Vietnam’s Pragmatic Balancing Act

By John McCarthy AO, Former Australian Diplomat

When the Prime Minister visits Hanoi this weekend, John McCarthy argues he will find a Vietnam focused on achieving a pragmatic balance in its foreign policy.

When Mr Albanese arrives in Vietnam, he will engage the most enigmatic national leadership – and certainly the most skilled in the art of political calibration – of the major countries in Asia. This visit counts.

Vietnam’s population is about 100 million. Its per capita GDP is greater than that of the Philippines and just below Indonesia’s. It is probably the fasted growing economy in the region. It is our tenth largest trading partner. There is potential for economic linkages in fields such as clean energy, agriculture, and the digital economy. We host some 30,000 Vietnamese students. The Vietnamese-born population is our sixth largest immigrant community.

This year we celebrate 50 years of diplomatic engagement with Vietnam. By the end of the year the relationship is likely to be upgraded from a “strategic” to a “comprehensive strategic” partnership, which places us amongst Vietnam’s longstanding partners including China and India. This may sound like diplomatic blarney, but it counts symbolically and will catalyse broader input to the relationship. We will be better placed to influence Vietnam.

Crucially, Vietnam occupies a unique strategic space in the Indo-Pacific. No country in Southeast Asia comes under more scrutiny from China and the United States than Vietnam- for signs of a tilt towards the other.

If Australia and like-minded countries are to derive the best return from their dealings with Vietnam, certain things need to figure prominently in our thinking.

First, Vietnam’s government is not communist lite. It is hard line. It is tough on those who disagree with it. This gives rise to difficult consular cases. Relations between many western countries and Vietnam are thus never entirely problem free. We and the Vietnamese should be ready for that.

While Vietnam’s ideological rigour is tempered by pragmatism, the former is currently the dominant trend.

Such was the tacit message when in January, the ideologically purist Vietnamese leader, Party General Secretary, Nguyen Phu Trong brought about the resignation, among others, of the President and former Prime Minister, Nguyen Xuan Phuc, and two Deputy Prime Ministers.

These figures were held to be vicariously responsible for the corruption of subordinates in scandals arising from the COVID pandemic.

However, the political cognoscenti noted that those whom Trong had purged were from that wing of the Communist Party most associated with government administration, the business community, and Vietnam’s engagement with the west. By contrast, those close to Trong tend to be party apparatchiks, many associated with the security establishment.

Partly because the sackings rattled business confidence, the party moved fast to settle things down. In early March, Vo Van Thuong, at 52 a relatively young member of the Politburo with strong party credentials, was elected president.

The smart money is now on the ageing Trong being replaced by the respected number 4 in the Politburo, Vuong Dinh Hue, who is broadly – but not uncompromisingly – in the Trong camp, with the youthful Thuong being the following cab off the rank.

This suggests that Vietnam’s broad sense of direction is unlikely to be challenged in the medium term and that we will need to deal with it much as it is.

The second thing is that given Trong has long had high level contacts with China and that those purged had had extensive dealings with the west, the question has arisen of whether Vietnam might be tilting away from the west and towards China.

Although as in any political system, there are differences of perspective in the leadership, talk of a stark division between a China faction and a pro-western faction is overblown.

Vietnam’s known animus towards China derives from centuries of conflict and runs deep. It fought a border war on 1979 and has competing territorial claims in the South China Sea. But as a smaller country on China’s periphery, it will not put its economy and security at risk. Moreover, the Chinese communist party remains a template for Vietnamese governance. Vietnam has guardedly made its peace with China.

However, Vietnam also sees the west, above all the United States, as the bulwark against Chinese domination and as central to its prosperity. And prosperity underwrites the long-term survival of Vietnam’s communist party.

In late March, an overdue call between President Biden and Trong took place. In April, Secretary of State Blinken paid a successful visit to Hanoi. Trong is expected to meet Biden this year. Vietnam’s relationship with the United States might be upgraded a bar from “comprehensive” to “strategic”.

Hence our third point. Vietnam’s international perspective is guided overwhelmingly by the importance of balance. Its adherence to balance is manifest not only in its dealings with China and the west, but in its neutral posture on the Russia-Ukraine war.

Australia and its friends should not expect Vietnam to change much internally. Nor, in a strategic context, will it tilt towards us. Absent serious Chinese aggression against it, it won’t.  Ultimately, Vietnam will decide its policies for itself based on the imperative of balance. We should, through engagement, assist it in meeting that objective.

John McCarthy is a Vice Chancellor’s Fellow at the University of Melbourne and senior advisor to Asialink. He was High Commissioner to India from 2004 to 2009 and ambassador to numerous other countries.