Vietnam is finding the center of a great power rivalry isn’t such a bad place to be. Everyone is sidling up to the communist nation these days.
China’s Xi Jinping became the latest world leader to strengthen ties with the country by paying a visit to Hanoi this week, three months after Vietnam upgraded its relationship with the U.S. to the highest rung in its diplomatic hierarchy during a visit by President Biden. -
Vietnam greeted Xi with a 21-gun salute, the highest level for a visiting head of state, when he arrived on Tuesday for the two-day visit, his first in six years. The two sides agreed to build a Vietnam-China community “with a shared future, which holds strategic significance"—diplomatic language that indicates that however much Vietnam is being wooed by the West, it intends to maintain its close political and economic ties with its giant northern neighbor.
“China sees the U.S. rivalry, and therefore they have to counter," said Carlyle Thayer, emeritus professor at the University of New South Wales, Canberra, and an expert on Vietnam. “Vietnam tries to get as much as it can from each one."
For Vietnam, it is what Vietnam’s Communist Party head, Nguyen Phu Trong, calls “bamboo diplomacy," to describe foreign relations that are firmly rooted, but flexible.
Vietnam has long had a close but at times contentious relationship with China. The two countries fought a war in 1979 and have had heated disputes in recent years over what Beijing calls the South China Sea and Hanoi refers to as the East Sea.
In recent decades, Vietnam has been close to Russia, its main weapons supplier. Lately, though, the country has sought to diversify, drawing a wider circle of countries a little closer.
Last December, South Korea became a comprehensive strategic partner, gaining admission to what was, until recently, a highly exclusive club of Vietnam’s closest friends, such as China and Russia. The U.S. got the nod in September. In November, Japan entered the pantheon. During a visit by Prime Minister Anthony Albanese earlier this year, Australia has said it wants in too, and analysts say that is likely to happen.
The U.S. is increasingly trying to give manufacturers, particularly of high-tech products, options to move their factories out of China—and Vietnam is one of the places companies are turning to. Trade between the U.S. and Vietnam reached $140 billion in 2022, more than seven times as large as it was in 2010. The increase has been driven by Vietnamese exports such as electronics and shoes.
Vietnam, meanwhile, would like to see blossoming diplomatic ties with wealthy countries encourage companies such as South Korea’s Samsung and the U.S.’s Apple to deepen their production networks there. The country will need to boost jobs, income and exports to reach its goal of becoming a high-income nation by 2045, no easy task when its gross domestic product per capita is around $4,000, compared with $80,000 for the U.S.
At the same time, Vietnam can’t afford to alienate Beijing: its neighbor and largest trading partner. Its total trade with China last year was around $235 billion, according to Chinese data. Many of the products Vietnam churns out for the U.S. and its allies rely on raw materials sent over the border from China. Some of the companies in Vietnam making parts for Apple devices are themselves Chinese.
Something else that hasn’t gone unnoticed by the U.S. and China: Vietnam has among the world’s largest reserves of rare-earth minerals, which are essential for making everything from jet fighters to smartphones. China dominates the rare-earths market, but a host of companies are working to build China-free supply chains.
There are other factors holding Vietnam back from a wholesale embrace of the West, including an allergy to Western human-rights rhetoric. The country also sees a need to maintain its close ties with Russia. Although Vietnam has begun to diversify sources of weapons over the last decade by buying from countries such as Israel and South Korea, few countries have arms industries on the scale of Russia.
China isn’t likely to serve as a replacement arms supplier, in part because many in Vietnam remain wary of their powerful neighbor because of the 1979 war and the dispute over the South China Sea. China’s placement of an oil rig in what Vietnam considers its territorial waters spurred violent protests in 2014. During Xi’s visit, the two sides agreed to maintain stability over the disputed body of water.
In his conversations with Vietnamese officials this week, Xi called for “more input to cement the popular support for China-Vietnam friendship." In a nod to their shared ideology, Xi said the two countries should “keep to socialism without any deviation." On Wednesday, the Chinese leader paid tribute to the founding leader of communist Vietnam, laying a wreath at the mausoleum of Ho Chi Minh.
Despite rising tensions between China and the U.S., Vietnam appears to be striking a balance—reaping rewards from both communist China and Western-style democracies alike. During Biden’s visit, the U.S. agreed to boost Vietnam’s semiconductor industry by jointly developing teaching labs and training courses to boost the country’s industrial workforce. For his part, Xi proposed cooperation in green energy and critical minerals, in an article that appeared in a Vietnamese newspaper in tandem with his visit.
“They are managing this really well," said Nguyen Khac Giang, a visiting fellow at ISEAS-Yusof Ishak Institute, a Singapore research group. Vietnam is “taking advantage of their geopolitical position to optimize the benefit by cooperating well with both China and the U.S.," he said.
Vietnam’s appeal is that it is an independent actor that isn’t going to gang up against anyone, said Thayer. “And if you don’t join the party you’re going to lose out, it is an opportunity lost," he said.
Wenxin Fan contributed to this article.
Write to Jon Emont at jonathan.emont@wsj.com
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