowers, the State Bank issued Circular 03/2021/TT-NHNN in March 2021, which reinforces the provisions of Circular 1 and encourages lenders to make provisions for potentially unrecoverable loans within three years.[13] Circulars 01 and 03 keep NPL ratios below three percent. However, bad debt classifications can temporarily conceal a much higher NPL ratio in the banking system.[14]
In this constraining environment, banks and fincos use various methods to limit credit risk and NPLs. These include harassing borrowers’ associates, and for fincos, hiring controversial external collectors. Policy-makers and financial players associate these practices with informality, backwardness and danger if they are carried out by moneylenders. However, informality does not equate to illegality. Banks and fincos exploit legal loopholes and weak enforcement to recover bad debt. Debt collection was loosely regulated in Vietnam until recently. In the face of scandals and dozens of YouTube videos about FE Credit’s aggressive tactics that sparked public anger,[15] the State Bank issued Circular 18/2019/TT-NHNN in 2019. It provides that fincos can only call debtors and send reminders no more than five times a day from 7 am to 9 pm. In addition, collection activities must exclude any ‘organization or person who does not have debt repayment obligation’ to the finco, i.e., familial and social networks. However, our data show that banks and fincos continue to harass borrowers and their associates.
Another recent legislation, the Investment Law 61/2020/QH14, banned debt collection services since 1 January 2021. Fincos can no longer commission or sell bad debt to external collectors. To circumvent the law, collectors create other business models and conceal their activities. They enter into debt trading agreements with lenders, which do not involve ‘buying and selling bad debt’.[16] External collectors are useful to fincos because they are not bound by regulations such as Circular 18/2019/TT-NHNN and, therefore, enjoy more leeway to recover bad debt. Their debt recovery ratio is 90 percent compared to 50 percent for judgment enforcement agencies.[17] In short, external collectors do the dirty work that financial companies such as FE Credit cannot do due to regulations. Since debt collection is crucial to limit NPLs, the involvement of borrowers’ personal connections in credit transactions and heavy-handed collection support consumer finance development.
CONTROVERSIAL COLLECTION UNDERMINES CONSUMER FINANCE
These collection practices also foment discontent and erode public trust in consumer finance. Banks and fincos apply contract law to define legal obligations, responsibilities and binding rights with borrowers. They cannot hold borrowers’ associates legally accountable, but can nevertheless exert pressure by circumventing regulations and exploiting familistic practices.
Familism is a welfare regime whereby the family unit ensures its social reproduction, including dealing with its members’ problems.[18] Banks and fincos assume that the family as a whole strongly feels obliged to repay outstanding loans. This belief is well entrenched in the banking sector. A loan officer from Shinhan Finance, a small finco, explained that, “The way I see it, this is cultural. The Vietnamese family is usually pretty tight-knit, right? Vietnamese are affectionate, so if you cannot pay for the debt and your parents are harassed, you would feel really guilty, right? You would feel unfilial and at fault. Therefore, you would try to pay the debt as soon as possible so that your loved ones wouldn’t be harassed anymore. It all comes down to culture and tradition”.
Borrowers tend to have mixed feelings about the informal sharing of financial responsibilities. Families may play the lenders’ game and let individual loans become family issues; under heavy harassment, they devise strategies to repay arrears which might reinforce family ties. However, in-house and external collectors’ practices can also generate stress, conflict, anger and guilt among relatives, friends, acquaintances, colleagues and employers. When Quyen, a senior executive from PetroVietnam, was harassed by FE Credit, one of his employees took a VND50 million cash loan without informing him and missed payments. He first received gentle calls asking him to interfere. Seeing that he ignored requests, collectors made calls and sent text messages every few minutes all day long. Harassment ceased when he interfered. He complained that his colleagues in leadership positions face harassment for loans they are not aware of. He called for more regulations on debt collection as “the act of incessant texting to terrorize an individual is illegal. It does not comply with the law, which leads to terrorism”. Other informants have expressed unease at being caught in collection procedures unrelated to them.
Familistic and heavy-handed collection methods also erode borrowers’ moral obligation to repay debt and lenders’ legitimacy to claim repayment. Tuan, a delivery man from Hanoi, took two cash loans from FE Credit: a VND36 million and a VND50 million to repay the first loan and cover urgent expenses. After 15 months of steady repayment, he missed payments for the second loan due to income loss amid Covid-19 restrictions. FE Credit in-house and external collectors harassed him: “For me, there’s no problem with reminders but it’s different once collectors insult me and threaten to kill my child”. They also harassed three relatives: “They insulted them, forced them to tell me to repay. It had a lot of negative impact on my workplace and my family”. Eventually, he evaded his debt: “Presently, I don’t want to deal with it nor do I need to. Since they feel no responsibility to their customers, I don’t need to deal with it”. His anger at FE Credit took a more political turn. He joined Facebook groups where members share advice on how to deal with aggressive collection methods and went as far as to create a group focusing on “FE’s terrors and threats”.
There are hundreds of similar Facebook groups where disgruntled borrowers and their families pour out their grievances, provide mutual support, share tips on dealing with lenders and collectors, and even conspire to deceive and strike back against lenders. These groups focus on FE Credit and obscure lending apps operated by black credit gangs and unlicensed loan companies, known for being more aggressive than fincos such as FE Credit.[19] The harassment of borrowers’ associates and strong-arm collection methods undeniably undermine public trust in consumer finance and obfuscates the official narrative presenting consumer finance as the perfect antidote against black credit.
CONCLUSION
Consumer finance raises high expectations and heated controversy in Vietnam. It has the potential to include millions of unbanked consumers in credit markets, foster formalization and eliminate black credit. At the same time, controversial collection methods challenge official legitimizing narratives and breach public trust in consumer finance. This ambivalence is characteristic of transitional societies where formal rules and laws are underenforced and desynchronized with informal norms and practices.[20] Controversial collection practices may resist articulation in dominant discourses and persist as a way to ‘get things done’ to develop consumer finance and limit NPLs. They also highlight mechanisms of informal influence on the emergence, the shaping of credit institutions, and the production of adaptation and resilience strategies to manage rules aimed at fostering formalization.
From a policy perspective, the government should extend its capacities to regulate debt collection and support the nascent collection industry emerging from the black credit world. Law enforcement is key to succeed. It is also a challenge knowing that external collectors operate in a legally grey area. Regulations on debt collection should strike a balance between consumer finance expansion and consumer protection, as well as the moral and contractual obligation to repay a loan and respectful and sustainable financial practices. Amending regulations on debt collection might compel banks and fincos to review their practices and abide by the law. Yet these amendments may be slow in bringing tangible results, especially in the pandemic setting where loan delinquency and NPLs are on the rise. They could also slow consumer finance development and trigger adjustments of informal and/or unregulated collection practices around legal and political constraints. For legal amendments to succeed, policy-makers, financial players and consumers should launch a debate about the role of the family and familistic practices in supporting consumer finance and financialization in Vietnam. To what extent should the family be involved in private credit transactions? Should formal rules prevail over informal practices? Is Vietnam ready for prioritizing formality and the rule of law at the expense of informality and informal practices? If Vietnamese families are unhappy about becoming responsible for individual loans, why are they taking loans and playing the lenders’ game? From this perspective, legal amendments and public debate are equally important.
ISEAS Perspective 2021/122, 16 September 2021
ENDNOTES
[1] Nicolas Lainez, “Debunking the Informal Credit Myths: Is Credit Liberalization the Magic Solution to Loan Sharking?,” Perspective (Singapore: Institute of Southeast Asian Studies, 2019).
[2] On the concepts of ‘ambivalence’ and ‘informality’, see Alena V. Ledeneva, How Russia Really Works: The Informal Practices That Shaped Post-Soviet Politics and Business, Culture and Society after Socialism (Ithaca: Cornell University Press, 2006); Alena Ledeneva, Global Encyclopaedia of Informality, Volume 1: Towards Understanding of Social and Cultural Complexity. (London: UCL Press, 2018), https://www.jstor.org/stable/10.2307/j.ctt20krxh9.
[3] Nicolas Lainez, Phuong To Thu, and Doai Bui Thi Thu, “Lending Apps in Vietnam: Facebook Groups Offer Guidance, Comfort and Contention to Borrowers in Jeopardy,” Perspective (Singapore: ISEAS, May 28, 2021).
[4] T. Nhung and T. Khang, “‘Black-Credit’ Lenders Pose Serious Threat to Borrowers,” VietnamNet, May 28, 2021, https://vietnamnet.vn/en/feature/black-credit-lenders-pose-serious-threat-to-borrowers-740855.html; Thanh Nien News, “”Black Credit’ a Serious Danger amid Economic Slowdown,” Thanh Nien News, October 28, 2011; for a summary, see Lainez, “Debunking the Informal Credit Myths: Is Credit Liberalization the Magic Solution to Loan Sharking?”.
[5] Anh Thi Van Tran, Nhung Thi Nguyen, and Tu Thi Thanh Tran, “Dealing with Non-Performing Loans During the Bank Restructuring Process in Vietnam: Assessment Using the AHP and TOPSIS Methods,” Gadjah Mada International Journal of Business 22, no. 3 (December 24, 2020): 324, https://doi.org/10.22146/gamaijb.44453. The spectacular drop of NPLs should be interpreted with caution, though. Since VAMC is a warehousing structure to temporarily house NPLs before returning them to the bank’s balance sheets, the NPL ratio could be higher than official figures.
[6] Bao Saigon, “Pandemic Can Worsen Bad Debt Situation,” Vietstock.Vn, February 10, 2020, https://en.vietstock.vn/2020/10/pandemic-can-worsen-bad-debt-situation-37-421692.htm.
[7] FitchRatings, “Surging Bad Loans Aggravate Vietnam Banks’ Capital Challenges,” Fitch Ratings, May 6, 2020, https://www.fitchratings.com/research/banks/surging-bad-loans-aggravate-vietnam-banks-capital-challenges-06-05-2020.
[8] Moodys, “SBV Amends Measures to Support Recovery from COVID-19 Pandemic,” Moodys Analytics, May 8, 2020, https://www.moodysanalytics.com/regulatory-news/may-08-20-sbv-releases-measures-to-address-impact-of-covid-19-pandemic.
[9] “Bank Non-Performing Loans Ratio to Reach over 3% in 2021,” VietnamCredit.Com, November 11, 2020, https://vietnamcredit.com.vn/news/bank-non-performing-loans-ratio-to-reach-over-3-in-2021_14201.
[10] VIR, “FE Credit Experiences 16.3 per Cent Drop in Pre-Tax Profit as NPLs Increase in 2020,” Vietnam Investment Review, February 6, 2021, https://vir.com.vn/fe-credit-experiences-163-per-cent-drop-in-pre-tax-profit-as-npls-increase-in-2020-82526.html. By the end of first quarter of 2021, the NPL ratio for VPBank reached 3.46percent because it included the NPLs from FE Credit, see Intellasia, “Many Banks Early Make Provisions to Avoid Bad Debt Shocks,” May 29, 2021, https://www.intellasia.net/many-banks-early-make-provisions-to-avoid-bad-debt-shocks-913947.
