The United States expects to upgrade relations with Vietnam and risks angering China

HANOI, Sept. 4 (Reuters) – The United States expects to raise its diplomatic ties with former foe Vietnam to the next level as President Joe Biden travels to Hanoi within a week, a move that could anger China and have uncertain trade implications.

Fearing possible backlash from its much larger neighbour, Vietnam initially expressed caution about the upgrade. This has prompted the Biden administration to redouble efforts to persuade the Southeast Asian country, including through multiple visits by high-ranking members of the US government in recent months.

This unprecedented push prompted Washington to expect an upgrade to the top tier of Vietnam’s diplomatic rankings, along with China and Russia, from two notches below it now.

Biden said this publicly in July, and officials in both countries have since informally expressed optimism about the two-step upgrade, though no official statements have been issued by either government.

Perhaps in an effort to mollify Beijing, Vietnam is discussing high-profile visits to Hanoi after or even shortly before Biden’s September 10 arrival, where officials say Chinese President Xi Jinping and Prime Minister Li Qiang could meet with Vietnamese leaders in the coming days or weeks.

China’s foreign ministry did not immediately respond to a request for comment on Monday.

The risks that a double promotion with Washington might not sit well in Beijing remain high, Lu said, but Vietnam’s communist leaders may have calculated that the best timing for such a move is now, as US relations with China “are likely to worsen in the coming years.” the future”. Hong Hep is a senior fellow at the Isis-Yusuf Isaac Institute in Singapore.

“Vietnam’s economy badly needs to boost capital, technology and market access,” said Alexander Fufeng of the Hawaii-based Inoue Asia-Pacific Center for Security Studies, suggesting that may have been the main reason for the potential upgrade.

Heep said increasing US military supplies to Hanoi had been discussed for a long time but an immediate agreement was not expected because such talks take time.

Meanwhile, Vietnam is in talks with several other countries to modernize and expand its Russian-made arsenal, and has recently participated in multiple high-level defense meetings with top Russian officials.

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

Vo Tu Thanh, head of the Vietnam office of the US-ASEAN Business Council, said the US could do more.

Energy is another sector where cooperation could increase as Vietnam prepares to become a player in LNG and offshore wind power despite administrative and financing delays. dampening the mood.

It is expected that the upgrade of relations will enhance the plans of American companies in Vietnam. People familiar with the plans said aircraft maker Boeing and energy company AES.N may make announcements during Biden’s visit. The companies had no immediate comment.

The United States is already the largest market for Vietnam’s exports, and the US tariff measures could be eased to boost trade, said Thanh of the US-ASEAN Business Council.

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