Rebalancing diplomatic ties among nations in the Indo-Pacific amid strained relations with and between some of them is the new definition of diplomacy now. Each country pursues it foreign policy based on its national interests, be that on economic, political or strategic considerations. In this case, Vietnam comes to mind where this hypothesis can be tested. Vietnam has serious issues with China over the South China Sea where both have competing interests and given the strong anti-China sentiment in Vietnam but the economic content in the relationship remains unaffected. This consideration has helped to keep dialogue at diplomatic level open.

Visits by top leaders by either country have been on-going. The latest in this process is the four-day official visit of Vietnamese Prime Minister Pham Minh Chinh to China from 25 to 28 June 2023, the first since holding office two years ago, during which he attended the Summer Davos Forum, also known as the World Economic Forum’s Annual Meeting of the New Champions 2023, held in Tianjin Municipality in northern China, and discussed a host of issues with his counterpart. What is significant was the visit by a Vietnamese Prime Minister, first in seven years, came amid complex and unpredictable international environment and the downturn of the world economy.

Economic Cooperation

Chinh’s visit was in pursuance of the visit of General Secretary of the Communist Party of Vietnam Nguyen Phu Trong in October 2022, during which Trong and Chinese President Xi Jinping laid out the blueprint for a comprehensive strategic cooperative partnership between the two countries in the new era.^[1] Vietnam does realise that China is its largest trading partner and fourth largest trading partner in the world, largest import market and second largest export market. The total bilateral two-way trade touched $175 billion in 2022, accounting for a quarter of the total trade turnover between China and ASEAN. Vietnam is China’s largest trading partner in ASEAN. Trong and Xi discussed on how to deepen cooperation under China’s Belt and Road Initiative, strengthening connectivity and stabilising production and supply chain. Both sides agreed to deepen bilateral cooperation that would boost economic recovery.

That was Trong’s first foreign visit since being re-elected as CPVCC General Secretary in January 2021 and the first by a foreign leader to China after the conclusion of the 20th National Congress of the CPC. The visit was at the invitation of Chinese President Xi Jinping. Even during the COVID-19 pandemic, both side maintained frequent high-level exchanges and in different areas.^[2]

One major highlight in Chinh’s China visit was his visit to Xiong’an New Area in Hebei province, 100 km southwest of Beijing, on 28 June.^[3] Why this visit to Xiong’an New Area was significant was because it is a national pilot new economic zone based on innovation, digital economic development, and green and small city, which focuses on prompting harmonious interaction between people and the environment.

While addressing the Vietnam-China Trade and Investment Cooperation Forum in Beijing, Chinh called on Chinese investors to expand investment in Vietnam. Participants from both sides introduced their respective economic development situation, the business and investment environment, and investment attraction policies of both as well as bilateral cooperation.

It also transpired that China has plans to organise many business and investment cooperation and promotion activities and prioritising green development, digital economy, and climate change adaptation, and encourages and creates favourable conditions for competent enterprises to invest in Vietnam. On his part, Chinh underlined the need to find the best solution for investors and researchers to contribute to the development of bilateral relations. He also stressed the need to reviewing and perfecting the legal framework, mechanisms and policies, improve the business environment to create favourable conditions for businesses to promote trade and investment between the two sides. What was needed is to create exclusive working group on trade and investment.

Maintaining quality control of products to make those attractive and competitive is a major priority for Vietnam. In order to achieve this, Vietnam has prioritised investment projects in high technology, innovation, and development research and encourages public-private partnership. Vietnam would welcome Chinese investments in strategic infrastructure works such as highways and railways.^[4] Chinh welcomed the building of a smart border gate model between Lang Son province of Vietnam and Guangxi province of China.

The issues of stable supply of electricity for production facilities and enough materials for ground clearance to build industrial parks, and removing obstacles in regulations on fire prevention and control were also discussed. Chinh therefore encouraged Chinese businesses to invest in renewable energy, power transmission system building, and supporting industry for the garment and textile sector.

Issue of South China Sea

In the economic domain, things seem to be moving in the right direction. But the bigger challenge confronting both sides is how to resolve the contending claims on the South China Sea, which continues to be a flashpoint, besides the Taiwan Straits, because of Beijing’s uncompromising position and threat to use force to enforce its claims by disregarding claims of others.

If a conflict breaks out over South China Sea, Vietnam though tough, is no match for China whose military muscle could easily overwhelm any small nation in contemporary times. As Vietnam shall be unwilling and unlikely to face China in a conflict situation, it needs allies and partners. Fortunately Vietnam’s interests match well with many of its friendly countries, the biggest being the United States, India and Japan. As a first, as Hanoi walks a tight rope, it seeks a US presence in the region, though it would feel uncomfortable to be dragged into US-China rivalry.