[11] VIR, “Consumer Finance in Major Tie-up Tendency,” Vietnam Investment Review, August 19, 2021, https://vir.com.vn/consumer-finance-in-major-tie-up-tendency-86774.html.
[12] Intellasia, “Many Banks Early Make Provisions to Avoid Bad Debt Shocks.”
[13] Vietnam+, “Debt Classification Policy Extended to Aid Customers Impacted by Pandemic,” April 6, 2021, https://en.vietnamplus.vn/debt-classification-policy-extended-to-aid-customers-impacted-by-pandemic/199637.vnp.
[14] Viet Nam News, “SBV Considering Proposal for Developing Framework for Tackling NPLs,” Viet Nam News, July 28, 2021, https://vietnamnews.vn/economy/998435/sbv-considering-proposal-for-developing-framework-for-tackling-npls.html.
[15] Countless videos about FE Credit’s controversial collection methods are available on YouTube: https://www.youtube.com/results?search_query=fe+credit.
[16] Thi Hoa Pham, “Concerns over Prohibition against Debt Collection Service,” Lexology, August 31, 2020, https://www.lexology.com/library/detail.aspx?g=461beaeb-451d-4db6-89ff-486e7bd3d9d1.
[17] Ibid.
[18] Nicolas Lainez, “Par-delà la traite des femmes vietnamiennes en Asie du Sud-Est. Anthropologie économique des carrières intimes” (PhD dissertation in Anthropology, Paris, École des hautes études en sciences sociales, 2015), https://halshs.archives-ouvertes.fr/tel-01183507/document; Magali Barbieri and Danièle Bélanger, eds., Reconfiguring Families in Contemporary Vietnam (Stanford: Stanford University Press, 2009).
[19] Lainez, To Thu, and Bui Thi Thu, “Lending Apps in Vietnam: Facebook Groups Offer Guidance, Comfort and Contention to Borrowers in Jeopardy.”
[20] see Ledeneva, How Russia Really Works; Ledeneva, Global Encyclopaedia of Informality, Volume 1.
| ISEAS Perspective is published electronically by: ISEAS – Yusof Ishak Institute 30 Heng Mui Keng Terrace Singapore 119614 Main Tel: (65) 6778 0955 Main Fax: (65) 6778 1735 Get Involved with ISEAS. Please click here: /support | ISEAS – Yusof Ishak Institute accepts no responsibility for facts presented and views expressed. Responsibility rests exclusively with the individual author or authors. No part of this publication may be reproduced in any form without permission. © Copyright is held by the author or authors of each article. | Editorial Chairman: Choi Shing Kwok Editorial Advisor: Tan Chin Tiong Managing Editor: Ooi Kee Beng Editors: William Choong, Lee Poh Onn, Lee Sue-Ann, and Ng Kah Meng Comments are welcome and may be sent to the author(s). |
EXECUTIVE SUMMARY
- Consumer finance has grown rapidly in Vietnam despite millions of its citizens being unbanked.
- A key prerequisite for boosting consumer finance and financial inclusion is the application of credit scoring technologies in the lending process.
- Credit scoring technologies have expanded considerably in Vietnam, owing to the production of credit data, technological improvements, and the digitalization of the economy.
- Consumer lenders continue to face challenges in deploying credit scoring, in particular for verifying applicants’ identity and income data, and assessing creditworthiness.
- Lenders take variegated approaches to data verification and risk assessment, which involve statistical models, machine learning analytics and human discretion.
- The application of credit scoring in consumer finance raises important technical and policy issues related to effectiveness, miscalculation, data privacy, data protection and cyber security.
* Nicolas Lainez is Visiting Fellow at ISEAS – Yusof Ishak Institute. Trinh Phan Khanh lives in Hanoi and is a recent political science graduate specializing in international relations from Leiden University. Bui Thi Thu Doai lives in Hanoi and is studying towards a BA in Development and Economics at the London School of Economics. Tô Thu Phuong lives in Hanoi and holds a Bachelor in Human Rights and Political Science from Columbia University and Sciences-Po Paris. Le To Linh lives in West Virginia and is studying International Studies at Hollins University. Emmanuel Pannier is Research Fellow at the French National Institute for Sustainable Development and is based in Hanoi in the University of Social Sciences and Humanities.
INTRODUCTION
Financial inclusion and consumer finance are hot topics in Vietnam, with the government and the consumer finance industry seeking to include millions of unbanked citizens in financial markets and to facilitate access to consumer loans.
Credit scoring is a prerequisite for financial inclusion as it helps lenders determine borrowers’ creditworthiness – or the likelihood they will repay a loan – and standardize and enhance lending decisions. This scoring technology has expanded considerably in Vietnam in recent years, owing to the production of a broader variety of traditional and alternative data, a rising demand for enhanced computing ability brought by machine learning analytics, and the digitalization of the economy boosted by the Covid-19 pandemic. Consumer lenders increasingly use credit scoring to accept or reject loan applicants, determine loan pricing, and tailor financial products and recovery strategies. However, they encounter challenges when deploying this technology at scale due to a pervasive lack of knowledge where customers with no credit history are concerned.
This article describes the challenges lenders encounter in verifying personal and income data and assessing applicants’ creditworthiness, and the solutions they use to address these obstacles and gain competitiveness in a thriving consumer finance market.
Credit scoring has policy implications. It is essential for policy makers to understand the effectiveness and accuracy of this technology and to address possible errors and miscalculations in risk assessment and in the sanctioning of consumer credit. In addition, the production of traditional and alternative data for scoring purposes raises concerns about data privacy, protection and security. These issues can put borrowers at risk and hamper financial inclusion.
Data for this article comes from in-depth interviews conducted in-person and online with 36 informants from Hanoi and Ho Chi Minh City. The convenience sample comprises 14 bankers working for public banks, joint-stock commercial banks and financial companies, and 22 borrowers who took consumer loans, including twelve informants who purchased vehicles and electronic devices on instalment plans or obtained cash loans from FE Credit, the leading financial company in Vietnam.
KNOWING CUSTOMERS AND ASSESSING CREDIT RISK
Vietnam has been consolidating its financial sector within the last three decades, moving from centrally planned goals to an independent industry guided by local and global market forces[1]. Today, Vietnam’s banking sector comprises a broad mix of players: large state-owned banks such as BIDV, Vietcombank and Vietinbank; smaller joint-stock commercial banks including VPBank, PVCombank and Sacombank; foreign banks such as ANZ, Citibank and Shinhan Bank; and financial companies including FE Credit, Home Credit, HD Saison, and Shinhan Finance. These actors are boosting consumer finance and bombarding consumers with offers for secured and unsecured loans sent via SMS, phone calls, emails and social media[2]. This sector was virtually non-existent a decade ago. With an average annual growth rate of 20 per cent, it has grown steadily to account for 20.5 per cent of the total outstanding loans in the economy, 2.5 times higher than the figures in 2012.[3] However, it only accounts for 8.7 per cent of the total outstanding loans if housing loans are excluded, far behind Malaysia, Thailand and Indonesia, where consumer finance (excluding mortgage) accounts for 15 to 35 per cent of the total outstanding balance. Therefore, comparatively speaking, consumer finance still has much room for growth in Vietnam[4]. However, obstacles stand in the way of consumer lenders, including information asymmetry and sheer uncertainty.
Consumer lenders operate in a challenging environment marked by high financial exclusion. Today, between 61[5] to 70 per cent[6] of Vietnam’s 98 million population still have no bank accounts and credit history. This situation results from a long-standing lack of trust in the banking system after years of changes in government, and inflation bounds. Today, banks and financial companies strive to show transparency and change public attitudes, especially among young people.[7] They also entice new customers by offering high – yet volatile – interest rates for saving accounts, which the Covid-19 pandemics have brought close to zero, to support the economy.[8] Meanwhile, the preference for cash and gold transactions remains strong.[9] To curb these trends, the government has recently approved the national inclusive finance strategy to raise the percentage of adults with bank accounts to 80 per cent by 2025.[10] Meanwhile, financial exclusion remains a significant obstacle for consumer lenders and credit bureaus, including the Credit Information Center (CIC).[11] the national credit bureau under the State Bank, and the Vietnam Credit Information Joint Stock Company (PCB). Credit bureaus are expanding their activities and databases, but still lack credit data about tens of millions of citizens.
This lack of knowledge transpires in customer identification – or KYC for Know Your Customer – procedures, an issue rooted in administrative problems. To identify loan applicants, lenders require identification documentation such as an updated ID and household certificate. However, not all applicants can provide proper documentation. Many internal migrants cannot secure temporary residence or modify the address in their household certificate.[12] In addition, citizens can have multiple IDs with different numbers. The recent shift from IDs with nine digits to IDs with 12 digits has led to confusion and fraudulent use of loopholes. A senior officer from the CIC mentioned that “borrowers may try to conceal their information by using different papers to try and apply for different loans”. He pointed out the existence of a black market for genuine and counterfeit IDs, and the fact that lenders do not share information about fraudulent applicants for the Ministry of Public Security to press charges and for credit bureaus to flag them. As a result, identification fraud proliferates due to a lack of government agency coordination. The National Population Database in the Ministry of Public Security is currently building a unified database based on new identity cards with 12 digits, a chip, and a QR code. This system will significantly improve customer identification. Meanwhile, lenders and credit bureaus will continue to struggle to identify borrowers, exposing lenders to fraud risk.
To determine applicants’ creditworthiness, make credit appraisals, and to get to know their customers, lenders assess their income situation as well. Collecting and verifying labour and income data can be challenging as not all workers have contracts and records for their income, in particular informal workers. While big companies pay salaries through bank transfers, smaller companies mix bank and cash payments, and informal employers use cash payments only. The second and third scenarios are challenging for lenders. In addition, some applicants embellish their loan applications by manipulating data and forging certificates. For example, in order to secure a mortgage without having a recorded income, an informant deposited money in her bank account and asked a friend for help: “I called up my friend like: ‘sign me a labour contract, make me a salary table’. I crafted my own application: a salary table, with bonuses, a title, back then I said I was ‘Head of Sales’, which means I get a manager’s salary… So, I made up all of that, typed it up, printed it, estimated the amount of money, gave it to my friend who had it signed and stamped”. Another conundrum lenders face is worker’s unstable career paths and income, especially those of many informal workers who live day by day.[13] Financial companies target these risky customers whereas banks focus on smaller but growing groups of urban, highly-educated and middle-class workers who build linear and future-oriented careers.[14] Overall, high financial exclusion, administrative barriers, informality and precarity generate uncertainty, exacerbate risk and slow consumer finance growth. However, the under-development status of consumer finance in a country with a hundred million citizens offers excellent prospects for profit and expansion.
SOLUTIONS FOR KNOWING CUSTOMERS AND ASSESSING CREDIT RISK
For consumer finance to thrive and reach millions of banked and unbanked customers in Vietnam, consumer lenders race to improve know-your-customer (KYC) procedures, build customer knowledge, and standardize credit scoring tools. Scoring systems are not homogeneous across the banking industry. Most public and joint-stock commercial banks provide housing, car, credit card and a limited range of unsecured loans to low-risk customers with stable income positions. On the contrary, financial companies such as FE Credit take a riskier approach and offer instalment plans, cash and credit card loans to millions of unbanked, low-income and ‘at-risk’ consumers. Overall, depending on their size, status, risk appetite and business model, banks and financial companies use different tools to know their customers, assess their creditworthiness and mitigate risk through pricing.
