Will Vietnam Get Caught in the Crosshairs of Great-Power Politics Again?

In the second half of 2023, Vietnam—usually a blip on the radar of great-power politics—made international headlines for hosting the world’s two most powerful leaders in the span of a few months. In September, a visit from U.S. President Joe Biden culminated in a historic deal that lifted the United States to Vietnam’s highest diplomatic status of a comprehensive strategic partnership—a designation previously reserved for only China, India, Russia, and South Korea.

Three months later, Chinese President Xi Jinping met with Vietnamese Communist Party chief Nguyen Phu Trong in Hanoi. The pair pledged to build a “shared future” and bolster strategic ties by collaborating on issues such as maritime patrols, trade, and crime prevention.

Between these high-profile visits, Vietnam inked another comprehensive strategic partnership that flew under the radar. This one was with Japan, and though it received less international attention, it’s likely the most important of the three for understanding the future of Vietnam’s foreign policy. Japan has become a critical partner as Vietnam tries to chart its own path by diversifying its economic dependencies and cultivating ties with a wide range of international actors—all while not getting caught in the crossfire of great-power politics.

A cardinal rule of Hanoi’s foreign-policy playbook is not antagonizing Beijing. As Vietnam’s top trading partner, China has historically been both a benefactor and a challenge for Vietnam. During periods of resistance against French and U.S. troops from the 1940s to the 1970s, Beijing provided crucial support to Hanoi in the form of money, weapons, and advisors.

But a turbulent period kicked off in 1979, when China invaded to “teach Vietnam a lesson” for ousting the genocidal China-backed Khmer Rouge regime in Cambodia. The brief but bloody border war upended Sino-Vietnamese ties and left a legacy of strong anti-China sentiment among the Vietnamese public—one that’s exacerbated by ongoing territorial disputes between the two countries in the South China Sea.

Despite this fraught history, China’s economic largesse boosts Vietnam’s economy and has left Hanoi tiptoeing around Beijing. Vietnam has now been in a precarious dance with China for decades as it both cooperates with Beijing and seeks to defend its interests.

Hanoi’s fear of angering China was evident in its initial hesitation to upgrade ties with Washington. When U.S. Secretary of State Antony Blinken visited Hanoi in April ahead of Biden’s trip, Vietnamese authorities kept the domestic media on a tight leash to avoid ruffling Beijing’s feathers amid worsening U.S.-China tensions.

For instance, an article about Blinken’s meeting with Vietnamese Prime Minister Pham Minh Chinh published in Tuoi Tre, an influential Vietnamese newspaper, was heavily censored shortly after its release. Its headline, which quoted Blinken—“The sun has been shining on the U.S.-Vietnam relationship”—might have sparked concerns among Vietnamese censors. Coverage of Biden’s visit remained similarly cautious. Xi, by contrast, was greeted with fanfare in the press during his December visit.

Although Beijing did not directly criticize upgraded U.S.-Vietnam ties, China’s foreign ministry spokesperson, Mao Ning, hinted that the partnership might reflect a “Cold War mentality” and urged Washington to respect Asian countries’ aspirations for stability and development.

Vietnam’s decision to engage closely with Tokyo did not set off the same alarm bells. Japan, unlike the United States, does not pursue aggressive containment strategies against China. Although Japan’s relationship with China has been historically strained and is currently marked by territorial disputes, the pair have recently made efforts to improve ties, avoid conflict, and maintain regional stability.

Japan also offers a solution to Vietnam’s infrastructure conundrum. Currently, Vietnam depends on Chinese investment for essential infrastructure projects. Vietnamese authorities and the public have expressed concern over Chinese contractors due to their track record of delays, cost overruns, and poor construction.

Take Hanoi’s Cat Linh-Ha Dong metro line, which was funded by Chinese loans and built by a Chinese contractor. Initially scheduled for completion in 2013, the line faced significant delays and cost escalations as well as construction-related accidents and safety concerns; it did not become operable until 2021.

In addition, in a country where anti-China sentiment runs deep, Hanoi fears public resentment if it were to accept more money for infrastructure projects under China’s Belt and Road Initiative (BRI)—a project that Vietnam has engaged with cautiously. Despite showing some diplomatic support for the BRI, Vietnam remains wary of overdependence on Chinese investment, partly due to fears of a potential so-called debt trap and the strategic implications of close ties with Beijing.

Japan’s investments are poised to enable Vietnam to gradually decrease its dependence on China. Japan is one of Vietnam’s major trading partners and a major source of foreign investment. Even before the upgraded partnership, Japan was instrumental in funding and supporting key infrastructure projects, such as the modernization of urban railways, the construction of expressways, and the development of deep-sea ports.

But as part of the upgraded strategic partnership, Japan has pledged to boost economic and security cooperation with Vietnam even more, with a significant focus on investing in high-quality infrastructure projects, which are essential to Vietnam’s economic growth and integration in regional connectivity frameworks.

Washington also pledged to invest in Vietnam’s development as part of its upgraded partnership. But U.S. investment in Vietnam—while considerable—does not tend to directly address Vietnam’s pressing need for physical infrastructure. Instead, the United States usually funds long-term development in sectors such as agriculture, human rights, climate change, and health.

It’s possible that U.S. support could eventually have a significant impact on Vietnam’s economy; during Biden’s visit, Washington announced a partnership with Hanoi to explore opportunities to grow the global semiconductor ecosystem by supporting Vietnam as it seeks to develop its own semiconductor industry​​. Yet there is limited U.S. public funding available for this through the CHIPS and Science Act, and recently, U.S. chipmaker Intel called off a significant investment in Vietnam. Although Intel did not provide a reason, a source told Reuters that the company was concerned about bureaucracy and power supplies.

No matter how the United States tries to frame the narrative, its strategic pivot toward Vietnam is part of its efforts to counter China’s influence in the region. Vietnam, for its part, is committed to its sovereignty and wants to avoid getting entangled in great-power politics. Hanoi has thus relied on a careful diplomatic balancing act to preserve stability, avoid showing favoritism, and capitalize on opportunities presented by the region’s shifting power dynamics.

At the end of the day, it is not the upgraded ties with global juggernauts, but rather the quieter partnership with Japan that may point to Vietnam’s future. This is not to say that Vietnam does not value overtures from Washington and Beijing. But above all, Vietnam prizes the steady rhythm of development, stability, and self-determination over power plays. Its relationship with Japan is part of its overarching strategy to achieve this by elevating ties with key regional players. (Vietnam is expected to form a comprehensive strategic partnership with Australia this year and is considering similar partnerships with Singapore, Australia, and Indonesia.)

Although Hanoi’s foreign policy has long been flexible and pragmatic, its diplomatic strategy—now called “bamboo diplomacy”—has evolved in recent years to prioritize making “more friends, fewer foes,” in Trong’s words. This is not merely a reaction to great-power competition. Instead, it’s part of the country’s calculated effort to navigate an increasingly multipolar world—one where diverse global actors, rather than superpowers alone, shape the geopolitical narrative.