What Awaits Vietnam in 2015?

Vietnam’s diplomacy in 2014 was a complicated mess, primarily because of tensions with China in the South China Sea. Since the HD 981 incident last year, Vietnam has very clearly understood the importance of pursuing more diverse relationships with countries in the region and around the world, especially Japan, the Philippines, and the United States. With a powerful China claiming sovereignty over most of the South China Sea and a strong-willed United States fostering ambitions to pivot to Asia, 2015 opens with Vietnam facing both diplomatic opportunities and challenges.

Most likely, the United States will strengthen its partnership with Vietnam due to common interests and threats from China. Since the United States announced an easing of the lethal weapons embargo against Vietnam last October, Vietnam has successfully diversified its arsenal from a dependence on its longtime ally, Russia. Vietnam’s task in 2015 is to figure out what kind of weapons are suitable for the dispute and how to effectively integrate them with Russian arms. Using American weapons, Vietnam and the United States can easily conduct joint military exercises, helping the U.S. gain access to strategic naval bases and building trust between the two navies. Additionally, the election victory of Prime Minister Shinzo Abe in Japan and the renewal of the Enhanced Defense Cooperation Agreement between the United States and the Philippines have laid a strong foundation for further cooperation among Japan, the Philippines and Vietnam, while also facilitating the U.S. pivot to the region.

In 2015, Vietnam and the United States will enter the final phases of negotiation for the Trans-Pacific Partnership (TPP), an economic treaty that will boost Vietnamese economic growth and independence. Currently, the economy of Vietnam is heavily dependent on Chinese imports, with Vietnam’s annual trade deficit approaching $24 billion (worth 15 percent of Vietnam’s GDP) in 2013. This will likely be a weakness for the country when it comes to any negotiations with China in the future. For its part, the United States wants a stable, strong, and independent Vietnam with the ability to stand up to China and to secure peace and security in the region. The U.S. will assist Vietnam in TPP negotiations as long as Vietnam can satisfy American human rights requirements. Joining the TPP will help Vietnam escape China’s sphere of economic influence because the treaty requires the origin of products to come from a TPP country. Vietnam cannot solely depend on Chinese imports for its production, meaning the success of TPP negotiations will dictate Vietnam’s policy towards China.

As for the South China Sea dispute, China has changed its aggressive strategy towards Vietnam, which has been seeking closer ties with Japan, the Philippines, and the U.S. In the six months from June to December, China dispatched three senior envoys to Vietnam to discuss the dispute, and the tone became friendlier with each visit, especially in the last visit in December by Yu Zhengsheng, a member of the CCP Politburo Standing Committee and chairman of the National Committee of the Chinese People’s Political Consultative Council. Yu confirmed that China wanted to improve mutual understanding and bilateral relations with Vietnam. Still, China is hardly likely to abandon its expansionist ambitions, and will probably use this new approach as a way to stall for time until it becomes strong enough to resolve the South China Sea dispute on its own terms. Given the degree of unpredictability, Vietnam will have to develop a strategy with built in flexibility.

In 2015, the Permanent Court of Arbitration (PCA) at The Hague will make a decision on the Philippines’ case against China in the South China Sea disputes. Such a decision may have a strong impact on regional diplomacy. Recently, Vietnam submitted its statement to the PCA regarding the Philippines’ case, expressing support for the Philippines and requesting that the court protect its interests in the South China Sea. However, China has withheld all evidence for its sovereignty claim and insisted that the court does not have jurisdiction, leading to its refusal to recognize any PCA resolutions. If China continues building islands in the South China Sea in violation of international law, conflict with Vietnam or the Philippines could break out at any time. Vietnam must prepare for the worst case scenario.

The unique feature of Vietnam’s geopolitics does the nation both harm and good. Closer ties with Japan, the Philippines, and the United States are vital, and a degree of suspicion of China has proven necessary, although Vietnam has hardly dropped ties with China. Hanoi will need to continue its multi-vector diplomacy this year if it is to secure its sovereignty and preserve peace and security.