Thayer, The Impact of The China Factor On Vietnam's Trade and Comprehensive Strategic Partnerships With The West

The Impact of the China Factor on
Vietnam’s Trade and Comprehensive

Strategic Partnerships with the West
Carlyle A. Thayer
Presentation to Business Lunch,
Australia-Vietnam Business Council Queensland,
Brisbane Club, Brisbane, Queensland,
March 13, 2024.
How did we get from there to here?
China
China Australia Russia

2008
Viet
Nam
VN Japan India
India Russia
2016 2012
United South
States Korea
Outline
1. The China Factor – Part 1
2. Vietnam’s Strategic Partnerships
3. 13th National Congress of the Vietnam Communist
Party
4. Vietnam’s New Comprehensive Strategic Partners
6. Conclusion
1. The China Factor
Asymmetric Relations
• Vietnam at 100 million people is comparable to a
middle-sized Chinese province
• 1991 China and Vietnam normalised diplomatic
relations after the conflict in Cambodia
• March 1999 CCP VCP Summit adopts sixteen character
guideline “long-term, stable, future-orientated good
neighbourly and all round coopertative relations”
• 1999-2000 land border and Gulf of Tonkin demarcated
The China Factor
• 2006 China-Viet Nam Joint Steering Committee for
Bilateral Cooperation established
• June 2008 China became Vietnam’s first “strategic and
comprehensive cooperative partner/comprehensive strategic
partnership of cooperation”
• Vietnamese/Chinese translations of official text
• 2009 China becomes Vietnam’s largest trade partner
• 2009 East Sea/South China Sea become bilateral issue
Four No’s and One Depend
Vietnam’s Defence White Paper 2019
1. neither joining any military alliances,

2. siding with one country against another,
3. giving any other countries permission to set up military
bases or use its territory to carry out military activities
against other countries
4. nor using force or threatening to use force in
international relations.
• Depending on circumstances and specific conditions, Viet Nam
will consider developing necessary, appropriate defence and
military relations with other countries
2000-2022
• Vietnam has a consistent
trade deficit
• Vietnam’s export levelled
off in 2018 and 2019
• China’s trade surplus grew
in 2021 and 2022
• Vietnam’s exports
declined in 2022
• National People’s
Congress sets 5% GDP
rate for 2024
2. Vietnam’s Strategic
Partnerships
Diversifying and
multilateralising
external relations,
2001-2015
Thirty partners by
2022
Vietnam’s Hierarchy
Comprehensive Strategic Partners
4 in 2022
Strategic Partners
13 in 2022
Comprehensive Partners
13 in 2022
Vietnam’s Free Trade Agreements
• 1993 ASEAN Free Trade Area • 2016 Eurasia Economic Union
• 2005 ASEAN-China Economic FTA
Cooperation Agreement • 2019 Comprehensive and
• 2007 ASEAN-ROK Progressive Trans-Pacific
Partnership
• 2008 ASEAN-Japan
• 2020 EU-Vietnam FTA
• 2009 Vietnam-Japan
• 2021 UK-Vietnam FTA
• 2010 ASEAN-Australia-New
Zealand FTA • 2022 Regional Comprehensive
Economic Partnership
• 2015 Vietnam-ROK FTA
3. 13th National Congress of the Communist
Party of Vietnam February 2021
Concrete Goals
• By 2045 - Vietnam shall be a high-income developed
country.
• Key targets from 2021 to 2025:
• Economy: Average annual economic growth over the next five
years shall be 6.5 to 7%.
• By 2025, the proportion of processing and manufacturing
industry in GDP shall reach over 25%; the digital economy
shall account for about 20% of GDP.
13th National Party Congress
on Military Modernisation by 2030
Resolution (February 2021)
“build a streamlined and strong Army by 2025, and a

revolutionary, regular, advanced and modern People’s
Army by 2030”
It was assumed that Vietnam would rely on Russia to supply

big ticket military platforms and defence technology.
4. Vietnam’s
China
New
Comprehensive Australia Russia
Strategic
Partners (CSP) Viet
Nam
Japan India
United South
States Korea
Vietnam-South Korea CSP
December 2022
• Vietnam wishes Korean businesses make new
investments and expand their investment scale in the
fields of electronics, renewable energy, infrastructure
development, tourism, construction of specialized
complexes, zones industry - high quality agriculture,
green industrial park, smart city; support Vietnamese
businesses to participate more deeply in the global
supply chain.
Vietnam-South Korea CSP
December 2022
Increase Cooperation of Politics,
Defense and Security
This section promotes strengthening defence