With a view to mange things and not allow the existing tensions to escalate, PM Chinh met with his Chinese counterpart Li Qiang and discussed how to manage their South China Sea disputes through dialogue and cooperation. Though both agreed not to enter into a conflict over this issue, there is no sign of a resolution on the horizon. A Code of Conduct (COC) has been on the cards for the ASEAN countries and China for some time but remains elusive so far due to disagreements on terms and conditions. The stances of the claimants (Brunei, the Philippines, Indonesia, Malaysia, Taiwan and Vietnam) on the nature and origins of the dispute are so complex that no easy resolution can be expected in the near term.^[5] All of these have disputes with China.

This time Chinh and Li Qiang pledged on ‘guiding the settlement of sea-related issues’ and agreed to cooperate on an “effective Code of Conduct in the South China Sea” and “low sensitivity” marine area amid tensions on territorial disputes. In a joint statement, the two sides affirmed their pledge to work together to reach a substantive and effective COC that is consistent with international law, including the 1982 UN Convention on the Law of the Sea (UNCLOS), at an early date.^[6]

Both the leaders underlined the need to avoid confrontation and boost mutual trust at sea. In fact a dialogue mechanism was crafted in 2012 to cooperate on “less sensitive” areas such as fisheries, marine protection and research and rescue as well as tourism and environmental protection. That understanding received a reconfirmation this time in the joint statement.^[7]

Having agreed to push ahead with the comprehensive and effective implementation of the Declaration on the Conduct of Parties in the East Sea (DOC), both leaders agreed to continue negotiations and aim to reach consensus and then agree on a substantive and effective Code of Conduct in the East Sea (COC) in line with international law, including the 1982 UNCLOS.

The South China Sea is not the only body of water that is in dispute. The control of water is another where China has built massive dams where it can control the flow of water. While China is in the upstream, Vietnam and four other countries are in the downstream where China’s 11 giant dams can disrupt by controlling waters affecting the livelihood of an estimated 60 million people at the Mekong Basin. Climate change, a new global issue, has the potential to make water scarcity a source of conflict.

For now, handling the South China Sea issue needs deft handling through diplomatic channels. China does not rejoice that the conflicting maritime claims of some Asian countries, including Vietnam, are analysed in terms of the Sino-US geopolitical rivalry. If Beijing is serious to see Vietnam as a key player in resolving the South China Sea issue by endorsing its position, it is unlikely to succeed as Hanoi shall have neither the desire nor capability to work to diminish the US influence in the region. No matter how Beijing may work to wean away Vietnam to get to its line of argument, Hanoi would be unwilling to deviate from its position in standing with the US on its maritime claims issue.

Despite that Vietnam does not want to derail its economic ties with China, the nationalistic anti-China sentiment remains high, which Vietnamese leadership keeps under control. That does not mean that it can afford to undermine its relations with the US. Vietnam has joined the US Navy’s freedom of navigation exercise. Hanoi of course knows that it cannot afford a free lunch as Washington expects some payback from Hanoi for its strategy to contain China in the Indo-Pacific. Since both Hanoi and Beijing are aware of this delicate and complex security matrix, Chinh and Li Qiang managed well in handling the issue during discussions through normal diplomatic niceties like smiling and shaking hands. If there was real warmth between the two leaders, one cannot say.

The Chinese perception of Vietnam is coloured by historical experiences. Its attitude for Vietnam is shaped according to this perception. In the past, China had colonised northern Vietnam and later by the French and the US. This gives a sense of superiority to China, which is why it wants to legitimise its claim of the “nine-dash line” in South China Sea. But it is in China’s best interest to shed this historical arrogance as Vietnam as a nation fought first the Chinese, then the French and finally the US fiercely and defeated all three of these colonial powers. Moreover, the world today is much different than what it was in the past. It would be in China’s best interest that it realises this historical truth and conducts its foreign relations accordingly. The same argument also applies to China’s relations with India. That is a separate issue to be discussed elsewhere.

Interestingly, both China and Vietnam claim their rights over the Paracel and Spratly Islands and the fishing rights therein dating back to centuries. The exclusive economic zone came later as a defining demarcation as new laws were framed after World War II. While China’s claims go back to the 19th century, Vietnam’s claims even date further back to 17th century. Vietnam claimed these islands until the first half of the 19th century but no country disputed. Then imperial France started claiming its right after it colonised Vietnam and acquired international legal right. The late Qing dynasty formally contested but of no avail.