Many banks use traditional economic data and regression models to rank applicants. The Bank for Investment and Development (BIDV), a large state-owned bank founded in 1957 and a major player in retail banking, is breaking into the consumer finance sector by providing home, car, overseas education, and instalment loans to low-risk customers. According to a branch office manager, BIDV offers unsecured loans and credit cards to known customers. The requirement is that the customer opens a salary-receiving account to monitor cash flows and to set up automatic monthly deductions. To generate risk scores, BIDV uses a three-page long table with over 50 lines. Variables include demographic data (age, marital status, number of children, education level, etc.), labour status, income and repayment capacity (spouse who may contribute to repayment, debt burden ratio, and whether income is transferred through a bank or not, etc.), standing loans (with BIDV and other lenders), financial situation (savings), credit and payment history with BIDV if relevant, and other lenders based on reports from the CIC.[15] All these data facilitate credit appraisal. BIDV’s scoring table is under permanent revision to match evolving policies from the State Bank and market conditions. Other public and joint-stock banks apply similar credit scoring systems based on a limited number of economic variables and regression models. These lenders have a moderate risk flavour, meaning they prioritize secured loans and choose customers with low-risk profiles.
Financial companies like FE Credit, the consumer finance branch of VPBank, holds a more aggressive and technologically-oriented approach. In 2010, FE Credit was the first credit institution to target risky yet lucrative segments ignored by banks, and to offer an array of financial products to the masses. In 2020, it held a database of 14 million customers and a consumer debt market share of 55 per cent, with a total outstanding loans value of VND66 trillion. FE Credit performs traditional KYC procedures based on paperwork and personification. It also checks through referees. As standard practice, it requires applicants to provide the details of two to three referees, preferably close relatives, friends and employers. This KYC verification procedure based on personal networks has shortcomings as applicants may provide fake referees.
FE Credit has a first-mover advantage. It asserts its dominance by investing in risk methods based on traditional and alternative data and machine learning analytics. It takes advantage of the recent introduction of digital technologies and high internet penetration rate to glean traditional and alternative data from consumers in order to assess risk.[16] FE Credit’s risk assessment model combines multiple scores that help draw intimate ‘customer portraits’. The in-house score is based on demographic data, ID documents, and labour and income data. Brokers provide additional data on taxable income, social insurance, phone number registration, and debt status with unofficial credit providers for verification purposes. While many banks purchase scoring models based on standard sets of variables from foreign providers like McKinsey, FE Credit has developed an in-house model based on insights from its Vietnamese customers. This model takes into account its customers’ unique characteristics including identification and fraud issues, labour precarity, and income instability. This in-house score determines the interest rate, ranging from 20 to 40 per cent per annum, which also depends on loans’ characteristics and package. It complements other data for appraisal, including the amount requested, down payment if relevant, the proportion of the loan relative to the good’s price, and the value of the debt contract.
FE Credit also relies on a vendor score based on behavioral data provided by Trusting Social, a fintech start-up based in Hanoi and Singapore. This firm gleans call/SMS metadata (when, where and how long), top-up data and value-added service transactions to determine borrowers’ income, mobility patterns, financial skills, consumption profile, social capital and life habits. In addition, FE credit uses two other risk scores that are new to Vietnam. The first is a fraud score to detect suspicious behaviour and fraudulent orders based, for instance, on fake identification. The second is a repayment score based on behavioural data about the customer’s interaction with the firm that helps in determining an optimal recovery strategy. To analyze data and generate scorecards, FE Credit uses machine learning analytics. This technology allows for adjusting the inputs (variables) to maximize the outputs (scores). The most predictive variables inform selections and decisions for each case.
Despite their popularity, not all banks use regression and machine-learning tools to rank applicants. A case in point is Shinhan Bank Vietnam, a subsidiary of Shinhan Bank Korea. This bank has recently entered the burgeoning consumer finance sector in Vietnam. It proposes housing, car and unsecured loans to qualified low-risk customers, and conducts credit appraisal based on four criteria: character, collateral, loan purpose, and financial situation including ‘bad debt’ history. As opposed to most consumer lenders, Shinhan Bank does not use credit scoring to assess applicants’ creditworthiness. According to a loan appraisal officer, its thorough appraisal process suffices to limit risk. However, Shinhan Bank plans to improve its risk management tools while keeping non-performing loans low.
Another case worth mentioning is Shinhan Finance, a small financial company tied to Shinhan Card Korea, which originated from the acquisition of Prudential Vietnam Finance in 2019. Shinhan Finance provides cash loans to workers who can prove their salary and who work for ‘red listed’ companies whose workers show low delinquency rates. Although it markets its unsecured credit offer as ‘salary-based loans’, it does not collateralize workers’ salaries. According to a credit support officer, Shinhan Finance’s philosophy is that, “if you don’t have enough money to live, how could you have money to repay loan interest?”. To apply for loans of up to 6-8 times their salary, workers must provide an ID, a household registration certificate and income proof. They must also agree to meet a loan officer for an interview. The lender requires referees for data verification. Like Shinhan Bank, Shinhan Finance does not use credit scoring to assess risk. It relies on appraisal based on the employer’s status, the applicant’s credit and ‘bad debt’ history with other banks and Shinhan Finance if relevant, and officers’ evaluation.
Shinhan thus seeks a reliable consumer base, which is likely to be unbanked, at the cost of having less market share. Altogether, whereas FE Credit leverages alternative data and machine-learning analytics to improve customer knowledge and risk prediction, and lend money to millions of unbanked consumers, Shinhan Finance challenges the standardization of statistically based and automated scoring systems by prioritizing income levels and human discretion to cater to a small customer base. The variety of risk assessment models and technologies shows that lenders go through an intense phase of experimentation, competition and adaptation to a relatively nascent environment.
CONCLUSION
This article described the variegated approaches to data verification and creditworthiness assessment that Vietnamese lenders adopt to address technical obstacles and position themselves in a rapidly expanding consumer finance market. It showed that this emerging sector is large and untapped enough to cater to diverse risk philosophies, technologies and procedures incorporating human discretion, regression models and cutting-edge machine learning analytics.
Credit scoring raises important technical issues in Vietnam. This technology has made substantial progress in turning radical uncertainty caused by high financial exclusion into calculable and priceable risk. However, credit scoring is subject to a permanent process of contestation and improvement[17] and its efficiency and accuracy are contingent upon available data and evolving political, economic and regulatory conditions.[18] Besides, the transfer of credit scoring technologies designed in rich countries like South Korea and Singapore to emerging economies like Vietnam raises technical challenges. Global standard models often rest on assumptions that do not apply to Vietnam, such as labour and income stability, data verification ease, and availability of credit history data.[19]
Credit scoring also raises a string of policy issues. Since the technology is imperfect and there is a lack of sufficiently large numbers of past observations for extrapolations about the future, we should expect lenders to make miscalculations and errors and for them to require adjustment and experience if they are to rank tens of millions of citizens who are new to consumer finance. The regulator has a key role to play. Vietnamese law requires creditors and regulators to continually assess and categorize debtors and loans in risk categories. However, it does not adequately protect borrowers from miscalculation and sensitive groups (the poor, women, ethnic and religious groups, etc.) from unfair discrimination and rejection. The advent of credit scoring based on alternative data and machine-learning analytics raises new concerns about opacity, algorithmic discrimination, and the loss of individual autonomy and privacy.[20] The current regulation on credit scoring is unprepared to deal with the challenges raised by machine-learning analytics. However, the State Bank is launching a pilot regulatory sandbox programme for five key fintech sectors, including machine learning-based credit scoring.[21] We can only hope that the regulator and consumer lenders realize the urgent need to update regulation on credit scoring and to find a balance between efficiency in risk prediction and consumer protection.
ISEAS Perspective 2021/112, 24 August 2021
ENDNOTES
[1] Jens Kovsted, John Rand, and Finn Tarp, From Monobank to Commercial Banking: Financial Sector Reforms in Vietnam (Singapore: NIAS Press, Institute of Southeast Asian Studies, 2004).
[2] In addition, digital lenders including peer-2-peer platforms provide microloans to consumers through easy-to-use apps.
[3] Van Luc Can, “Landscape Shift in Consumer Finance,” Vietnam Investment Review, March 30, 2021, https://vir.com.vn/landscape-shift-in-consumer-finance-83411.html.
[4] Ibid.
[5] Hai Yen Nguyen, “Fintech in Vietnam and Its Regulatory Approach,” in Regulating FinTech in Asia, ed. Mark Fenwick, Steven Van Uytsel, and Bi Ying, Perspectives in Law, Business and Innovation (Singapore: Springer, 2020), 124.
[6] World Bank, The Little Data Book on Financial Inclusion 2018 (Washington DC: World Bank, 2018), 160
[7] Allison Truitt, “Banking on the Middle Class in Ho Chi Minh City,” in The Reinvention of Distinction: Modernity and the Middle Class in Urban Vietnam, ed. Van Nguyen-Marshall, Lisa B. Welch Drummond, and Danièle Bélanger, ARI – Springer Asia Series (Dordrecht: Springer Netherlands, 2012), 129–41
[8] Vietnam+, “Deposit Interest Rate Proposed to Gradually Lower to 0 Percent,” Vietnam+, June 25, 2021, https://en.vietnamplus.vn/deposit-interest-rate-proposed-to-gradually-lower-to-0-percent/203622.vnp.
[9] Allison Truitt, “Banking on Gold in Vietnam,” Journal of Cultural Economy 14, no. 4 (July 4, 2021): 403–15
[10] VNA, “PM Ratifies National Financial Inclusion Strategy until 2025,” Vietnam Investment Review, February 3, 2020, https://www.vir.com.vn/pm-ratifies-national-financial-inclusion-strategy-until-2025-73554.html.
[11] The CIC gathers credit data from 30.8 million individuals with existing credit history and provides credit reports to consumer lenders.
[12] World Bank, VASS, Vietnam’s Household Registration System (Hanoi: Hong Duc Publishing House, 2016); see Nicolas Lainez et al., “‘Easy to Borrow, Hard to Repay’: Credit and Debt in Ho Chi Minh City’s Sex Industry,” Research Report no. 5 (Ho Chi Minh City: Alliance Anti-Trafic, 2020).
[13] Nicolas Lainez, “Treading Water: Street Sex Workers Negotiating Frantic Presents and Speculative Futures in the Mekong Delta, Vietnam,” Time & Society 28, no. 2 (2019): 804–27; Lainez et al., “‘Easy to Borrow, Hard to Repay’: Credit and Debt in Ho Chi Minh City’s Sex Industry.”
[14] Catherine Earl, Vietnam’s New Middle Classes: Gender, Career, City (Copenhagen: NIAS Press, 2014).
[15] The CIC separates Non-Performing-Loans (NPL) or ‘bad debt’ (nợ xấu) from borrowers into five groups: 1 (‘current’, debt is overdue less than ten days), 2 (‘special mentioned’, debt is unpaid from 10 to 90 days), 3 (‘sub-standard’, debt is overdue 91 to 180 days), 4 (‘doubtful’, debt is due from 181 to 360 days) and 5 (‘loss’, debt is overdue more than a year). Lenders reject borrowers from groups 3, 4 and 5, and may consider those in group 2, depending on their risk appetite. Credit blacklisting lasts for two years after the borrower has paid off an arrear.
