US Set to Elevate Diplomatic Ties with Vietnam, Risking China’s Displeasure


In a significant diplomatic move, the United States is poised to enhance its relations with Vietnam to the highest diplomatic echelon, a development expected to unfold as President Joe Biden embarks on a visit to Hanoi in just one week. This strategic shift carries the potential to raise eyebrows in Beijing and has uncertain ramifications for business interests.

The Diplomatic Balancing Act

Vietnam, mindful of the potential repercussions from its formidable neighbor to the north, initially exercised caution regarding this diplomatic upgrade. Consequently, the Biden administration launched an extensive campaign, marked by multiple visits from high-ranking U.S. officials over recent months, to persuade this Southeast Asian nation to consider the elevation.

The concerted efforts from Washington have led to an anticipation of Vietnam ascending to the top tier of diplomatic relations, alongside China and Russia, thereby advancing two notches from its current standing.

While President Biden publicly articulated this intention in July, both nations have since informally expressed optimism about the forthcoming two-step upgrade, although no official statements have been released by either government.

China’s Response and Vietnam’s Calculations

In a bid to allay concerns in Beijing, Vietnam is actively exploring the possibility of high-level visits to Hanoi, potentially either just before or after President Biden’s scheduled arrival on September 10. Officials have hinted at the prospect of meetings between Chinese President Xi Jinping, Prime Minister Li Qiang, and Vietnamese leaders in the days or weeks ahead.

The risks associated with a dual elevation involving Washington and Hanoi are not to be underestimated, but Vietnam’s leadership, keenly aware of its fraying relations with China, appears to have timed this maneuver strategically. According to Le Hong Hiep, a senior fellow at Singapore’s Iseas–Yusof Ishak Institute, “relations with China are likely to get worse in the future.”

However, in the short term, the concrete gains for Vietnam remain elusive, especially in light of its territorial disputes with China in the South China Sea. While discussions about an increase in U.S. military supplies to Hanoi have been ongoing, no immediate deal is anticipated due to the intricacies involved.

Broader Collaborative Horizons

Simultaneously, Vietnam is engaging with several other nations to enhance and diversify its predominantly Russian-made arsenal. The country has recently conducted high-level defense meetings with senior Russian officials.

Supporting Vietnam’s aspiration to establish itself as a hub for the semiconductor industry forms a part of Washington’s enticements. Nonetheless, the available public funds under the CHIPS Act remain limited, though the U.S. may consider offering more, according to Vu Tu Thanh, the head of the Vietnam office of the US-ASEAN Business Council.

Another potential area of increased cooperation lies in the energy sector, with Vietnam gearing up to play a significant role in Liquefied Natural Gas (LNG) and offshore wind projects. Nevertheless, administrative hurdles and funding delays currently cast a shadow over these ambitions.

Implications for Business Interests

The elevation of diplomatic ties between the United States and Vietnam is expected to bolster the plans of U.S. corporations in Vietnam. Notably, aviation giant Boeing and energy company AES may make significant announcements during President Biden’s visit, though both companies have refrained from immediate comments.

Furthermore, the United States is already Vietnam’s largest export market, and the streamlining of U.S. customs procedures could potentially stimulate trade, as suggested by Thanh from the US-ASEAN Business Council.

In conclusion, the upcoming diplomatic upgrade between the U.S. and Vietnam carries geopolitical significance and has the potential to reshape economic and strategic dynamics in the region. As President Biden’s visit approaches, the international community will closely monitor the developments and their implications for the Asia-Pacific region.

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