Thayer Does Vietnam Pursue A Balancing or Hedging Policy Towards China and The US

Thayer Consultancy Background Brief:
ABN # 65 648 097 123

Does Vietnam Pursue a
Balancing or Hedging Policy
Towards China and the US?
September 26, 2023
We are preparing a report on Vietnam’s balancing and hedging strategy.

Shortly after Vietnam and the United States elevated their relations to a
Comprehensive Strategic Partnership, Prime Minister Pham Minh Chinh visited China
and attended the China-ASEAN Expo. Last week, PM Chinh visited the U.S. where he
met U.S. Trade Representative Katherine Tai.
We request your assessment of the following issues:
Q1. While Vietnam is adopting a fairly high-profile hedging strategy between the U.S.
and China, would it be fair to say that Vietnam has emerged as the biggest winner as
U.S.-China rivalry intensifies? What should Vietnam watch out for? Also, what should
investors look out for?
ANSWER: Vietnam conducts meticulous planning for its relations with the great
powers. Recent events should not be viewed as opportunistic.
In March, President Biden and General Secretary Nguyen Phu Trong spoke by
telephone and agreed to raise relations and exchange reciprocal visits. Vietnam’s
planning took into account the diplomatic calendar for 2023 with the ASEAN and
related summits, including the East Asian Summit, taking place earlier than usual,
followed by the Group of 20 Summit in India, the annual UN General Assembly
meeting in New York, and finally the APEC Summit in San Francisco.
When President Biden visited Hanoi and met General Secretary Trong, Trong noted at
a press conference that his trip to the United States failed to take place. This suggests
that scheduling was a problem, especially when it became clear Biden (and Xi Jinping)
would not attend the ASEAN and related summits.
Vietnam’s initiative to hold a sideline meeting with Biden at the G20 Summit was
overtaken by the decision to host Biden in Hanoi and formally declare a
Comprehensive Strategic Partnership.
Vietnam knew full well that Prime Minister Pham Minh Chinh would visit China shortly
after to attend the China-ASEAN Expo in Nanning and then proceed to the UN General
Assembly in New York City and APEC leaders’ meeting in San Francisco.
2
Vietnam is the biggest winner because its primary driver has been to secure increased
economic cooperation (trade, investment, technology transfer) from the U.S. and use
this as leverage in securing more cooperation from China.
In early 2021, the Thirteenth National Congress of the Vietnam Communist Party set
the goal of Vietnam becoming a modern industrial country with a high income by
2045. Vietnam aims to acquire and develop Fourth Industrial Revolution technology
with a priority on semiconductors, Electric Vehicle production, and green energy
transition.
Vietnam’s ambitious plans open up opportunities not only for trade and investment
but human resource training and development. In other words, if Vietnam is to have
its cake and eat it too, both the U.S. and China will find it in their interests to step up
economic engagement with Vietnam.
Q2. From the Chinese perspective, it appears acceptable so long as Vietnam does not
take steps that appear to threaten China strategically. But will plans by the U.S. to sell
Vietnam F-16s and similar moves undermine ties between China and Vietnam?
ANSWER: Recent reports that the United States and Vietnam are discussing – not
planning – the possible acquisition of F-16s needs to be put in perspective. This is not
a new development [see: Stephen Burgess, “The US–Vietnam Comprehensive
Partnership and the Key Role of Air Force Relations,” Journal of Indo-Pacific Affairs,
December 2021].
In 2018, Vietnam and the U.S. began discussing the sale of T-6 jet trainers to Vietnam’s
Air Defence-Air Force. In 2019, Vietnam initially decided to purchase three T-6s and a
maintenance package at a cost of $25 million with delivery in 2023.
In 2021, Vietnam ordered twelve T-6 trainer aircraft along with a sustainment and
maintenance package at a cost of at least $225 million over ten years. Delivery is
expected in 2024-27.
The United States Air Force (USAF) would like the T-6 program to be a stepping-stone
for Vietnam’s acquisition of USAF F-15E Strike Eagle fighters in the late 2020s. An
alternative would be Israel selling F-16s to Vietnam in the 2030s as the T-6 program
develops.
According to Stephen Burgess, “US Embassy officials in Hanoi believed that the T-6
sale represented a strategic shift from Russia to the United States ‘under the nose’ of
China and would be a major part of helping Vietnam move away from dependence on
Russian weapons and corruption, as well as China’s influence.”
Q3. How strong are party-to-party ties between China and Vietnam?
ANSWER: Party-to-party ties between China and Vietnam are a special conduit in
bilateral relations because both are one-party states. There are extensive ties at all
