This Asian nation is key for the US-China power struggle

Chinese leader Xi Jinping has just paid an official visit to Vietnam, where he met with the leaders of Hanoi’s ruling Communist Party. Xi hailed the ties between the two countries and vowed to take them to the next level, while numerous business agreements were also signed.

Such a move would seem obvious given the two countries are not only neighbors, but share the same political ideology. However, their relations are more complicated than that.

Three months earlier, Vietnam was visited by US President Joe Biden of all people, who succeeded in elevating America’s relationship with the South East Asian nation to a strategic partnership. Then, just weeks ago, Japan did the same thing. When looked at from this angle, Xi’s overtures to Hanoi do not look as powerful, but rather represent one of a series of voices from larger powers seeking to win hearts and minds in Vietnam, a nation of geopolitical significance which will contribute to the outcome of the power struggle in the Asia-Pacific.

Although Vietnam is a communist state, this does not mean its relationship with Beijing is amicable. While of course it is not openly antagonistic or hostile, grassroots opinion in the country is wary of China, because a great deal of Vietnamese history involves a power struggle to maintain its independence from the Chinese imperial dynasties.

Vietnam, like many Asian nations, derived a great deal of cultural, philosophical, and technological capital from China, yet its national identity has always been premised on being a distinctive nation from China and not being politically dominated by it. Ideology is not relevant here.

Vietnam recognizes that China is its most critical economic partner – on the other hand, it is striving to avoid ‘Chinese hegemony’. This is not just historical, but modern as well. In 1978, China invaded Vietnam in order to break its alliance with the Soviet Union and assert dominance over it.

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Not only that, the two countries also have rival claims in the South China Sea, a contested waterway with critical shipping routes and resources. From Hanoi’s considerations, this leads to a foreign policy of non-alignment which seeks to court multiple foreign powers, including the US, to maximize its own strategic benefits.

How, one may ask, can Vietnam possibly court the US given the history between the two? Can Hanoi trust Washington? Vietnam appears to be confident in its relationship with the US, despite the scale of atrocities committed during the Vietnam War, because Hanoi won that conflict on its own terms and reunified the country.

Given this, Washington is now returning to the table because it sees Vietnam as a partner to try and contain China. Sure, Hanoi has ideological and political reasons to be suspicious of it, and the White House can never be an ‘ally’, but what the US offers is a chance to accelerate Vietnam’s own economic development and also increase its military leverage in the abovementioned dispute with China.

Of course, Beijing sees this, and therefore the resulting outcome is a struggle for Hanoi’s loyalty. This means, however, that China increasingly has to offer more to be allowed to ‘be at the table’ and compete with the other powers, and also that Vietnam gets to set the terms of engagement and be ‘the kingmaker’.

From the Chinese perspective, Vietnam is in fact an important aspect of the global trade and supply chain because it provides a mask to conceal the ‘made in China’ label to get around various trade restrictions and tariffs imposed by the US. Many Chinese companies are investing in Vietnam precisely because of this, which is why Chinese trade with ASEAN as a whole has surged to replace trade with the US.

Chinese companies build key parts and components, ship them to their own factories in Vietnam where assembly is completed, and the product then goes to the US. It creates the deception that ‘made in China’ is going away and allows indirect Chinese trade with America to continue. Thus, the integration of the Vietnamese and Chinese economies is accelerating. This is enough to keep the peace between the two countries.

At present, given US military encirclement, China is not in a strategic position to engage in confrontation with Vietnam, which is why Xi has chosen to throw everything at it in the name of diplomacy. Keeping Vietnam as a neutral and non-hostile neighbor is thus a core priority for China, especially given the fundamental foreign policy doctrine of the US to instigate division between Beijing and its neighbors as a means of containment. Vietnam, however, simply wants the best of all worlds, and it is certainly getting it for now.