During World War II, the islands briefly served as a Japanese naval base. After Japan’s defeat, it was the Kuomintang or Nationalist government in China that drew up the nine-dash line in 1947 that included the islands. When the Kuomintang lost to the Communists in the civil war and fled to Formosa (now Taiwan), the communists inherited the claims. Such claims remained dormant for more than half a century. China has now become vociferous on such claims as it has acquired military muscle, economic strength and assumed great power ambitions.

When China started creating problems by asserting its claims to most of the waters in the South China Sea, including to the EEZs of some countries in the region, Philippines approached the Permanent Court of Arbitration in The Hague. In July 2016, the tribunal ruled China’s nine-dash line had no legal validity. After this historic legal victory by the Philippines, other claimants started asserting their rights too.

There is a twist to the Chinese argument about the tribunal’s ruling. In a 2019 judgment, The Hague court ruled that the Chagos Archipelago under British and American occupation must be returned to Mauritius. China might argue that if the US would be unwilling to let go of the military base on Diego Garcia, the largest of the islands as it is key to its Indo-Pacific strategy despite the tribunal’s ruling, it might as well stick to its assertion over the Spratly archipelago as these islands play a significant role in China’s naval expansion in the South China Sea. Chinese thinking could be that if Mauritius can work out with Britain and the US bilaterally and not resort to international law, its own position to deal the South China Sea issue bilaterally with negotiations addressing the issue of maritime disputes is not unreasonable and thus justified. However, China would be found wanting to justify its military installations on the Spratlys and pursuing a policy of coercion to assert its claims that impact not only Vietnam but other claimants and so comparison with Mauritius would be unsustainable. Be that as it may, ideological compatibility with communism as the binding force has not deterred either country to allow history and nationalism to take precedence. As observed earlier in this essay, public opinion in Vietnam remains highly nationalistic when it comes to China despite heavy economic overtones. Conversely, nationalist sentiments in China towards Vietnam are no less fiery. For now, both seem to be soft-peddling with each other without burying their hostility.

Vietnam’s Counterpunch

If this is the situation where Vietnam is positioned, having more friends as insurance in time of crisis is the safe option. Interestingly, the US which was locked in a fierce war with Vietnam is now one of its best friends. Here, ideology has no role but only strategic interests. Same goes with its relations with India and Japan, two major regional powers in the region. In the larger Indo-Pacific region, Vietnam though not a member of the Quad is being talked about as a potential member of the grouping when and if a decision is taken to induct new members. Besides economic ties whose future looks more promising than at present, the convergence of strategic interests is a strong pulling factor towards each other. Let me leave Japan aside for a while and explain what drives Vietnam closer towards the US and India.

The US remains the sole global power in a unipolar world, though China is an aspiring but a threatening power. History backs India’s case as it was, is and shall never be a threatening power in the future. Its cultural connect, the soft power, has always remained a stronger power than what hard power could do. There is a third category called smart power. The categories of powers needs no further explanation in this essay as the focus would be diluted. As regards the US, it has responsibility to help maintain a peaceful global order and protect/defend global laws. It has sold weapons to friendly nations to strengthen their defence capability. It has deployed combat ships in international waters to protect the maritime space.

In view of the lurking threat from China, the US combat ship, nuclear-powered carrier USS Ronald Reagan made a rare port call in Central Vietnam’s port city of Da Nang amid tensions with Beijing in the South China Sea in June 2023. It remained at the port from 26 to 30 June 2023.^[8] The visit of the USS Ronald Reagan was only the third for a US aircraft carrier since the end of the Vietnam War. Earlier in 2020 that marked the 25th year of the end of the Vietnam War in 1975, USS Theodore Roosevelt stopped in Vietnam. In view of Vietnam’s frequent disputes with Beijing over boundaries in the South China Sea, the US has sought to upgrade its formal ties with Vietnam and calm tensions. The visit of the combat ship to Da Nang is a demonstration of that commitment.

US carriers frequently cross the energy-rich sea, which contains crucial routes for global trade. The warships are often shadowed by Chinese vessels. Around the time USS Ronald Reagan made port call in Da Nang, a Chinese aircraft carrier Shandong and a group of escorting vessels sailed south through the sensitive Taiwan Strait. Because of such experiences, the US naval presence can have calming influence and help maintain global order.

Positioning India

India is not a claimant in the South China Sea but has huge interests that peace and stability are not unduly altered. It has strong economic and strategic relations with some of the claimant countries and cannot escape taking a position on the developments in its extended neighbourhood when situation turns volatile. India has articulated its positions in regional forums like the Quad. That is not enough. In the background of the increasing and deepening ties between India and the US and with some of the Southeast Asian nations, Washington would expect India not to remain as a bystander but an active participant. India has decided to do just that and crafted its foreign policy strategy accordingly. China is quite uncomfortable that India enjoys pre-eminence in the Indian Ocean region and wants to alter this.

