The United States and Vietnam elevated their bilateral relations in September 2023, from Comprehensive Partnership to Comprehensive Strategic Partnership (CSP). The US has, in the Vietnamese scheme, skipped over the intermediary step called Strategic Partnership. Like a big wheel turning a small wheel, the US-Vietnam CSP would be considered from the US perspective as needing to turn for the US to achieve its short term policy goals of creating a ring of US-friendly countries around China, countries whom at the same time may have antipathy towards China. Such a country could be Vietnam, although efforts have been made since 1990 to tone down tensions between the communist countries, although maritime disputes remain. The history of their relationship is full of ups and downs.
This is why the two-step jump is significant. The relationship, to be put on steroids, will see US and Vietnam working together on key issues that are beneficial to both. While that is not unusual, the two-step jump surprised many. Some interesting details about the double jump could illuminate the present nature of the relationship. Thus, the purpose of this essay is to explore some of the factors that led to a double jump.
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Brief background of recent US-Vietnam Comprehensive Partnership agreement
The previous Comprehensive Partnership was established in 2013, during the Obama Presidency and leadership of General Secretary Nguyen Phu Trong. Subsequently in 2015, Nguyen Phu Trong officially visited the US, and the Vietnamese side is proud that it was the very first time that a General Secretary of the Communist Party of Vietnam was invited to visit the US. The spirit of the exchange at that time, as Nguyen Phu Trong said, “what’s past is the past, overcome differences, emphasize the similarities, work towards the future”. Clearly, over the last decade, the bitter and painful legacies of the Vietnam (American) War are being overcome, slowly but surely. In contrast, the same efforts between China and Vietnam to really put past issues in the dust heap have not seen decomposition or decay of tensions. When President Xi Jinping visited Vietnam in mid-December 2023 he projected a soft image that suggested more respect for Vietnam, and in January 2024, officials on both sides met to agree on a sequential, low-lying fruits approach to move forward in their disputes in the South China Sea. When Nguyen Phu Trong passed away in July 2024, Xi Jinping personally delivered a message of condolence at the Vietnamese Embassy in Beijing, while Wang Huning, senior Political Bureau member, led a Chinese delegation to attend the funeral. This was an honour bestowed only to close friends.
General factors that pushed for the two jumps to Comprehensive Strategic Partnership
Reminding everyone about a few important characteristics of the US-Vietnam relationship is beneficial to understanding. In summary, the US has become a very important economic partner to Vietnam, and for the US, Vietnam has become an additional market as well as an additional card to play against China.
- Vietnam’s relationship with the major powers has become a cornerstone of its foreign policies. This set of relationship is not limited to just the Permanent Five members of the United Nations Security Council. The triangular relationship among Vietnam, China, and the US sees Vietnam on the shortest end of the triangle; its relationship with either power is a function of the other two’s relationship. Vietnam was also a proxy during the Cold War, and the current Vietnamese policy seeks not to become, actively or passively, a proxy again. Before his death, the late Vice Minister for Defence (responsible for defence diplomacy) Nguyen Chi Vinh noted that it was important for Vietnam not to become a stage where major powers play out their conflicts.
- The importance of the US to Vietnamese economic development. The US has become, from the mid-2000s, a very important export market, a preferred source of education at all levels especially higher education, of investment, and source of technological transfers. It is not exaggeration to say that the US has become an inspiration to Vietnam. However, it took a long time for this economic relationship to stabilise, from 1999’s Bilateral Trade Agreement. The speed has caught up because the Vietnamese domestic ideological opposition to the US, which was present in the 1990s and 2000s, have now disappeared. Vietnam has consistently asked for respect from the USA for Vietnamese political values and political system, and the US has acceded to that demand. Towards Vietnam, the US trade and services deficit in 2022 was US$114.6 billion.
In contrast, Vietnamese collaboration with China while strong is not as big as the US-Vietnam relationship. For instance, Vietnamese share of the ASEAN trade with the US is 27.3% (142 billion out of a total of 520 billion) in 2022. Vietnamese share of the ASEAN trade with China In 2022 was 17.9% (175 billion out of 975 billion). Vietnam has about a 20 billion trade surplus with the US, and a trade deficit with China of 3 billion (2023 figures). Naturally, Vietnam would want to enlarge the deficit with the US where possible, and concede to US protectionism where necessary. Vietnam would want to export more to China, but most Vietnamese exports to China are not high value added. But with Trump 2.0 Presidency, the game will change again because of Trump’s trade policies. In 2024 China obtained an agreement from Vietnam to complete the railway line between its Yunnan Province down south and east, ending at Hai Phong city of Vietnam. China is also in the running to secure the contract or parts of it for the new Vietnamese high speed railway, approved by the Vietnamese National Assembly in November 2024 and scheduled to begin construction in 2030.