levels the most important of which are between party General Secretaries and the
Chinese Communist Party (CCP) International Liaison Department and the Vietnam
Communist Party (VCP) External Relations Commission.
The CCP and the VCP hold annual theoretical seminars. The two militaries, the
People’s Liberation Army and the Vietnam People’s Army, exchange visits by junior
3
political officers and hold an annual friendly border exchange that includes a meeting
of defence ministers.
Mutual decisions reached by party General Secretaries trump the state bureaucracy.
Such high-level leaders’ meetings, for example, resulted in the swift demarcation of
the land border and delineation of the Gulf of Tonkin (Gulf of Beibu).
In 2014, the prolonged crisis involving the deployment of the Hai Yang Shi You 981 in
Vietnam’s Exclusive Economic Zone was resolved when Vietnam dispatched a special
envoy of the VCP General Secretary to Beijing.
Q4. Will further attempts by Chinese companies to set up operations in Vietnam
influence Hanoi to “hedge” more towards China?
ANSWER: Vietnam’s recent upgrading of relations with the United States is not only a
product of Vietnam’s pursuit of “diversification and multilateralization” of its external
relations but a refinement of its 2003 policy of “cooperation and struggle.” This policy
was reviewed in 2013. In recent years there has been a quiet internal review of this
policy to clarify how it could be better applied practically. The initial “cooperation and
struggle” policy tended to privilege relations with “socialist China” and put constraints
on relations with the United States.
The purpose of Vietnam’s “cooperation and struggle” policy is to engage with China
and the United States to reinforce Vietnam’s independence of action and strategic
autonomy in Vietnam’s national interest. This depreciates the role of ideology.
Increased cooperation with China, such as the relocation of production processes by
Chinese companies to Vietnam, is designed to meet mutual interests. In sum, Vietnam
is not explicitly pursuing a policy of hedging so much as consistent engagement with
both China and the United States.
Q5. What is your assessment of reports that the U.S. and Vietnam are discussing the
sale of F-16s?
ANSWER: In 2018, Vietnam and the U.S. began discussing the sale of T-6 jet trainers
to Vietnam’s Air Defence-Air Force.1 In 2019, Vietnam initially decided to purchase
three T-6s and a maintenance package at a cost of $25 million with delivery in 2023.
Vietnam’s decision led to two import outcomes. First, U.S. defence officials conducted
site visits to Vietnam to assess their suitability. Second, in order to train pilots and
maintenance crews, the U.S. and Vietnam agreed to a three-year aviation leadership
and English proficiency program involving up to three trainee pilots at a time. Vietnam
needs to train twenty candidates to produce fourteen pilots to fly three T-6 trainers.
The U.S. is also providing additional training in aviation culture and safety, air
competence, risk management, maintenance and partnership management.
In 2021, Vietnam ordered twelve T-6 trainer aircraft along with a sustainment and
maintenance package at a cost of at least $225 million over ten years. Delivery is
expected in 2024-27. Vietnam would need to train fifty candidates to produce thirty
pilots to fly the twelve T-6s.
1
This borrows from https://www.airuniversity.af.edu/JIPA/Display/Article/2870567/the-
usvietnam-comprehensive-partnership-and-the-key-role-of-air-force-relations/.
4
The U.S. Air Force will train Vietnamese pilots using contractors and T-6 simulators.
The Oregon Air National Guard will provide subject matter experts to upgrade
Vietnamese fighter pilot capabilities to fly at night and in rough weather.
Eventually, Vietnamese pilots would be invited to participate in Red Flag a two-week
advanced aerial combat training exercise held several times a year by the United
States Air Force. This would provide training and experience in Humanitarian
Assistance/Disaster Relief, Search and Rescue and Command and Control missions.
Suggested citation: Carlyle A. Thayer, “Does Vietnam Pursue a Balancing or Hedging

Policy Towards China and the US?,” Thayer Consultancy Background Brief, September
26, 2023. All background briefs are posted on Scribd.com (search for Thayer.. To
remove yourself from the mailing list type, UNSUBSCRIBE in the Subject heading and
hit the Reply key.
Thayer Consultancy provides political analysis of current regional security issues and
other research support to selected clients. Thayer Consultancy was officially
registered as a small business in Australia in 2002.

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Thayer Consultancy Background Brief:

ABN # 65 648 097 123

We are preparing a report on Vietnam’s balancing and hedging strategy.

Suggested citation: Carlyle A. Thayer, “Does Vietnam Pursue a Balancing or Hedging

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