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Vietnam has elevated its relationship with the US to the highest possible level, bringing its former enemy closer to Washington despite Beijing’s growing assertiveness in the region.
The US signed a “comprehensive strategic partnership” with the Southeast Asian country on Sunday after President Joe Biden arrived in Hanoi from New Delhi, where he was attending the G20 summit.
The partnership’s symbolic but significant appointment, which follows years of lobbying by Washington, elevates the US to the top status in the hierarchy of Vietnam’s bilateral ties by two levels.
The status was previously reserved only for China, Russia, India and, since last year, South Korea. Vietnam had long avoided this step for fear of upsetting Beijing.
Nguyen Phu Trong, general secretary of the Communist Party of Vietnam, said the partnership with the US has grown by “leaps and bounds”. Biden described Vietnam as “a crucial power in the world and a benchmark in this vital region.”
The move is “beyond words,” said Jon Finer, the deputy U.S. national security adviser, who announced the strategic partnership as Biden flew to Hanoi. “In a system like Vietnam, this is a signal to their entire government, their entire bureaucracy, about the depth of cooperation and coordination with another country.”
Biden arrived in Vietnam after a G20 summit where the US and its Western allies compromised on their condemnation of Russia’s invasion of Ukraine in the bloc’s joint statement.
The US and its allies are trying to appeal to the South to build a global consensus against Russia.
The US also sees developing countries in Asia as crucial to countering China’s power in the Indo-Pacific. Vietnam is considered a frontline country facing China’s growing ambitions in the South China Sea, where Beijing has made sweeping claims of sovereignty, to the alarm of many of its neighbors.
Biden skipped the Association of Southeast Asian Nations and East Asia summits in Jakarta before the G20 meeting in favor of the trip to Vietnam, in a bid to show the importance America places on its relationship with Hanoi.
However, there were some signs of tensions between the two countries, with Biden raising human rights “as a priority” for the administration, while Trong warned against meddling in Vietnam’s internal affairs.
The strengthening of ties between the US and Vietnam comes nearly half a century after the end of the Vietnam War. After the Communist Party’s victory in 1975, Washington placed a trade embargo on Vietnam that remained in place until 1994.
The upgraded partnership is as much about Chinese missteps as it is about U.S. persistence, said Peter Mumford, a Southeast Asia analyst for the Eurasia Group.
“There is some strategic self-harm by China,” Mumford said, citing as an example an intensification of harassment of Vietnamese ships in the South China Sea. “This is an unusual and important step for Vietnam and it is a sign of how strong Hanoi’s desire is to offset ties with China.”
Beijing’s pressure campaign has already brought the Philippines closer to the US, with Manila giving America access to four more of the country’s military bases earlier this year.
Vietnam’s action is likely to spark unrest in Beijing. China had sent a top official to Hanoi at short notice earlier this week ahead of Biden’s planned visit. Chinese Communist Party international department head Liu Jianchao met with Trong and both agreed to “consolidate political mutual trust” during the visit.
“This is a decisive step for the US,” said Simon Tay, president of the Singapore Institute of International Affairs. Hanoi has indicated it will also strengthen ties with Australia, Singapore, Indonesia and Japan.
The new US status not only has security implications, such as potential defense cooperation, but is also of economic importance, especially in crucial industries such as semiconductor.
Since the 1990s, Vietnam’s economy has transitioned from a centralized, controlled economy to a more open model, and the US is its largest export market. Last year it was Asia’s fastest growing economy.
“The American business community is hopeful about continued improvement in tariffs and technology and intelligence transfers in particular,” said Greg Testerman, president of the American Chamber of Commerce in Vietnam.
Companies such as Dell, Google, Microsoft and Apple have expanded or set up shop in the Southeast Asian country to diversify their supply chains outside of China.
Major US technology and manufacturing companies, including semiconductor groups, are expected to attend a business meeting on Monday as Vietnam seeks more high-tech and other investment from the US.
Vietnam’s economic performance has been more subdued in recent months and exports have fallen due to a decline in global demand. An extensive anti-corruption campaign and a downturn in the real estate sector have also eroded investor confidence.