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A balancing act for Vietnam

Updated On: Jun 23, 2006

As Vietnam speeds up its development setting the vision of becoming an industrial nation by 2020, it is also attracting attention from the two major powers – China and the United States.

Trade between Vietnam and China has increased almost 40 per cent from last year reaching US$10 billion while trade between US and Vietnam rose to nearly US$8 billion from less than US$ 1 billion in 2001.

Although US has paved the way for Vietnam’s WTO accession expected at the end of the year, analysts say that both Vietnam’s prime minister and president favor the Chinese model in its economic reform which allows “economic transition with firm Communist Party political control”.

While Vietnam may look at China (an ideological ally) as a model for its economic development, it is also wary about Chinese expanding sphere of influence.  This has prompted a closer engagement between Hanoi and Washington.  While Vietnamese leaders want the US on their side for equilibrium, the Bush administrative is also happy to provide a counterbalance in the region. In expressing their commitment to Vietnam, President Bush will be attending the Asia-Pacific Economic Cooperation Summit in Vietnam later this year.

Despite some uneasiness in Washington over human rights in Vietnam, US Secretary of Defence, Mr. Rumsfeld had announced significant steps to deepen military cooperation with Vietnam and expressed optimism that the “economic progress that Vietnam has made in a short time and the relationship between the US and Vietnam is progressing”.

US had lifted its economic sanctions against Vietnam since 1994 and full diplomatic relation between the two countries was established the following year. Since the lifting of sanctions, observers have agreed the economic achievements that Vietnam has made over the past 20 years were remarkable despite the experience of two resistance wars.

Continuing on a trajectory of reforms and if it played its politics well, Vietnam’s goal to become an industrial nation may be indeed be helped by the fact that it can leverage on the competition between China and US for its allegiance. 

Sources:

US, China vying for influence in Vietnam (Straits Times, 20 June 2006)

Vietnam aims to become industrial nation by 2020 (Straits Times, 21 June 2006)

Vietnam- an appealing destination for Japanese investors (Nhan Dan, 21 June 2006)







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