SAWT BEIRUT INTERNATIONAL

| 16 July 2024, Tuesday |

US expects to upgrade Vietnam ties, risks China anger

The US aims to boost its diplomatic relations with erstwhile rival Vietnam to the highest degree when President Joe Biden visits Hanoi next week, a decision that may irritate China and has unknown commercial ramifications.

Fearing repercussions from its much larger neighbor, Vietnam first raised reservations about the improvement. As a result, the Biden administration has increased its efforts to convince the Southeast Asian nation, including several visits by high-ranking officials of the US government in recent months.

The extraordinary drive has prompted Washington to hope that it would be promoted to the top tier of Vietnam’s diplomatic ranking, with China and Russia, from two notches below where it is presently.

Biden said it publicly in July and officials in both countries have since informally expressed optimism about the two-step upgrade, although no official statements have been released from either government.

Perhaps seeking to assuage Beijing, Vietnam is discussing top-level visits to Hanoi after or even shortly before Biden’s arrival on Sept. 10, with officials saying China’s President Xi Jinping and Prime Minister Li Qiang could meet Vietnamese leaders in coming days or weeks.

China’s foreign ministry did not immediately respond to a request for comment on Monday.

Risks that a double upgrade with Washington may not go down well in Beijing remain high, but Vietnam’s communist leaders may have calculated the best timing for the move is now as U.S. relations with China are “likely to get worse in the future,” said Le Hong Hiep, a senior fellow at Singapore’s Iseas–Yusof Ishak Institute.

“Vietnam’s economy badly needs a boost in capital, technology, and market access”, said Alexander Vuving of the Hawaii-based Inouye Asia-Pacific Center for Security Studies, noting that may have been a key reason for the possible upgrade.

A boost of U.S. military supplies to Hanoi has also long been discussed but no immediate deal is expected as these talks take time, Hiep said.

Meanwhile, Vietnam is talking with several other countries to upgrade and expand its mostly Russian-made arsenal, and has recently engaged in multiple high-level defense meetings with top Russian officials.

Supporting Vietnam’s ambitions to become a hub for the semiconductor industry is also part of Washington’s inducements, but public funds so far available under the CHIPS Act are very limited.

The U.S. may offer more, said Vu Tu Thanh, head of the Vietnam office of the US-ASEAN Business Council.

Energy is another sector where cooperation could increase as Vietnam prepares to become a player in Liquefied Natural Gas (LNG) and offshore wind although administrative and funding delays are dampening the mood.

The upgrade of relations is expected to boost U.S. firms’ plans in Vietnam. Planemaker Boeing (BA.N) and energy firm AES (AES.N) may make announcements during Biden’s visit, people familiar with the plans said. The companies had no immediate comment.

The U.S. is already Vietnam’s largest market for its exports and U.S. customs procedures could be eased to boost trade, Thanh from the US-ASEAN Business Council.

    Source:
  • Reuters