cooperation through technology, defence industry, and
education and training.
Politburo Directive No. 24
July 13,2023
On Ensuring National Security in the Context of
Comprehensive and Deep International Integration
• “comprehensive and deep international integration and
implementation of trade agreements has created new
difficulties and challenges for national security”
• 2019 Comprehensive and Progressive Trans-Pacific Partnership
(CPTPP)
• 2020 European Union-Vietnam Free Trade Agreement
• Indo-Pacific Economic Framework for Prosperity (IPEF)
Vietnam-United States CSP
September 2023
The US pledged further support for Vietnam in manufacturing,
high quality digital and physical infrastructure development,
just energy transition, sustainable and smart agriculture, and
broader and sustained participation in regional and global
supply chains, with a particular emphasis on Vietnam’s
Mekong Delta region.
Caveats: market access barriers, non-market economy status,
transparency of monetary policy, Chinese sourced materials, Uighur
forced labour products. US not a party to CPTPP, IPEF has stalled
Vietnam-United States CSP
September 2023
Defense and Security
• “further cooperation in defense industry and defense

trade in accordance with each side’s conditions
through mutually agreed mechanisms”
• US “to assist Vietnam to develop its self-reliant
defense capabilities in accordance with the needs of
Vietnam and established mechanisms”.
Vietnam-Japan CSP
(November 2023)
• 20. Japan expressed its intention to conduct
activities that contribute to supply chain
diversification and upgrading for Japanese
companies, as well as facilitate Vietnamese
businesses to participate more deeply and
substantially in the Japanese businesses-led
global supply chain.
• Promote high quality agricultural cooperation
Vietnam-Japan CSP
(November 2023)
Peace and Prosperity in Asia and the World
• The two leaders agreed on “transferring defense

equipment and technology to the Ministry of National
Defense of Vietnam”.
• They also agreed to assign relevant agencies to discuss
the content of Japan’s new Official Security Assistance
(OSA).
Vietnam-Australia CSP
(March 2024)
Defence Cooperation
Expanded to include defence industry, maritime

security, information and intelligence sharing,
strengthening maritime cooperation, and enhancing
cooperation in cyber-security and critical technology,
including through cyber security capacity-building
initiatives to address cyber security threats.
•
• China response to US- Vietnam-US CSP
• Xi Jinping visits Hanoi to “elevate and deepen” comprehensive
strategic cooperative partnership
• Two leaders agree to build a “Vietnam-China Community with a
Shared Future having strategic significance ”
• China wants to join CP TPP
• China response to Australia- Vietnam-US CSP
"Development and cooperation is the common aspiration of
countries in Asia-Pacific, and moves to stir up bloc confrontation
and make exclusive cliques are against the countries' wishes."
China’s Foreign Ministry spokesman Wang Wenbin commenting on the joint
statement issued by Vietnam and Australia, March 11, 2023
6. Conclusion
• Vietnam at mid-way point between national party
congresses (2021-2026)
• Global economy is slowing, China is experience difficulties
recovering from COVID-19 shut down and other economic
problems
• Vietnam’s new CSPs aimed at breakthrough to attain 13th
congress goals via Fourth Industrial Revolution in technology
• Trade and investment, digital transformation, energy
transformation, military modernisation
The Impact of the China Factor on
Vietnam’s Trade and Comprehensive
Strategic Partnerships with the West
Carlyle A. Thayer
Presentation to Business Lunch,
Australia-Vietnam Business Council Queensland,
Brisbane Club, Brisbane, Queensland,
March 13, 2024.

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The Impact of the China Factor on

Vietnam’s Trade and Comprehensive

China Australia Russia

1. neither joining any military alliances,

“build a streamlined and strong Army by 2025, and a

It was assumed that Vietnam would rely on Russia to supply

This section promotes strengthening defence

• “further cooperation in defense industry and defense

• The two leaders agreed on “transferring defense

Expanded to include defence industry, maritime

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