- The lifting of the veil over the efficacy of Russian military weapons (Ukraine-Russia war) has further enhanced the reputation of US military equipment. Vietnam in fact has been diversifying its sources of military equipment, and from what is known, they have also bought equipment from Israel and the US. Russia has reportedly received reversed trades of weapons from its recipient countries, including stopping supplies to India and asking North Korea to reverse weapons exports back to Russia. In other words, in the middle to long term, Russia could become an unreliable provider of weapons for Vietnam to defend itself. BBC Vietnam Language in October 2023 pointed to a Vietnamese desire to purchase US’ F16s, quoting a source from the US that said both sides were in negotiations.
- Vietnamese realise the importance of technology in their next stage of economic development. To avoid the middle income trap, technology will help Vietnam move up the value chain, and Vietnam sees the US as the lynchpin to this next stage. The US chips and other strategic goods embargo on China further enhanced the Vietnamese belief in being self-independent on chips (taking on the same path as the Chinese did – collaborating with the US at first and then developing its own momentum after a number of years). The US-Vietnam CSP contains a special agreement on siting chip production facilities in Vietnam, and US training Vietnamese engineers on chip production. The US will also be assisting Vietnam in digitlisation, and NVdia decided to set up a base in Vietnam in December 2024.
- US high education scholarships for Vietnamese students – the US is the number one destination for Vietnamese students, and the Vietnamese government has been asking for more scholarships and more collaboration with US educational institutions to raise the standards of Vietnamese educational institutions. US institutions are increasingly locating branch campuses in Vietnam, and more universities are knocking at the door. Immediately after the Biden visit in September 2023, officials from the US Embassy and the Vietnam Ministry of Education and Training signed a framework agreement for higher level of cooperation – basically to bring more US-style higher education to Vietnam. No similar efforts are seen with China.
On the US side, the time was ripe. Notably:
- US bipartisan opinion and policy regarding China have become advantageous to western-friendly countries periphery to China; these countries, provided they would work with the US, have become either a player in the China+1 strategy played by western investors/economic players, or become observation stations and important chess pieces in the island chain strategic and military strategies of the US.
- The US has gained significant social and cultural capital in Vietnam over many years of allowing migration and travel between the US and Vietnam. One could see this – right around the time of the Biden visit in 2023, a book called “Letters President Ho Chi Minh sent to the USA” was allowed to be published in Vietnam (all books must be licensed by the state). Perusing through the book, the main message was that President Ho was from the beginning of the independent regime in 1945 desirous of collaboration and a closer and comprehensive relationship with the US. See this coverage as an example: https://www.vietnam.vn/buc-thu-bac-ho-gui-tong-thong-my-gan-80-nam-truoc-voi-y-nguyen-hop-tac-day-du/. Visits by previous US presidents have received roars of approval and welcome from the people. That the US presidents could walk the streets and eat in local restaurants while the Chinese leader could never do so is a great asset to the public image of US culture.
There are also other important and personal reasons that have contributed to the closing of the deal. The role of the late General Secretary Nguyen Phu Trong was pivotal; he sent the Party head of external relations Le Hoai Trung to the US in July 2023 to discuss a visit by President Biden and to upgrade the relationship. Consequent to discussions about the visit, a US request to have a double jump was agreed to, because the reality of the excellent state of trade, investments, and people-people exchanges had far exceeded the scope of a single jump in status of cooperation. The goodwill of General Secretary during the Biden visit extended to Biden when Trong personally received the US President at the Vietnamese Presidential Palace, and jointly inspected the Guard of Honour despite the hot weather, a stroke risk to Trong.
A tilt in the Vietnamese foreign and security policy?
Coupled with good economic growth, Vietnamese standing in international politics of the region is at an all-time high. Its importance, primarily derived from its geopolitical position, is being reasserted. Potential military conflicts in the South China Sea underlines not just the military importance of the long Vietnamese coastline astride the South China Sea, but also its position as being neighbour to as well as an ideological pal (at least on the surface) with China. Adding to that is Vietnam having a strong position in the China+1 strategy that has developed among investors wary about losing all their production, supply, and logistic chains in China. Mr Nguyen Phu Trong frequently repeated the refrain that his country has never had better fortunes than now. Investments, even those outflowing from China, have gone to Vietnam and may never return to China in the next 10 years.
This rise in status has tighten the foreign policy space for Vietnam, ironically. A major pillar of Vietnamese foreign policy is to be on the best of terms with all the real or potential global powers (roughly speaking, P5 of the United Nations Security Council). This policy is accompanied by the Four No-s policy, which is thought usually as an assurance given to China that Vietnam would not side with another major power militarily. However, being the best friends of everyone will mean not having any best friend, and it will be quite impossible to be good friends to both US and China if the situation between the two big countries get worse. The outcome of the 2023 November APEC meeting between China and the US has not fundamentally bridged the huge differences between the two most important economic partners of Vietnam, and China is the bigger potential adversary with reference to the South China Sea disputes.