In discharging its responsibility as a regional power with interest to maintain peace and stability in the region, India has done its bit like the US. Besides participating in bilateral and multilateral naval exercises with the US including the Malabar, India has shown its commitment to take a strong position when a regional issue is at stake. During the visit of Vietnam Defence Minister to India in June 2023, India decided to gift an active duty corvette, the INS Kirpan. Though India has gifted smaller boats to the Maldives and Mauritius, and a submarine to Myanmar in the past, it was for the first time India gifted a warship to a country (Vietnam) embroiled in a maritime dispute with China.^[9]

The INS Kirpan is fitted with medium-and close-range guns, chaff launchers and surface-to-air missiles. Though India has no claims in the area, it has partnered with Vietnam in several joint military exercises and sold weapons to the Philippines. The ONGC’s overseas wing ONGC Videsh Limited (OVL) is engaged in oil drilling activities in Vietnam’s EEZ and needs to defend if its interests are affected by any outside power. There is no denying that the gift of a missile corvette is to help Vietnam in countering the unsafe manoeuvres by Chinese vessels in its EEZ. China might be uncomfortable and even sensitive to the presence of Indian navy in the South China Sea but India has obligations in larger interest of peace and stability in the region to be there. The gifting of the corvette is to assist a like-minded partner in enhancing capacity and capability and thus in tune with India’s foreign policy.

For the first time, India came out clearly making its position on the 2016 arbitral award on South China Sea in favour of the Philippines government, which termed China’s expansive claims and assertiveness in the disputed oil-rich waters as invalid and told China to abide by the UNCLOS.^[10] Coming on the back of a downward spiral in bilateral ties with China caused by the 2020 Ladakh standoff and yet to be resolved, India’s statement was massive. India’s position came clearly when External Affairs Minister S. Jaishankar and his Philippine counterpart Enrique Manalo issued a joint statement that called for peaceful settlement of dispute and for adherence to international law and the arbitral award of 2016. China might be fuming with India making such a statement seven years after the announcement of the award, but Vietnam would certainly be rejoicing and see India’s statement as icing in the cake. Therefore, Prime Minister Chinh’s visit to China and discussion with his counterpart needs to be examined in the context of India’s open statement on the South China Sea. The world would be a better place if such issues are settled by diplomacy and amicably.

References

^[1]https://www.msn.com/en-in/news/other/vietnamese-pm-visits-china-for-first-time-since-holding-office/ar-AA1d2dax
^[2]Jia Duqiang, “Vietnam leader’s visit to China to boost cooperation”, China Daily, 29 October 2022, https://usa.chinadaily.com.cn/a/202210/29/WS635c8669a310fd2b29e7f351.html
^[3] “PM Pham Minh Chinh visits China’s Xiong’an New Area”, 28 June 2023, https://en.vietnamplus.vn/pm-pham-minh-chinh-visits-chinas-xiongan-new-area/255419.vnp
^[4] “PM calls for more Chinese investments”, 28 June 2023, https://en.vietnamplus.vn/pm-calls-for-more-chinese-investments/255398.vnp
^[5]Alex Lo, “Vietnam and China agree to play nice over maritime disputes – for now”, 27 June 2023, https://www.scmp.com/comment/opinion/article/3225597/vietnam-and-china-agree-play-nice-over-maritime-disputes-now?utm_medium=email&utm_source=cm&ut
^[6]Laura Zhou, “China, Vietnam reaffirm pledge to work together on South China Sea ‘code of conduct’:, 30 June 2023, https://www.scmp.com/news/china/diplomacy/article/3226180/china-vietnam-reaffirm-pledge-work-together-south-china-sea-code-conduct
^[7] “Vietnam, China issue joint press release”, 30 June 2023, https://vietnamnet.vn/en/vietnam-china-issue-joint-press-release-2160052.html
^[8] “US combat ship to make rare port call in Vietnam amid South China Sea tensions”, 23 June 2023, https://www.wionews.com/world/us-combat-ship-to-make-rare-port-call-in-vietnam-amid-south-china-sea-tensions-607798
^[9] “Choppy Seas”, The Statesman, editorial, 30 June 2023, https://www.thestatesman.com/opinion/choppy-sea-1503195409.html
^[10]Devirupa Mitra, “For the first time, India calls for abiding by the 2016 arbitral on South China Sea”, 29 June 2023, https://thewire.in/diplomacy/for-the-first-time-india-calls-for-abiding-by-the-2016-arbitral-award-on-south-china-sea