Xi Jinping to visit Hanoi amid growing closeness between US and Vietnam

Observers believe the Chinese President’s two-day visit from Tuesday is likely to intensify the competition between the two global rivals.

Three months after Vietnam and the United States upgraded their relations to the level of Comprehensive Strategic Partnership, Chinese President Xi Jinping is visiting Hanoi this week to reaffirm Beijing’s strong ties with its fellow communist partner.

The Chinese President’s visit coincides with the 15th anniversary of the signing of the "Comprehensive Strategic Partnership" between the two countries. But Xi’s third visit to Vietnam after a gap of six years comes at a time when China and the US are jousting for influence over this strategically important Southeast Asian country.

Observers believe the Chinese President’s two-day visit from Tuesday is likely to intensify the competition between the two global rivals.

Vietnam also has a strategic partnership with Russia, South Korea and India—countries it considers to be close.

But its decision to accord the same status to the US has led to speculation of a new strategic alignment in a region where China’s aggressive rise has raised serious concern among its neighbours.

Xi’s visit also comes when Beijing and Hanoi are embroiled in the Spratly Islands dispute in the South China Sea with divergent territorial claims.
However, experts feel these are unlikely to stand in the way between the two countries in other areas of mutual benefit.

During the visit a multi-billion-dollar rail link and mining of rare earth projects are likely to be finalised between the two sides.

Despite their maritime dispute, Xi Jinping will be a welcome guest in Vietnam. He will be given a 21-gun salute on arrival and hold talks with the general secretary of the Vietnamese Communist Party Nguyen Phu Trong, the top leader of the country and other senior members of the party.

Xi Jinping’s last visit to the country in 2017 had coincided with Donald Trump’s trip and the American President launching his trade war with China which led a number of firms to relocate billions of dollars from China to Vietnam.

Experts say that while China poses a territorial threat to Vietnam in the South China Sea, it also has every interest in the Communist Party of Vietnam maintaining its monopoly on power.

On the other hand, most Vietnamese leaders believe that though the US says it is committed to working with Vietnam and respects its political system given the first opportunity of supporting a “colour revolution”, America would be there.

Territorial dispute

Vietnam, which shares both a land boundary and a coastline with China, has often been exposed to its aggressive policy. Their maritime dispute in the South China Sea over the Spratly Islands has turned violent on past occasions.

Vietnam has accused China of using its maritime militia to attack its fishermen in disputed waters as recently as in May this year. Though Vietnam treats China as its primary strategic security threat, the two governments continue to work closely. They have managed to separate the dispute from the range of issues involved in their bilateral relations.

Trade and investment

China is Vietnam’s largest trade partner and second biggest export market. The bilateral trade between the two countries reached over $230 billion. China is also a major source of foreign investment in Vietnam and Vietnam is China's top trading partner among countries in the Association of Southeast Asian Nations. China plans to set up a billion-dollar rail link project to connect northern Vietnam with south China.

The country has already invested in the single-line Hanoi metro system under its Belt and Road Initiative. China, which has a near monopoly on rare earths refining globally, now wants to invest in Vietnamese mining projects. China has the largest rare earth reserve in the world and Vietnam has the second-largest reserve.

Rare earths, used in devices ranging from smartphones to fighter jets, are considered highly strategic due to the resources’ essentiality in modern technology. Since China dominates global trade in rare earths, the US and its allies fear losing access in the event of a serious conflict with Beijing.
Given the resources’ geopolitical sensitivity, Vietnam’s friends who are already concerned about China’s aggression, want to develop Hanoi’s rare earths sector without Chinese involvement.

US is a hedge against China

It is China’s aggression that led Vietnam to develop relations with the US, its former enemy. Biden’s visit to Hanoi in September brought the focus on the rapid growth in bilateral relations between Washington and Hanoi in recent months. The US has now become Vietnam’s largest export market and trade between them reached $142 billion.

In recent years, the US has become Vietnam’s top export market, worth $127.5 billion. Vietnam is also a popular destination for American multinational corporations like Apple, Dell, Google, and Microsoft, which have invested in the country as an alternative to China.

Vietnam has announced that its electric vehicle (EV) maker, VinFast, will invest $6.5 billion in a manufacturing complex in North Carolina.

But despite the growing ties with the US, Vietnam is unlikely to dump China which continues to be an important partner for its economic growth and development. Moreover, politically the two communist countries are also aligned.

Building ties with the US may help Vietnam to hedge against China. But it is unlikely to join forces with America in the event of a conflict in the South China Sea between the two global rivals.