US expects to upgrade Vietnam ties, risking China anger

HANOI - The United States expects to elevate its diplomatic relations with former foe Vietnam to the top level as President Joe Biden travels to Hanoi in a week, a move that may irk China.

Fearful of the potential reaction from its much larger neighbour, Vietnam had initially expressed caution about the upgrade.

That led the Biden administration to multiply efforts to persuade the South-east Asian nation, including through multiple visits by high-ranking members of the US government in recent months.

The unprecedented push has led Washington to expect to be elevated to the top tier of Vietnam’s diplomatic ranking, together with China and Russia, from two notches below.

Mr Biden spoke publicly about it in July, and officials in both countries have since informally expressed optimism about the two-step upgrade, although no official statements have been released from either government.

Perhaps seeking to assuage Beijing, Vietnam is discussing top-level visits to Hanoi after or even shortly before Mr Biden’s arrival on Sunday, with officials saying China’s President Xi Jinping or Premier Li Qiang could meet Vietnamese leaders in the coming days or weeks.

China’s Foreign Ministry did not immediately respond to a request for comment on Monday.

Risks that a double upgrade with Washington may not go down well in Beijing remain high, but Vietnam’s communist leaders may have calculated that the best timing for the move is now, as US relations with China are “likely to get worse in the future”, said Dr Le Hong Hiep, a senior fellow at Singapore’s ISEAS – Yusof Ishak Institute.

“Vietnam’s economy badly needs a boost in capital, technology and market access,” said Dr Alexander Vuving of the Hawaii-based Inouye Asia-Pacific Centre for Security Studies, noting that that may have been a key reason for the possible upgrade.

A boost in US military supplies to Hanoi has also long been discussed, but no immediate deal is expected as these talks take time, Dr Hiep said.

Meanwhile, Vietnam is talking to several other countries to upgrade and expand its mostly Russian-made arsenal, and has recently engaged in multiple high-level defence meetings with top Russian officials.

Supporting Vietnam’s ambitions to become a hub for the semiconductor industry is also part of Washington’s inducements, but public funds so far available under the Chips Act are very limited.

The US may offer more, said Mr Vu Tu Thanh, head of the Vietnam office of the US-Asean Business Council.

Energy is another sector where cooperation could increase as Vietnam prepares to become a player in liquefied natural gas and offshore wind, although administrative and funding delays are dampening the mood.

The upgrade of relations is expected to boost US firms’ plans in Vietnam. Planemaker Boeing and energy firm AES may make announcements during Mr Biden’s visit, people familiar with the plans said.

Boeing hopes to sell as many as 50 of its 737 Max jets during the visit, they said. The companies declined to comment.

The US is already Vietnam’s largest market for its exports, and US Customs procedures could be eased to boost trade, said the US-Asean Business Council’s Mr Thanh. REUTERS