[16] In 2016, Vietnam’s internet penetration rate had reached 52 per cent while smartphone ownership 72 and 53 per cent in urban and rural areas, respectively (Nguyen, Hai Yen. 2020. “Fintech in Vietnam and Its Regulatory Approach.” In Regulating FinTech in Asia, edited by Mark Fenwick, Steven Van Uytsel, and Bi Ying, 121. Singapore: Springer).
[17] Donncha Marron, “‘Lending by Numbers’: Credit Scoring and the Constitution of Risk within American Consumer Credit,” Economy and Society 36, no. 1 (February 2007): 103–33
[18] C. Zaloom, “How to Read the Future: The Yield Curve, Affect, and Financial Prediction,” Public Culture 21, no. 2 (April 1, 2009): 245–68.
[19] Dawn Burton, “Credit Scoring, Risk, and Consumer Lendingscapes in Emerging Markets,” Environment and Planning A: Economy and Space 44, no. 1 (January 2012): 111–24
[20] Nicolas Lainez, “The Prospects and Dangers of Algorithmic Credit Scoring in Vietnam: Regulating A Legal Blindspot,” Regional Economic Studies Working Series (Singapore: ISEAS, 2021), /category/articles-commentaries/iseas-economics-working-papers/.
[21] Linh Chi Dang and Mai Nhu Thuy Pham, “Vietnam’s Evolving Regulatory Framework for Fintech,” Perspective, no. 75 (June 7, 2021): 10.
| ISEAS Perspective is published electronically by: ISEAS – Yusof Ishak Institute 30 Heng Mui Keng Terrace Singapore 119614 Main Tel: (65) 6778 0955 Main Fax: (65) 6778 1735 Get Involved with ISEAS. Please click here: /support | ISEAS – Yusof Ishak Institute accepts no responsibility for facts presented and views expressed. Responsibility rests exclusively with the individual author or authors. No part of this publication may be reproduced in any form without permission. © Copyright is held by the author or authors of each article. | Editorial Chairman: Choi Shing Kwok Editorial Advisor: Tan Chin Tiong Managing Editor: Ooi Kee Beng Editors: William Choong, Lee Poh Onn, Lee Sue-Ann, and Ng Kah Meng Comments are welcome and may be sent to the author(s). |
EXECUTIVE SUMMARY
- In a bid to offer a counter narrative to Western media, China has cranked up its efforts to propagate its own views on various fronts abroad. Armed with ample resources and muscular capacity, Beijing has orchestrated a well-coordinated campaign to shape narratives on platforms such as Twitter, Facebook and YouTube. It also marshals different sophisticated methods such as the use of an army of fake accounts to amplify the narratives dictated at home.
- But where Vietnam is concerned, China has found it challenging to sway the local media and information landscape. Several factors account for this, including the entrenched anti-China sentiments within Vietnam, the ownership, control structure and censorship of the Vietnamese media, and characteristics of Vietnam’s social media landscape that are not conducive for China’s efforts to weaponize Twitter, which is otherwise its main platform for online messaging.
- Facebook has thus become the platform of choice for China to shape its online messaging and to conduct its public diplomacy engagement efforts in Vietnam
- In comparing Facebook posts by the Chinese embassy and consulate with the U.S. embassy and consulate over a seven-month period, several intriguing observations emerge. A key tenet of China’s public diplomacy efforts in Vietnam has been to peddle anti-America narratives. Meanwhile, the U.S. has been more inclined to highlight issues such as education and culture. Also, whenever Washington did trade verbal barbs with Beijing on social media, the former often prevailed, as Vietnamese public sentiments show.
- Findings from the comparative analysis of all those Facebook posts suggest that it would be a risky bet for China to continue dialling up its blistering anti-America indictment in Vietnamese cyberspace, even when it adopts a more engaging approach to communicate its messages. By and large, the Vietnamese public shows a tendency to appear more receptive to U.S. narratives.
* Dien Nguyen An Luong is Visiting Fellow with the Media, Technology and Society Programme at ISEAS – Yusof Ishak Institute. A journalist with significant experience as managing editor at Vietnam’s top newsrooms, his work has also appeared in the New York Times, the Washington Post, the Guardian, South China Morning Post, and other publications. The author would like to thank Ms Lee Sue-Ann and Dr Le Hong Hiep for their constructive comments and suggestions.
INTRODUCTION
As the U.S.-China rivalry for global public opinion heats up,[1] Beijing has constantly had to walk a very fine line between toughing out Western criticism and sprucing up a “credible, lovable and respectable” image.[2] That undertaking means China has to placate a nationalist domestic audience while avoiding estranging foreign supporters abroad.
In 2009, China reportedly began to pump billions of dollars into boosting its global state media presence.[3] The ultimate goal is to shape a narrative in foreign countries that benefits China. 2013 was considered a critical juncture as President Xi Jinping launched a multi-pronged campaign designed to “tell China’s story well” globally.[4] Xi has also since then stressed that China needs to “increase [its] soft power, give a good Chinese narrative, and better communicate China’s messages to the world.”[5]
But in recent years, China’s authoritarianism, its treatment of the Uyghurs, its crackdown on dissent in Hong Kong, and the Covid-19 pandemic have all combined to send global views of Beijing plummeting to unprecedented lows.[6] This is the context in which China has doubled down on its efforts to propagate its own version of the story on various fronts in a bid to offer a counter narrative to Western media. That was reiterated in a speech Xi made in early June where he stressed that China needed to build a “credible, lovable and respectable” image abroad, adding that the country was engaged in a “public opinion struggle.”[7]
As part of the state-orchestrated campaign to “tell China’s story well” to the world,[8] a bevy of Chinese diplomats, state media outlets and academics have become increasingly vocal and frequent in defending China’s policies in cyberspace. They have focused on excoriating the ills and double standards in the U.S. and its allies, and pushing back against what is perceived to be Western prejudices and stereotypes of their country. Such “Wolf Warrior” diplomacy, named after two Rambo-style Chinese box offices,[9] has drawn widespread ire for what critics call an abrasive, defiant and combative approach. The message is crystal clear, however: China is set to take up the gauntlet of standing up to the U.S.
But perhaps beset by hubris, China has blended its domestic and foreign propaganda policies even though the target audiences could not be more different. The blistering anti-America approach appears to be working well at home, but whether it sells abroad is another story. That question looms all the more large in Vietnam, where one poll after the next have shown that Washington is favoured over Beijing.[10] In that context, even though its criticism of the American agenda is not always utterly groundless, China’s messages risk being a hard sell in Vietnam.
This paper addresses these questions: How has Beijing propagated its narrative in a country where anti-China sentiments have not only permeated public discourse but are also deeply embedded in the Vietnamese psyche?[11] How receptive are social media-savvy Vietnamese netizens to China’s online messaging, compared with U.S. online messaging? What observations can we make of China and U.S. online public diplomacy strategies in winning over the hearts and minds of Vietnamese?
HOW CHINA SELLS
It is social media that has become China’s key battlefield for public opinion. Beijing’s propaganda machine has sought to make the most of Western media platforms, which are otherwise banned at home, to telegraph and amplify its official line on global affairs and current events to a broader international audience.[12] Such manipulation of online discourse has become more or less institutionalized with Twitter, Facebook and YouTube becoming China’s platforms of choice since 2017.[13] China’s global propaganda machine has functioned around this modus operandi: The party line dictated by the Ministry of Foreign Affairs and state media outlets is picked up and spread by Chinese diplomats and diplomatic missions around the world.
China has been able to deliver some results on both the mainstream media landscape and the cybersphere. Two surveys by the Brussels-based International Federation of Journalists attest to how China has significantly escalated its global media outreach. According to the first survey which was released in 2020, a total of 58 journalist unions polled from 58 different countries said the most widely reported form of Chinese outreach was journalistic exchanges and training schemes.[14] Those programmes were overwhelmingly described as “a positive experience.”
The other survey, released last May, also found journalist unions in more than half of 50 different countries confirming that coverage of China in their national media had been more positive since the start of the Covid-19 pandemic.[15] In other words, as the pandemic started to spread, China marshalled its existing media dissemination channels in developing countries to burnish its image as a reliable partner there. That mission has been accomplished apparently with a sleight of hand, however. According to the latest survey, besides propaganda, China has also sought to cultivate and shape its own narratives through the use of new tactics such as disinformation and misinformation. Many pro-China pundits have also raised hackles for allegedly resorting to conspiracy theories or disinformation to peddle Beijing-sanctioned narratives. To China and its cheerleaders, in the battle to massage public thinking, “relying on logic and facts does not always work.”[16]
Such dynamic came to the fore in cyberspace.A seven-month investigation by the Associated Press and the Oxford Internet Institute found thatan army of fake accounts have been most active in retweeting Chinese diplomats and state media to the tune of “thousands of times.”[17] In doing so, those accounts have played a crucial role in amplifying China’s propaganda to an audience that could reach the size of hundreds of millions. More importantly, they did so without necessarily divulging that the content is state-sponsored. According to the joint study, the investigation marked for the first time the large-scale inauthentic amplification that has “broadly driven engagement across official government and state media accounts.” Key issues that Beijing sought to highlight to sway public opinion included its core strategic interests such as Taiwan, Hong Kong and Xinjiang.
But against that backdrop, Beijing’s recipe for success elsewhere could risk turning out to be a debacle in Vietnam, where anti-China sentiments have percolated and been amplified in public discourse.
IS THE VIETNAM PUBLIC BUYING IT?
In fact, anti-China sentiments have thwarted Beijing’s repeated attempts to shape its narrative in Vietnam’s mainstream media, according to a 2020 study by the Washington-based Center for Naval Analysis.[18] The reasons: Anti-China sentiments, compounded by a “hostile media environment” that was fuelled chiefly by historical Sino-Vietnamese conflicts, contemporary grievances and a genuine lack of public interest in Chinese propaganda, have blunted the promotion of China’s narratives in Vietnam, according to key findings of the study. Vietnamese authorities sometimes even calibrated media coverage to exhibit a harder stance on China with regards to maritime territorial disputes, the study said.
Deep anti-China sentiments aside, another stumbling block to China’s efforts to shape the media environment in Vietnam is ironically the structural similarities between the two ideological allies. Internet censorship, strict media controls and ownership limitations have shut major avenues for Chinese companies to penetrate the Vietnamese market. Chinese-language editions have been subject to state control and censorship. Government policies and regulations have neutered China’s largesse, weaponized in many other countries to sway editorial decisions and agendas. Licensing requirements have also constrained the number of foreign journalists and media bureaus – Chinese included – in the country. In a nutshell, China’s playbook is more limited in Vietnam than elsewhere.
In the online sphere, while much of Beijing’s “Wolf Warrior” diplomacy has played out on Twitter,[19] Vietnam’s social media landscape has throttled China’s efforts to weaponize the platform to propagate its messages. Various statistics confirm that Facebook, Google’s YouTube and Zalo have been the most popular social media platforms in Vietnam.[20] (Zalo is Vietnam’s premier chatting app, launched in 2012 and currently boasting around 64 million users.[21) In that context, Facebook has become the only remaining platform available for China to shape its online messaging in Vietnam.