Going beyond generality, it would be useful to consider some of the tight situations that might arise for Vietnam.
- For instance, what role will Vietnam play or refuse to play (Four No-s policy of Vietnam) in case of conflict between US and China? Vietnam may declare that it did not want military action taking place on its territory, but it is possible that ships from either big powers that enter Vietnamese EEZ or even sovereign waters might be attacked by the other. Even more so if there are military installations based on land (I cite for example the temporary rest of important force-projecting military vessels in Vietnamese naval harbours, or hidden military installations that help either side and are installed among the people along the coast, or close to Vietnam: in Cambodia, Laos, or at the China border).
- What stance will Vietnam take in the United Nations, and what will it do to try to turn ASEAN onto their side to forge foreign policy stance?
- Vietnam is not likely to be interested in taking a stance of military cooperation with either China or the US in overseas conflicts far away from home because that could invite attack. The strategic and military posture of Vietnam is defensive.
- On the other hand, Vietnam is under a pinch. The Hainan naval base is just around the corner, and so are Chinese military facilities in Cambodia. South China Sea has Chinese military vessels that are ‘unsinkable aircraft carriers’. The South China Sea, next to Vietnam and Vietnam has sovereignty claims among some islands, will be a theatre of military confrontation when a conflict situation arises in the Taiwan Straits.
Generally, with the CSP, eyebrows, not concerns, could have already raised in Beijing. According to policy maker friend, President Xi Jinping originally wanted to visit Vietnam officially before Biden’s visit in early September 2023. That plan was scuttered by domestic issues. It may be therefore worthwhile to consider what cards Beijing has over Hanoi. The following are unresolved issues between the two who used to described their relationship during the Cold War as “Lips and Teeth”
The first is the South China Sea. In fact this is probably the only military/security reason to cause a Vietnamese military tilt towards the US. Vietnamese continue to be sensitive on this issue and is can make or break cordiality between the two communist nations, two of four remaining in the world. The difficulty with this issue is many parties are involved, and other major powers believe they have a right to be at the table regarding issues of war and peace, particularly rights of navigation and passage. And South China Sea is intimately linked to American and Chinese military strategies surrounding the Taiwan Straits.
Vietnam may settle at the moment for the status quo of letting China dominate Paracels while Vietnam has a greater leeway over the Spratlys. But its maritime defences are still much weaker that the Chinese, and the lack of hardware will see the Vietnamese continue to be in the inferior position. Attempts to change the status quo of islands by either Vietnam or China will be a catalyst to a game change. Vietnam is also at the forefront of seeking solutions to the diplomatic impasse known as the Code of Conduct for the South China Sea, and it would be natural for Vietnam to seek partial, mini-lateral solutions that may not include China.
The second issue for Vietnam-China relations is how China perceives Vietnam in terms of how it deals fairly between China and the US. Where economics are concerned, where China is not able to offer opportunities, Vietnam turning to the US would be accepted. However, China could be interested in Vietnam at least acknowledging or better still participate in some of the major economic diplomatic initiatives that China under Xi Jinping has put out. Vietnamese participation in the BRI is either non-existent or lukewarm (Vietnamese leaders attend the BRI, AIIA, and other strategic regularly) but actual, physical, participation with loans and money involved is still considered by the Vietnamese as full of risks. It took a long time for the Yunnan-Haiphong rail link to be realised. These relate to debt traps, ballooned budgets after success in project tenders,. (The Cat Linh-Ha Dong Metro line built by China is a painful lesson that every person in Hanoi remembers) and security concerns.
Vietnamese senior officials also continue to be sent to China to attend classes for training. They will in the future be identified as having been trained in China and play their ideological roles in the political system back home. The TV images that appeared regarding these training classes were dull and serious, which suggested that the trainees were not exactly happy while there. Whereas meeting between officials from the US and Vietnam were always friendly and jovial when seen on state television. Actually, Vietnamese and Chinese have always had the conversations and exchanges among them on their shared ideological and theoretical systems, China still retains the standing of being the elder brother, because Chinese officials being sent to Vietnam for training is almost never heard of.
In summary, interesting times are ahead as Vietnam and the US begins a new era of cooperation. Economics will dominate the CSP, but economic issues are never too far away from political interpretations, with regards to their inspiration and their outcomes. These include questions about Vietnam’s regional role, and its location being next to China. On the other hand, China is a neighbour that will never go away from Vietnam and the latter’s policy towards the US will increasingly have to be more cautious and well-communicated to China so as to avoid misunderstanding.
David KOH
Present affiliation: Senior Lecturer, VinUniversity
KRSEA, Issue 39, Trendsetters, January 2025.