China will react to Vietnam’s tilt toward America

When Vietnam’s Viettel announced on April 25 that it had successfully trialled the nation’s first 5G broadcast with bandwidth speeds similar to those piloted in the West, it marked a certain technological milestone for Southeast Asia. Viettel, the country’s military-owned largest telecommunications company, accomplished the feat without the help or technology of China’s leading telecom equipment maker Huawei, which stands accused by the US and others of spying on behalf of Beijing.

Across the world, from Australia to the Czech Republic, a “Huawei Curtain” is descending to separate countries loyal to the US, which warns allied nations against allowing Huawei to build their 5G telecom infrastructure, and those that aspire to deeper economic integration with China.

Vietnam has given Huawei the cold shoulder more for reasons of self-reliance than kowtowing to the US, it seems, but how Hanoi finally positions itself in the widening chasm between America and China will have big economic and security implications for the wider region.

“More friends and fewer enemies” was a policy the ruling Communist Party adopted in 1988, and today’s communist apparatchiks still cling tightly to the foreign policy blueprint.

China, Vietnam’s largest trading partner and communist cousin, has long held sway in economics and politics, while Russia remains Vietnam’s main military supplier.

But in recent years relations with America have soared with rising trade, closer diplomacy and Washington’s tacit vow to protect Vietnam’s interests in the South China Sea vis-à-vis China’s expansionism in the contested maritime area. That all raises questions about how China views Vietnam’s closer relations with the US and what it might do in response.

Derek Grossman, a senior defense analyst at the RAND Corporation, a US-based think tank, says that is it difficult to know exactly “because there isn’t much available in the public domain.”

“However, I suspect that Chinese policymakers continue to believe China maintains the preponderance of influence,” he said, “not only through their breadth and depth of economic exchanges… but through party-to-party relations bolstering their common socialist systems as well as both shared culture and history over millennia.”

China is now the largest foreign investor Vietnam, the main purveyor of its imports (35% of all Vietnam’s imports in 2017) and its second largest export destination, trailing only the US. China invested some US$1.6 billion in Vietnam in just the first four months of this year, according to the Ministry of Planning and Investment in Hanoi.

At the same time, the US has seen trade with Vietnam grow from $451 million in 1995 to more than $58.9 billion last year. Two-way trade has doubled in the five years spanning 2013 and 2018, official statistics show. FOLLOW THE LINK TO CONTINUE READING