U.S.-CHINA RIVALRY FOR PUBLIC OPINION ONLINE
Like Chinese diplomats, the U.S. diplomatic corps has also turned to Facebook, which has between 60 to 70 million active users in Vietnam,[22] as the main venue for engaging with the Vietnamese public. This section examines the issues and key messages that the U.S. and China have telegraphed to the Vietnamese audience in the online sphere by analysing the contents of all posts on the Facebook pages of both diplomatic missions during the first seven months of this year. It also examines how receptive the Vietnamese public has been to such public diplomacy efforts by both superpowers. The topics of discussion are classified into five categories: Diplomacy & Politics, Economy & Trade, Education & Culture, Recruitment, and Vaccine Diplomacy.
An analysis of those Facebook posts and their public engagements suggests the following characteristics:
- Between January to July, the U.S. embassy and consulate had a total of 1,155 posts covering five topics, nearly double those on the Facebook pages of the Chinese embassy and consulate (601).
- China’s public diplomacy narratives in Vietnam have mostly peddled anti-America messages, focusing on reinforcing centrally directed messages from the Ministry of Foreign Affairs and state news outlets. Meanwhile, the U.S. employed a different tack, focusing less on U.S.-China tensions than on promoting a range of other issues with the Vietnamese. But when Washington did trade verbal barbs with Beijing on social media, the former often prevailed, going by Vietnamese public sentiments.
- The dominant theme the U.S. sought to highlight was Education & Culture, accounting for 68% of the total number of online posts. On the other hand, Diplomacy and Politics makes up the major chunk (64%) of the total number of China’s Facebook posts (Figure 1).
- But even though the U.S. generated the most content on Education & Culture issues, public eyeballs lay elsewhere. An analysis of the top three most-engaged posts during the seven-month period showed that Facebook posts by the U.S. that attracted the most attention belonged to the Diplomacy & Politics category. Interestingly, public engagements zeroed in on the very theme China sought to propagate its narratives on: the anti-American trope.
The focus on the Education & Culture theme crystalizes how the U.S. has sought to cash in on its soft power to win public hearts and minds in Vietnam, a move that dovetails with facts on the ground. One poll after the next has attested to the strong positive sentiments among Vietnamese toward the U.S. and its image – no matter who the U.S. president is. For instance, while – according to a 2017 Pew survey[23] – the image of the U.S. deteriorated sharply across the globe during the first year of the presidency of Donald Trump, popularity ratings only increased in Vietnam and Russia.
That positive perception has barely changed. The desire to live, study and settle down in the U.S. has remained palpable among ordinary Vietnamese. According to most recent data from the U.S. Student and Exchange Visitor Program, Vietnam had sent nearly 26,000 students to the U.S., ranked fifth among countries with the most students at American educational institutions.[24] This has enabled Vietnam to distinguish itself from Southeast Asian peers to be the top source of students in the region for the U.S.. Vietnamese, along with the Chinese and Indians,[25] have formed the biggest chunk of applicants for the EB-5 visa scheme, which offers foreign investors a fast path to a green card by investing at least $500,000 to finance a business employing at least 10 American workers. Meanwhile, Vietnamese megacities such as Hanoi or Ho Chi Minh are awash with Americano-philia: A get-together at Starbucks or an overnight queue just to get the latest iPhone version is considered emblems of chic Americanism and a tech-savvy lifestyle.
FIGURE 1. KEY THEMES PROMOTED ONLINE BY THE U.S. AND CHINA
That is the context to which U.S. online messaging hones in on how crucial a role education and culture can play in boosting bilateral ties. The “master narrative” comprises three key messages:
- The United States is a prosperous, democratic and modern country, buttressed by a developed economy and an advanced education system.
- The U.S. provides ample resources and opportunities for those who seek to hone their soft skills or further their studies in the States. America has always played an instrumental role in helping Vietnamese youth compare notes with their peers from all over the world on various fronts.
- Educational and cultural exchanges have proven to be and will always be a welcome and useful bridge between the U.S. and Vietnam.
But based on the analysis of the top three most engaged Facebook posts by the U.S. from January to July this year, it was the category of Diplomacy & Politics that attracted the most public attention. The engagements in the Education & Culture category even trailed behind Recruitment (Figure 2).
FIGURE 2. MOST ENGAGED FACEBOOK POSTS BY THE U.S.
While the contents on the Facebook pages of the U.S. embassy and consulate have been almost identical, that is not the case when it comes to how China has allocated its resources for online messaging. Since last year, the Chinese embassy has refrained from posting provocative statements that are vulnerable to popular backlash. Meanwhile, the Chinese consulate has made the most of satirical illustrations, parodies, memes and sarcastic language to practice “whataboutism” to serve a dual purpose: defend China’s official line and castigate the American agenda. Practically, “whataboutism” means “raising a supposedly analogous issue in response to a perceived hypocrisy or inconsistency.”[26] This tactic is part and parcel of a uniform bandwagon that Chinese officials have jumped on to deflect Western criticism.[27]
Several prominent issues in which Beijing looked to hammer home the party line and ramp up condemnation of the U.S. and its allies include: (i) China’s stance on the U.S. presidential election,[28] (ii) China seizing on the mob attack at the U.S. Capitol on January 6 to mock America’s support of global protest movements including those in Hong Kong in mid-2019,[29] and (iii) China bristling at U.S. criticism of its treatment of Uyghurs in Xinjiang.[30] The “master narrative” of those posts consists of three key messages:
- On the world stage, China is a more responsible and constructive player than the U.S., including in the fight against Covid-19.
- It is the U.S., not China, that has been the purveyor of most humanitarian disasters with its “aggressive wars” and military interventions over many decades.[31]
- America’s domestic and foreign policies are a travesty of what it has been trying to preach to the rest of the world about freedom, dignity and human rights.[32] The U.S. does not have the qualification to lecture China from a position of strength.[33] Neither do its allies.
The Diplomacy & Politics category also elicited the most online engagements from January to July. (Figure 3)
FIGURE 3. MOST ENGAGED FACEBOOK POSTS BY CHINA
Based on an analysis of the degree of public reactions to all Facebook posts by the U.S. and China during the January-July period, two key takeaways are distilled (Figure 4):
- The Chinese embassy incurred the most “Angry” emojis while its consulate had the most “Haha” ones, even though they both sought to propagate the same narratives. One possible explanation for this discrepancy perhaps lies in the fact that the online messaging employed by the Chinese consulate was more engaging to social media-savvy users.
- The U.S embassy and consulate attracted the most “Love” emojis, suggesting the public found their messages more appealing than those from their Chinese counterparts.
FIGURE 4. Public reactions to U.S. and China’s online messaging
When both countries seek to burnish their vaccine diplomacy campaigns on Vietnamese cyberspace, the U.S. beat China by a wide margin in terms of positive public reactions, emblematic of how the Vietnamese public prizes American vaccines over Chinese shots.[34] Such sentiments were reflected in an analysis of Facebook posts and their average engagements on vaccine diplomacy which were among the most engaged content from January to July (Figure 5).
FIGURE 5. PUBLIC SENTIMENTS ON U.S.-CHINA VACCINE DIPLOMACY
A BITTER PILL FOR CHINA
Findings from the comparative analysis of Facebook posts suggest that it would be a risky bet for China to continue dialling up its blistering anti-America indictment in Vietnamese cyberspace. Souring Sino-Vietnamese ties in recent years, fuelled chiefly by Beijing’s muscle-flexing moves in the South China Sea[35] and its damming of the Mekong River,[36] has exacerbated anti-China sentiments in Vietnam. This dynamic has whetted Vietnam’s appetite for closer defence and economic ties with the U.S..[37] Poll after poll have also corroborated that the Vietnamese public overwhelmingly favour Washington as a hedge against Beijing. In the State of Southeast Asia 2021 survey, published in February by Singapore’s ISEAS – Yusof Ishak Institute, Vietnamese – along with Filipinos – register the most palpable levels of distrust toward China in the region.[38] Those who distrust China think Beijing could wield its economic and military power to threaten their country’s interests and sovereignty. According to the same survey, Vietnamese are most leery of China’s growing strategic clout, yet most supportive of American influence in Southeast Asia.
Two waves of online backlash against China’s anti-America narrative in Vietnamese cyberspace last year are likely to have served as a bitter pill for Beijing to swallow.
In July 2020, the Facebook page of the Chinese embassy in Hanoi caused an online stir after posting a note from the Global Times editor Hu Xijin, sternly warning Vietnam not to side with the U.S. to contain China.[39] In the note, which appeared on the occasion of the 25th anniversary of U.S.-Vietnam bilateral ties, Hu minced no words in pointing to the U.S.’s “malicious intent” on pitching Hanoi against Beijing. The note also reminded the Vietnamese people of how the U.S. could pull the rug out from under Vietnam’s feet. In the wake of a public furor, the note was soon taken down.[40]
In what amounted to an ideological confrontation four months later,[41] the U.S. and China posted statements that accused each other of destabilizing the global order on the Facebook pages of their respective embassies.[42] What stood out was how the online community reacted to the diplomatic brickbat. In the comment sections of those Facebook posts, those who appeared to be Vietnamese Internet users overwhelmingly cheered on the U.S. statement while sneering at China’s response to it. This was reflected in the most-used keywords in all comments on both Facebook posts. Online reaction to the U.S. post centred on either pro-America or anti-China sentiments, such as “God bless America”, “Thank you, President Trump”, “China is the nightmare of the world” or “[China] robbed Vietnam of its islands.” Meanwhile, China-bashing comments dominated the online response to the Chinese statement, such as “No one believes in China”, “China is a hypocrite” or “China, shut up.”
A “LOVEABLE” CHINA IN VIETNAM? NOT SO FAST
China is unlikely to dial back its nationalistic rhetoric on foreign policy, for various reasons. Chief among them is that any effort to do so could be crippled by the nationalist fervour at home. In a speech that marked the centenary of the founding of the Chinese Communist Party on July 1, Xi Jinping reiterated that the country would not back down from any fight where China’s sovereignty and interests were threatened, warning against “foreign forces” that stand in the way.[43]
But as this study has shown, China might at some point wish to tone down its “chest-thumping” stance, as this seems to have been counter-productive at least where the Vietnamese audience is concerned. When it comes to the goal of making its image more “loveable” in Vietnam, it seems that Beijing still has a long way to go.
ISEAS Perspective 2021/109, 17 August 2021
ENDNOTES
[1] Teddy Ng and Laura Zhou, “US-China infowar escalates as America deploys task force in battle for power and influence”. South China Morning Post, 4 May 2021. https://www.scmp.com/news/china/military/article/3132184/us-china-infowar-escalates-america-deploys-task-force-battle
[2] “Xi Jinping calls for more ‘loveable’ image for China in bid to make friends”. BBC News, 2 June 2021. https://www.bbc.com/news/world-asia-china-57327177
[3] Danson Cheong, “The art of making China lovable”. The Straits Times, 21 June 2021. https://www.straitstimes.com/opinion/the-art-of-making-china-lovable
[4] J. Szczudlik, “‘Tell China’s Stories Well’: Implications for the Western Narrative,” Pol. Inst. Int. Aff. PISM, vol. 9, no. 169, p. 11, 2018.
