Vietnam and US upgrade relations in move to counter China

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Vietnam has upgraded its relationship with the US to the highest level, bringing the former foes closer in the face of Beijing’s growing assertiveness.

The US signed a “comprehensive strategic partnership” with the south-east Asian country on Sunday after President Joe Biden arrived in Hanoi from New Delhi, where he had attended the G20 summit.

The symbolic but significant change, which follows years of lobbying by Washington, raises the US by two levels to the top status in Vietnam’s bilateral ties hierarchy.

The status is one previously reserved only for China, Russia, India and, as of last year, South Korea. Vietnam had long avoided the move for fear of upsetting Beijing. 

Nguyen Phu Trong, general secretary of the Communist party of Vietnam, said its partnership with the US had grown by “leaps and bounds”. Biden described Vietnam as “a critical power in the world and a bellwether in this vital region”.

The step is “more than words”, said Jon Finer, deputy US national security adviser, who announced the strategic partnership as Biden was flying to Hanoi. “In a system like Vietnam, this is a signal to their entire government, their entire bureaucracy, about the depth of co-operation and alignment with another country.” 

Biden arrived in Vietnam after a G20 summit where the US and its western allies made compromises on their condemnation of Russia’s invasion of Ukraine in the bloc’s joint statement.

The US and its allies are trying to appeal to the global south to build a worldwide consensus against Russia.

The US also views developing countries in Asia as crucial to countering China’s power in the Indo-Pacific. Vietnam is regarded as a frontline nation facing China’s growing ambitions in the South China Sea, where Beijing has made sweeping claims of sovereignty to the alarm of many of its neighbours.

At a press conference in Hanoi late on Sunday, Biden said China’s “difficult economic problem” made it less likely to invade Taiwan.

“It probably doesn’t have the same capacity that it had before,” he said.

Biden also stressed Washington was “not looking to hurt China . . . we’re all better when China does well . . . by the international rules”.

Biden skipped the Association of Southeast Asian Nations and east Asia summits in Jakarta before the G20 meeting in favour of the Vietnam trip, in a bid to show the importance Washington places on its relationship with Hanoi. 

However, there were some signs of tension between the countries, with Biden bringing up human rights “as a priority” for the administration while Trong warned against interference in Vietnam’s domestic affairs.

The elevation of US-Vietnam ties comes nearly half a century after the end of the Vietnam war. Following the victory of the Communist party in 1975, Washington placed a trade embargo on Vietnam that was maintained until 1994.

The upgraded partnership is as much about Chinese mis-steps as it is about US persistence, said Peter Mumford, a south-east Asia analyst for Eurasia Group. 

“There’s been some strategic self-harm by China,” Mumford said, citing a step-up in intimidation of Vietnamese vessels in the South China Sea as one example. “This is an unusual and significant step for Vietnam and it is a sign of how strong Hanoi’s desire is to counterbalance ties with China.”

Beijing’s pressure campaign has already pushed the Philippines closer to the US, with Manila allowing America access to four more of the country’s military bases earlier this year.

Vietnam’s move is likely to trigger disquiet in Beijing. China had dispatched a top official to Hanoi earlier in the week at short notice ahead of Biden’s scheduled visit. The head of the Chinese Communist party’s international department Liu Jianchao met Trong and both agreed to “consolidate political mutual trust”. 

“This is a decisive step into the US orbit,” said Simon Tay, chair of the Singapore Institute of International Affairs. Hanoi has indicated it will also boost ties with Australia, Singapore, Indonesia and Japan. 

As well as having security implications, such as potential defence co-operation, the new US status also carries economic importance, especially in crucial industries such as semiconductors.

The agreement includes a new US-Vietnam chip partnership to “support resilient semiconductor supply chains for US industry, consumers, and workers”, according to a White House statement. The deal will help expand Vietnam’s semiconductor capacity in support of US business, the statement said.

Since the 1990s, Vietnam has transitioned from centralised economic control to a more open model, and the US is its largest export market. It was the fastest growing economy in Asia last year.

“The American business community is hopeful about seeing continued improvement in tariffs and technology and intelligence transfers in particular,” said Greg Testerman, chair of the American Chamber of Commerce in Vietnam. 

The likes of Dell, Google, Microsoft and Apple have expanded or are setting up in the south-east Asian country to diversify their supply chains away from China.

Big US technology and manufacturing companies, including semiconductor groups, are expected to attend a business meeting on Monday as Vietnam seeks more high-tech and other investment from the US. 

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