[5] Wilson Center, “China’s Soft Power Campaign”, 2020. https://www.wilsoncenter.org/chinas-soft-power-campign
[6] Charissa Yong, “Global views of China remain negative, but Singapore an exception”. Straits Times, 1 July 2021. https://www.straitstimes.com/world/united-states/global-views-of-china-remain-negative-but-singapore-an-exception
[7] Xi Jinping calls for more ‘loveable’ image for China in bid to make friends”. BBC News, 2 June 2021. https://www.bbc.com/news/world-asia-china-57327177
[8] “China’s Xi urges state media to boost global influence”. Reuters, 19 February 2016. https://www.reuters.com/article/us-china-media-idUSKCN0VS1IF
[9] Katsuji Nakazawa, “China’s ‘wolf warriors’ take aim at G-7”. Nikkei Asia, 13 May 2021. https://asia.nikkei.com/Editor-s-Picks/China-up-close/Analysis-China-s-wolf-warriors-take-aim-at-G-7
[10] Mengzhen Xia and Dingding Chen, “China and the US: Who Has More Influence in Vietnam?”. The Diplomat, 21 May 2021. https://thediplomat.com/2021/05/china-and-the-us-who-has-more-influence-in-vietnam
[11] Charles Dunst, “Chinese aggression pushes Vietnam ever closer to Washington”. Nikkei Asia, 6 April 2021. https://asia.nikkei.com/Opinion/Chinese-aggression-pushes-Vietnam-ever-closer-to-Washington
[12] Z. A. Huang and R. Wang, “Building a Network to ‘Tell China Stories Well’: Chinese Diplomatic Communication Strategies on Twitter,” Int. J. Commun., vol. 13, p. 24, 2019
[13] Erika Kinetz, “Army of fake fans boosts China’s messaging on Twitter”. Associated Press, 29 May 2021. https://apnews.com/article/asia-pacific-china-europe-middle-east-government-and-politics-62b13895aa6665ae4d887dcc8d196dfc
[14] International Federation of Journalists, “Telling China’s Story: Reshaping The World’s Media”, 2020. https://www.ifj.org/fileadmin/user_upload/IFJ_ChinaReport_2020.pdf
[15] International Federation of Journalists, “The Covid-19 Story: Unmasking China’s Global Strategy”. 2021. https://www.ifj.org/fileadmin/user_upload/210512_IFJ_The_Covid_Story_Report_-_FINAL.pdf
[16] Danson Cheong, “The art of making China lovable”.
[17] Marcel Schliebs, Hannah Bailey, Jonathan Bright, Philip N. Howard. “China’s Public Diplomacy Operations: Understanding engagement and inauthentic amplification of PRC diplomats on Facebook and Twitter.” Working Paper 2021.1. Oxford, UK: Programme on Democracy and Technology, Oxford University, 2021. https://demtech.oii.ox.ac.uk/china-public-diplomacy-report.
[18] Ryan Loomis and Heidi Holz, “China’s Efforts to Shape the Information Environment in Vietnam”, Center for Naval Analysis (2020): 48. https://www.cna.org/CNA_files/PDF/IIM-2020- U-026222- Final.pdf
[19] Chun Han Wong and Chao Deng, “China’s ‘Wolf Warrior’ Diplomats Are Ready to Fight”. Wall Street Journal, 19 May 2020. https://www.wsj.com/articles/chinas-wolf-warrior-diplomats-are-ready-to-fight-11589896722
[20] Leading active social media platforms among Internet users in Vietnam as of 4th quarter of 2020. Statista, March 2021, https://www.statista.com/ statistics/941843/vietnam-leading-social-media-platforms
[21] Thảo Nguyên, “Zalo trở thành ứng dụng nhắn tin được yêu thích nhất Việt Nam” (Zalo becomes Vietnam’s Most Favorite Messaging App”. Thanh Nien, 4 June 2021. https://thanhnien.vn/cong-nghe/zalo-tro-thanh-ung-dung-nhan-tin-duoc-yeu-thich-nhat-viet-nam-1393656.html
[22] James Pearson, “How Vietnam’s ‘influencer’ army wages information warfare on Facebook”. Reuters, 9 July 2021. https://www.reuters.com/world/asia-pacific/how-vietnams-influencer-army-wages-information-warfare-facebook-2021-07-09
[23] Richard Wike, Bruce Stokes, Jacob Poushter And, Anell Fetterolf, “Trump Unpopular Worldwide, American Image Suffers”. Pew Research Center, 26 June 2017. https://www.pewresearch.org/global/2017/06/26/tarnished-american-brand
[24] Mark A Ashwill, “Will Vietnamese student numbers in the US recover post-COVID?”. University World News, 9 January 2021. https://www.universityworldnews.com/post.php?story=20210107143706792#:~:text=Over%20eight%20out%20of%2010,at%2031%2C613%20in%20March%202018.)
[25] “Investor Visa Groups Haggle Over Expiring Program’s Renewal”. Bloomberg Law, 18 June 2021. https://news.bloomberglaw.com/daily-labor-report/investor-visa-groups-haggle-over-expiring-programs-renewal
[26] Ben Yagoda, “One Cheer for Whataboutism”. New York Times, 19 July 2018. https://www.nytimes.com/2018/07/19/opinion/one-cheer-for-whataboutism.html
[27] Tsukasa Hadano, “‘Last G-7’: China revels in parody mocking US and allies”. Nikkei Asia, 16 June 201. https://asia.nikkei.com/Politics/International-relations/Last-G-7-China-revels-in-parody-mocking-US-and-allies
[28] “In China, bemusement and scorn over unresolved U.S. election”. Reuters, 4 November 2020.https://www.reuters.com/article/us-usa-election-china-reaction-idUSKBN27K1EF
[29] Amy Gunia, “China Has Reacted to the Storming of the U.S. Capitol by Comparing It to the Wrecking of Hong Kong’s Legislature”. TIME, 11 January 2021. https://time.com/5928446/china-reaction-capitol-hong-kong-legco
[30] Ken Moritsugu, “On Eid, Xinjiang imams defend China against US criticism”. Associated Press, 14 May 2021. https://apnews.com/article/china-government-and-politics-religion-3d8fa6aee61268d105610ebc92ed1b55
[31] Alex Lo, “Beijing reads Noam Chomsky”. South China Morning Post, 15 April 2021. https://www.scmp.com/comment/opinion/article/3129571/beijing-reads-noam-chomsky
[32] Bruce Shen, “Why Chinese feel free to dismiss America’s human rights concerns in Xinjiang”. South China Morning Post, 31 March 2021. https://www.scmp.com/comment/opinion/article/3127577/why-chinese-feel-free-dismiss-americas-human-rights-concerns
[33] Amber Wang, “Alaska summit: what message did public US-China spat send to observers?”. South China Morning Post, 20 March 2021. https://www.scmp.com/news/china/diplomacy/article/3126291/us-china-talks-what-message-did-their-public-spat-send
[34] Hoang Thi Ha, “Vietnam’s attitude towards Chinese vaccines is very telling”. Channel News Asia, 14 July 2021. https://www.channelnewsasia.com/news/commentary/vietnam-vaccine-pfizer-moderna-sinovac-sinopharm-us-china-covid-15210910
[35] Rahul Mishra, “China’s Self-Inflicted Wounds in the South China Sea”. The Diplomat, 21 July 2020. https://thediplomat.com/2020/07/chinas-self-inflicted-wounds-in-the-south-china-sea
[36] Catherine Wong and Maria Siow, “Mekong dam: China cuts river flow 50 per cent, is slammed for lack of warning”. South China Morning Post, 9 January 2021. https://www.scmp.com/news/china/diplomacy/article/3116989/mekong-dam-china-cuts-river-flow-50-cent-slammed-lack-warning
[37] Huynh Tam Sang, “Facing frenemy China, Vietnam shall edge closer to America”. Think China, 14 September 2020. https://www.thinkchina.sg/facing-frenemy-china-vietnam-shall-edge-closer-america
[38] Seah, S. et al., The State of Southeast Asia: 2021 (Singapore: ISEAS – Yusof Ishak Institute, 2021). /wp-content/uploads/2021/01/The-State-of-SEA-2021-v2.pdf
[39] “China threatens Vietnam of being ‘overthrown’ if sides with the US to contain Beijing”. Thoibao.de, 18 July 2020. https://thoibao.de/blog/2020/07/18/china-threatens-vietnam-of-being-overthrown-if-sides-with-the-us-to-contain-beijing
[40] https://twitter.com/ngaphambbc/status/1282920802573221888
[41] https://www.facebook.com/usembassyhanoi/posts/3997121293650036
[42] https://www.facebook.com/ChineseEmbassyinHanoi/posts/442447523818541
[43] “On Communist Party’s Centenary, Xi Jinping Warns Against Foreign Interference”. New York Times, 1 July 2021. https://www.nytimes.com/live/2021/06/30/world/china-communist-party-anniversary
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EXECUTIVE SUMMARY
- US Defense Secretary Lloyd Austin’s visit to three Southeast Asian countries in July 2021 was aimed at reaffirming America’s commitment to regional alliances and partnerships amid concerns of US neglect of the region in the first six months of the Biden administration.
- The choice of Singapore, Vietnam and the Philippines – as well as forthcoming high-level US engagements in these three countries – highlight their importance as “critical Indo-Pacific partners” in the Biden administration’s Indo-Pacific strategy.
- Austin’s trip confirmed the strategic importance of Singapore as a strong supporter of America’s security presence in the region through longstanding and multifaceted bilateral defence ties.
- In Vietnam, Austin addressed legacy issues from the Vietnam War, especially the country’s own Missing in Action issue, which could potentially pave the way for more substantive security relationship.
- During Austin’s visit to the Philippines, President Rodrigo Duterte withdrew his letter of termination for the 1999 Visiting Forces Agreement, which helped put the US-Philippine alliance back on course.
- Austin’s messages during his trip, particularly in his Fullerton Lecture in Singapore, outlined the broad contours of the Biden administration’s Southeast Asia policy that goes beyond the dynamics of US-China strategic rivalry and seeks to provide a more holistic and positive agenda of US engagement with the region.
*William Choong, Le Hong Hiep and Ian Storey are Senior Fellows and Hoang Thi Ha is Fellow and Co-coordinator of the Regional Strategic and Political Studies Programme at the ISEAS – Yusof Ishak Institute.
INTRODUCTION
US Secretary of Defense Lloyd Austin’s swing through Southeast Asia on 26-29 July, during which he visited Singapore, Vietnam and the Philippines, was significant because it was the first trip to the region by a US cabinet-ranking member since President Joseph Biden took office in January.
The first six months of the Biden administration had been largely focused on rebuilding US relationships with high-priority allies and partners in Northeast Asia (Japan and the Republic of Korea), Europe (NATO and the G7) and the Quad (especially India) as well as setting the parameters of engagement with China – America’s key strategic competitor. In contrast, President Biden has not had a single telephone call with any Southeast Asian leader. The administration’s belated outreach to Southeast Asia led to concerns that Washington was neglecting the region at a time when China’s regional influence continued to expand through extended trade and investment ties, vaccine assistance and in-person diplomacy.[1]
Against this backdrop, the significance of Austin’s trip goes beyond issues of defence cooperation. As he highlighted in his Fullerton Lecture in Singapore, the principal objective of his trip was “to reaffirm enduring American commitments” to Southeast Asia.[2] This Perspective examines the outcomes and messages from Austin’s trip, and gauges the broad contours of the Biden administration’s Southeast Asia policy within its broader Indo-Pacific strategy.
AUSTIN’S FULLERTON LECTURE: REVERTING TO FORM
Austin’s Fullerton Lecture in Singapore, organised by the London-based International Institute for Strategic Studies (IISS), can be seen as the first Southeast Asia policy speech by the Biden administration. As indicated in its title – “The Imperative of Partnership” – the lecture reaffirmed the importance of alliances and partnerships, the lodestone of America’s Asia policy, which had been undermined by the Trump administration’s transactional and unilateral approach. Austin’s statement that the US would move in “lockstep” with its allies and partners on a range of issues[3] such as the COVID-19 pandemic, climate change, coercion from rising powers, North Korea’s nuclear arsenal and the Myanmar crisis, reflects the Biden administration’s internationalist approach in addressing common global challenges – a clear departure from the Trump administration.
The Fullerton Lecture went beyond the defence-security domain and offered tangible US deliverables to the region. This message was aptly calibrated for his Southeast Asian audience, many of whom prefer to see America providing a positive agenda of regional cooperation rather than a zero-sum narrative of US-China rivalry. Austin hit the right note in saying that America’s enduring ties in Southeast Asia “are bigger than just geopolitics”.[4]
He emphasised US pandemic assistance, especially the donation of 40 million doses of COVID-19 vaccines throughout the Indo-Pacific, including Indonesia, Laos, the Philippines, Malaysia, Thailand and Vietnam. Taking an indirect swipe at China－whose vaccines are mainly sold and have relatively lower efficacy rates－Austin praised US-developed vaccines as “medical miracles” that are “incredibly effective at saving lives and preventing serious illness” and that were being donated with no conditions or strings attached.[5] Austin’s statement mirrors what Kurt Campbell, the Biden Administration’s Indo-Pacific czar, had said earlier in July. Speaking to the Asia Society, Campbell said that the US needed to “do more” in Southeast Asia and he expected “exciting” and “decisive” announcements on vaccine diplomacy and infrastructure when the Quad leaders meet in Washington in late 2021.[6]
When addressing the challenges posed by China, Austin also sought to strike the right notes with his Southeast Asian audience who are concerned that too strident a push by Washington against China would pressure regional states into making invidious choices between the two powers.[7] While criticising Chinese behaviour on a range of issues from the South China Sea dispute and tensions with Taiwan and India, to actions against Uighur Muslims in Xinjiang, Austin also gave assurances that Washington was “committed to pursuing a constructive, stable relationship with China, including stronger crisis communications” and is “not asking countries in the region to choose between the US and China”. In a post-event roundtable discussion organised by the IISS, many regional analysts thought that this message on China was “about right”.[8] This view, however, was not shared by China. In its remarks on 29 July, the Chinese Embassy in Singapore harshly criticised Austin’s lecture, saying that he had “played up the so-called China threat in an attempt to drive a wedge between China and its neighbors”.[9] Beijing has consistently used this narrative in its contest for influence with the US in the region.
Austin’s lecture reiterated US support for ASEAN’s central role in the region. It is noteworthy that Austin went so far as to “applaud ASEAN for its efforts to end the tragic violence in Myanmar” even though the group has been criticised for its delayed appointment of a special envoy to Myanmar. Arguably, this support is not based on high expectations of what ASEAN can do, and is instead a pragmatic consideration given the lack of better alternatives due to Washington’s limited leverage over, and peripheral interests in, the Myanmar situation.
Austin also stressed that the Quad sought to complement – not replace – ASEAN-led mechanisms, including the ASEAN Defence Ministers’ Meeting-Plus (ADMM-Plus). However, whether Southeast Asians have been reassured by this message remains to be seen. Washington realises the importance of reassuring the region about ASEAN centrality even as the US continues to further its investment in the Quad for the desired strategic-security outcomes which it does not expect ASEAN to be able to provide.
SINGAPORE: CONSOLIDATING STRATEGIC TIES
Austin’s visit to Singapore underscored the strategic importance that the Biden administration attaches to Singapore – a strong supporter of the US security presence in the region, including through logistical support for US military aircraft and vessels, and facilitation of the “regular rotational deployment” of US Littoral Combat Ships and P-8 Poseidon aircraft. As noted in the Joint Statement between Austin and his Singaporean counterpart Dr Ng Eng Hen, “[t]his support is anchored on the shared belief that the US’ presence in the region is vital for its peace, prosperity, and stability”.[10] On its part, the US is a longstanding supporter of Singapore’s overseas training and exercises, and will be hosting Singapore’s future F-35B fighter aircraft detachment.[11]
The longstanding and multi-faceted US-Singapore defence relationship was reaffirmed by the 2019 signing of the Protocol of Amendment which renewed the 1990 Memorandum of Understanding (MOU) regarding America’s use of facilities in Singapore and extended the MOU by 15 years, and another MOU on the establishment of a Republic of Singapore Air Force fighter training detachment in the US-territory of Guam.
During Austin’s visit, both sides highlighted new areas of bilateral defence cooperation, especially in cyber defence and strategic communications.[12] These include Singapore’s establishment of the multilateral Counter-Terrorism Information Facility in which the US is a partner country. Singapore also joined the multi-national Artificial Intelligence Partnership for Defence in May 2021. The partnership seeks to enable multilateral cooperation and exchange of best practices on “responsible AI” in the defence sector.[13]
Apart from Austin’s visit, Washington has injected fresh energy into the bilateral relationship. Before him, the outgoing commander of the US Indo-Pacific Command, Admiral Philip S. Davidson, and his successor, Admiral John Aquilino, visited the city-state in April and July, respectively. On 29 July, the Biden administration announced the nomination of entrepreneur Eric Kaplan as Washington’s new ambassador to Singapore, a post which had been left vacant since January 2017. A day later, the White House announced that US Vice-President Kamala Harris would visit Singapore and Vietnam in August to strengthen relationships and expand economic cooperation with America’s two “critical Indo-Pacific partners”.[14] Washington has good reasons to up its game in Singapore beyond defence matters to win the hearts and minds of Singaporeans, many of whom have cultural and familial bonds with China. A Pew Research Centre report in July 2021 showed that 64 per cent of Singaporeans polled had a favourable view of China – the highest among the 17 countries surveyed.[15]
VIETNAM: ADDRESSING THE PAST, LOOKING TO THE FUTURE
Austin’s visit to Vietnam was the latest in a series of US diplomatic overtures to the country in recent months. In July, Vietnam received a second ex-US Coast Guard cutter donated by the United States. Following a Vietnam-US agreement to address US concerns about Vietnam’s currency practices on 19 July 2021,[16] the Office of the US Trade Representative formally closed a Section 301 investigation into this matter, removing a major source of contention in bilateral relations.[17] By early August, the US had donated five million doses of the Moderna vaccine against COVID-19 to Vietnam through the COVAX Facility, making Vietnam one of the largest beneficiaries of Washington’s “vaccine diplomacy”. Secretary Austin’s visit was part of America’s coordinated efforts to deepen ties with Vietnam to win Hanoi’s support for its regional strategic agenda.
Austin’s meetings with President Nguyen Xuan Phuc and Prime Minister Pham Minh Chinh in Hanoi focused on bilateral cooperation to fight the COVID-19 pandemic, which is currently Vietnam’s most immediate concern. The Vietnamese hosts expressed their appreciation for America’s unconditional vaccine donations. During Austin’s meeting with Vietnamese Defence Minister Phan Van Giang, they discussed measures to further promote cooperation in line with the 2011 MOU on defence cooperation and the 2015 Joint Vision Statement on defence relations. Priority areas of cooperation include addressing legacy issues from the Vietnam War, maritime law enforcement capacity building, military medicine cooperation, training and defence industry collaboration.
A highlight of the visit was the signing of an MOU under which the US, through the participation of Harvard and Texas Tech University, will help Vietnam locate, identify and recover the remains of hundreds of thousands of Vietnamese soldiers killed during the Vietnam War but who are still listed as missing in action (MIA).[18] This move will contribute to the building of mutual trust as the MIA issue still carries great emotional significance for the Vietnamese people. Helping Vietnam solve this legacy issue will remove an obstacle of strong political symbolism to bilateral defence ties, paving the way for stronger and more substantive defence cooperation between the two former foes in the future.
Before Austin left for Southeast Asia, there were rumours that the two sides might also sign a General Security of Military Information Agreement (GSOMIA). GSOMIAs set the legal framework for parties to establish terms for the protection and handling of classified military information exchanged between them. The signing of such an agreement would signify a meaningful step towards more substantive defence cooperation between the US and Vietnam, and facilitate bilateral coordination on issues of mutual concern, including the South China Sea dispute. The two sides are said to have been in talks about the agreement for several years. However, media reports on the outcomes of Austin’s visit did not mention the signing of a GSOMIA. It is unclear if the signing of a GSOMIA has been delayed, or if the agreement has been signed but both sides decided not to publicise it.
As noted earlier, Vice President Kamala Harris is scheduled to visit Vietnam in August, the first sitting US Vice President to do so. Further meetings between the two countries’ leaders, including at the highest level, should also be expected as they seek further measures to strengthen their bilateral relations, including military ties in particular.
Faced with unprecedented security challenges caused by the rise of China and its growing assertiveness, the US and Vietnam have recently found strong incentives to work together to build a more resilient and substantive bilateral relationship. Austin’s visit will strengthen bilateral relations in that direction and facilitate their potential upgrade to the level of strategic partnership in the future.
THE PHILIPPINES: MOVING THE ALLIANCE FORWARD
The third and final leg of Austin’s Southeast Asian trip was arguably the most successful in that it helped put the US-Philippines alliance back on track after more than a year of uncertainty. That uncertainty had arisen from President Rodrigo Duterte’s threat to terminate the 1999 US-Philippines Visiting Forces Agreement (VFA) which provides the legal framework for the US military to undertake training activities in the Philippines with the Armed Forces of the Philippines (AFP). Without the VFA, the 1951 Mutual Defense Treaty (MDT) and the 2014 Enhanced Defense Cooperation Agreement (EDCA) that allows the US to preposition military equipment at various AFP bases, cannot function effectively.
In February 2020, Duterte had served notice that the Philippines would withdraw from the VFA after 180 days. The proximate cause was the US State Department’s denial of a travel visa to one of Duterte’s political associates who had helped execute his “war on drugs”. The move was also in keeping with Duterte’s pledge to “divorce” the US and pursue a more balanced foreign policy. Further, Duterte may have calculated that by threatening to abrogate the VFA, the US would hold off criticism of his administration’s human rights record. Some Philippine politicians had also long grumbled that the VFA prevented the legal prosecution of US service personnel who had committed serious crimes in the Philippines.
However, the Philippines’ national security establishment lobbied hard to keep the VFA. The US-Philippine alliance strengthens Manila’s hand in its maritime territorial and jurisdictional dispute with Beijing in the South China Sea: it provides the AFP with a security guarantee that if they are attacked, US forces would provide support as well as valuable training opportunities and millions of dollars in military assistance every year. Duterte’s threat to abrogate the VFA had made long-term planning for the alliance almost impossible, causing great frustration in both the Trump and Biden administrations.
As a result of this lobbying, Duterte suspended the abrogation of the VFA three times: in June and November 2020 and in June 2021. Between February and May 2021, US and Philippine officials had negotiated an addendum to the VFA. Although the details of that addendum have not been released, Philippine Ambassador to the US, Jose Manuel Romualdez, indicated that it had improved the terms of the VFA, presumably meaning it had addressed Philippine concerns regarding the prosecution of US service personnel.[19] In June, Duterte promised he would study the revised agreement. The third extension would have kept the VFA alive until February 2022, and many observers expected that Duterte would agree to a further postponement early next year and leave the final decision to his successor (constitutionally Philippine presidents are limited to one six-year term and Duterte will leave office in June 2022).
However, in a 75-minute meeting with Austin, Duterte agreed to withdraw the letter of termination. The decision was announced the next day at a joint press conference with Austin and his Philippine counterpart Delfin Lorenzana.[20] Lorenzana said he did not know why Duterte had changed his mind. However, increased tensions with China in the South China Sea – including the presence of hundreds of Chinese fishing boats at Whitsun Reef in the Philippines’ EEZ in March-April[21] – were almost certainly a factor in the President’s calculations. Duterte’s spokesperson, Harry Roque, said the decision was based on “upholding the Philippines’ strategic core interests … and clarity of US position on its obligations and commitments under the MDT”.[22] After Austin had departed Manila, Duterte himself said he had withdrawn his opposition to the VFA as a quid pro quo for America’s donation of more than six million doses of Johnson & Johnson and Moderna COVID-19 vaccines to the Philippines.[23]
Prior to Austin’s visit, there had been some signs of progress in US-Philippine relations. In January, the US had reiterated its commitment to come to the aid of the Philippines if it were attacked in the South China Sea.[24] In April, the annual Balikatan bilateral military exercise took place[25] (the drills in 2020 were cancelled due to the pandemic), and in June, the US State Department approved in principle the sale of F-16 fighter jets to the Philippines.[26] (Manila is nevertheless still looking at alternative options).
But since Duterte took office in 2016, the US-Philippine alliance has been treading water, and given the President’s continued animus towards America, it is still possible that he could reverse his decision on the VFA, or impede negotiations between the two sides on improving military cooperation. As such, real progress on strengthening the US-Philippines alliance – such as negotiating a GSOMIA, designing new combined exercises and implementing EDCA – will have to wait until Duterte’s successor takes office in June 2022.
CONCLUSION
Austin’s swing through Southeast Asia was positively received by the security establishments in the host countries.[27] His trip reflects Washington’s growing cognizance of the need to intensify diplomatic engagement with Southeast Asia – “the fulcrum of the Indo-Pacific region” where the US holds “enduring interests”, as affirmed in the Southeast Asia Strategy Act.[28] The Act, which was passed by the US House of Representatives in April, also requires a comprehensive strategy for engaging Southeast Asia across multiple dimensions, from trade and investment flows to diplomatic and security arrangements. The Biden administration has thus far taken only some initial steps towards this end.
Austin’s Southeast Asia tour is part of the Biden administration’s “charm offensive” towards the region after the first six months of lacklustre interactions. His message of US commitment to “deepen and expand Southeast Asian alliances, partnerships and multilateral engagements”[29] will be echoed by Secretary of State Antony Blinken when he meets ASEAN foreign ministers in early August. US Vice-President Kamala Harris will also visit Singapore and Vietnam this month. Kurt Campbell has hinted that a special ASEAN-US Summit is being considered, and another visit by US Secretary of State Anthony Blinken might be on the cards.[30]
Given the growing significance of Southeast Asia – be it as a key arena of US-China strategic competition or a growing source of US prosperity – it is in America’s interests to build upon this momentum to deepen its engagement with the region in a sustained and comprehensive manner.
ISEAS Perspective 2021/103, 5 August 2021
ENDNNOTES
[1] See Colum Lynch, Jack Detsch, and Robbie Gramer, “The Glitch That Ruined Blinken’s ASEAN Debut”, Foreign Policy, 27 May 2021, https://foreignpolicy.com/2021/05/27/blinken-asean-meeting-pivot-asia-middle-east; James Crabtree, “A Confused Biden Team Risks Losing Southeast Asia”, Foreign Policy, 27 June 2021, https://foreignpolicy.com/2021/06/27/southeast-asia-asean-china-us-biden-blinken-confusion-geopolitics; Hoang Thi Ha, “Beijing’s head start over Biden in South-east Asia”, Straits Times, 31 May 2021, https://www.straitstimes.com/opinion/beijings-head-start-over-biden-in-south-east-asia.
[2] Secretary of Defense Remarks at the 40th International Institute for Strategic Studies Fullerton Lecture (As Prepared), US Secretary of Defense Lloyd J. Austin III, 27 July 2021, https://www.defense.gov/Newsroom/Speeches/Speech/Article/2708192/secretary-of-defense-remarks-at-the-40th-international-institute-for-strategic.
[3] Ibid.
[4] Ibid.
[5] Ibid.
[6] Ken Moriyasu, “US does not support Taiwan independence: Kurt Campbell”, Nikkei Asia, 7 July 2021, https://asia.nikkei.com/Politics/International-relations/Biden-s-Asia-policy/US-does-not-support-Taiwan-independence-Kurt-Campbell.
[7] William Choong, “The United States’ ‘Mini’ Shangri-La Dialogue: Stand and Deliver”, Fulcrum, 27 July 2021, https://fulcrum.sg/the-united-states-mini-shangri-la-dialogue-stand-and-deliver.
[8] IISS post-event discussion on Austin’s Fullerton Lecture, 27 July 2021, attended by one of the authors.
[9] Embassy of the People’s Republic of China in the Republic of Singapore, “Remarks of the Spokesperson of the Chinese Embassy in Singapore in Response to U.S. Secretary of Defense Lloyd James Austin III’s China-Related Remarks at the Fullerton Lecture”, 29 July 2021, http://www.chinaembassy.org.sg/eng/sgsd/t1895923.htm.
[10] Joint Statement by United States Secretary of Defense Lloyd J. Austin III and Singapore Minister for Defence Dr Ng Eng Hen, https://www.mindef.gov.sg/web/portal/mindef/news-and-events/latest-releases/article-detail/2021/July/27jul21_fs.
[11] Ibid.
[12] Ibid.
[13] Ibid.
[14] Nirmal Ghosh, “US Vice-President Kamala Harris to visit Singapore and Vietnam”, The Straits Times, 30 July 2021, https://www.straitstimes.com/world/united-states/us-vice-president-kamala-harris-to-visit-singapore-and-vietnam.
[15] Laura Silver, “China’s international image remains broadly negative as views of the U.S. rebound”, Pew Research Center, 30 June 20211, https://www.pewresearch.org/fact-tank/2021/06/30/chinas-international-image-remains-broadly-negative-as-views-of-the-u-s-rebound.
[16] US Department of the Treasury, “Joint Statement from the U.S. Department of the Treasury and the State Bank of Vietnam”, 19 July 2021, https://home.treasury.gov/news/press-releases/jy0280.
[17] Office of the US Trade Representative, “USTR Releases Determination on Action and Ongoing Monitoring Following U.S.-Vietnam Agreement on Vietnam’s Currency Practice”, 23 July 2021, https://ustr.gov/about-us/policy-offices/press-office/press-releases/2021/july/ustr-releases-determination-action-and-ongoing-monitoring-following-us-vietnam-agreement-vietnams.
[18] For an analysis of the significance of the signing of the MOU, see Le Hong Hiep, “Secretary Austin’s Visit to Vietnam: Building Trust to Strengthen Defence Ties”, Fulcrum, 28 July 2021, https://fulcrum.sg/secretary-austins-visit-to-vietnam-building-trust-to-strengthen-defence-ties.
[19] Karen Lema, “Philippine envoy confident Duterte will back revamped U.S. defence pact”, Reuters, 3 June 2021, https://www.reuters.com/world/asia-pacific/philippine-envoy-confident-duterte-will-back-revamped-us-defence-pact-2021-06-03
[20] Frances Mangosing, “Lorenzana: ‘VFA in full force again’”, Philippine Daily Inquirer, 30 July 2021, https://globalnation.inquirer.net/198126/duterte-recalls-decision-to-junk-vfa-after-meeting-with-top-us-official
[21] Laura Zhou, “South China Sea: Chinese boats keep up steady presence at disputed Whitsun Reef, says US ship tracker”, South China Morning Post, 22 April 2021, https://www.scmp.com/news/china/diplomacy/article/3130676/china-present-whitsun-reef-and-surrounds-2019-says-us-group.
[22] Idrees Ali and Karen Lima, “Philippines’ Duterte fully restores key US troop pact”, Reuters, 30 July 2021, https://www.reuters.com/world/asia-pacific/us-aims-shore-up-philippine-ties-troop-pact-future-lingers-2021-07-29.
[23] Genalyn Kabiling, “‘Give and take’: VFA retention a ‘concession’ after US vaccine donation, Duterte admits”, Manila Bulletin, 3 August 2021, https://mb.com.ph/2021/08/03/give-and-take-vfa-retention-a-concession-after-us-vaccine-donation-duterte-admits
[24] Wendy Wu and Teddy Ng, “China-US tension: Biden administration pledges to back Japan and Philippines in maritime disputes”, South China Morning Post, 28 January 2021, https://www.scmp.com/news/china/diplomacy/article/3119578/south-china-sea-blinken-pledges-us-backing-philippines-event.
[25] “US and Philippine Forces Conclude 36th Balikatan Exercise”, US Embassy in the Philippines, 23 April 2021, https://ph.usembassy.gov/us-and-philippine-forces-conclude-36th-balikatan-exercise.
[26] “US State Dept OKs possible sale of F-16s, missiles to Philippines”, Reuters, 25 June 2021, https://www.reuters.com/business/aerospace-defense/us-state-dept-approves-possible-sale-f-16-fighters-missiles-philippines-pentagon-2021-06-24.
[27] The IISS post-event discussion on Austin’s Fullerton Lecture, 27 July 2021; Authors’ interviews with a number of Southeast Asian states’ officials; and podcast on 49th Fullerton Lecture: US Secretary of Defense Lloyd J. Austin, IISS Sounds Strategic, 29 July 2021, https://www.iiss.org/blogs/podcast/2021/07/40th-fullerton-lecture-us-secretary-of-defense-austin.
[28] H.R.1083 – Southeast Asia Strategy Act, US Congress, https://www.congress.gov/bill/117th-congress/house-bill/1083.
[29] Ibid.
[30] James Crabtree, “What does it mean to be America’s partner?”, Straits Times, 24 July 2021, https://www.straitstimes.com/opinion/what-does-it-mean-to-be-americas-partner-0.
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