Xi’s Charm Offensive Encounters Shifting Strategic Positions in Vietnam & Singapore

By Hunter Marston


A lion dancing with a dragon during Chinese New Year 2015 parade in Paris. Source: Wikimedia user Myrabella, used under a creative commons license.

Following his high-profile trips to the United States and the United Kingdom in September and October, Chinese president Xi Jinping traveled to Vietnam and Singapore from November 5 to 8, in the run up to the upcoming Asia-Pacific Economic Cooperation summit in the Philippines in mid-November. Xi’s visit to Southeast Asia, during what can be described as a difficult time in China’s relations with its neighbors, points to the rising strategic importance of Vietnam and Singapore, and suggests that Beijing will likely devote considerable energy to its renewed charm offensive to sustain good relations in a fast-changing and increasingly critical region.

In Vietnam, Xi struck a conciliatory tone when he urged Vietnam to work together with China to build mutual trust and deepen bilateral cooperation. He repeatedly emphasized that as a communist country, Vietnam is a “close comrade” of China, reflecting concerns in Beijing that Hanoi is gradually moving closer to the United States, Japan, and the west. Despite having a common political system and shared cultural ties, the two countries fought a vicious border war in 1979, and Vietnam has long distrusted its larger neighbor to the north.

Tensions between the two countries peaked last May when Beijing moved an oil rig into waters in the South China Sea claimed by Vietnam, sparking fierce anti-China protests across Vietnam. In recent years, Vietnam has actively diversified its foreign partners and shown innovative strategic thinking by making more explicit overtures toward the United States. Washington and Hanoi have established a comprehensive partnership, and steadily expanded defense cooperation, educational exchanges, and bilateral trade and investment ties.

Vietnam has also strengthened ties with Japan. In fact, on the same day that Xi arrived in Hanoi, Vietnamese leaders hosted Japanese defense minister Gen Nakatani, who met with Communist Party chief Nguyen Phu Trong as well as Defense Minister Phung Quang Thanh. According to media reports, Vietnam agreed during Nakatani’s visit to welcome a Japanese warship to visit the deep-sea port of Cam Ranh Bay next year, and the two navies are expected to hold their first ever joint exercise in the near future.

Vietnam has become the largest recipient of Japanese official development assistance (ODA) and a key regional partner in Japan’s quest to boost its security footprint in Southeast Asia. For this year, Japan has pledged $239 million in ODA, a $829 million package for infrastructure projects, and $1.6 million in maritime security assistance for Vietnam.

Despite Hanoi’s versatility in forging new strategic partnerships, China is still Vietnam’s largest trading partner, a point not lost on Vietnam’s leaders, many of whom remain wary of close relations with the United States and continue to urge restraint toward China. Yet Vietnam’s commitment to stick with the often difficult negotiations on the Trans-Pacific Partnership (TPP) trade agreement until its conclusion in October was another example of Hanoi’s desire to reduce its economic reliance on China and deepen Vietnam’s partnership with the United States.

Hanoi’s strategic posture of increasing defense ties with Japan, the United States, India, and the Philippines, will only accelerate, regardless of whether or not Beijing wants to mend ties over the South China Sea dispute. Xi will likely find that it requires much more effort to win over Vietnam’s leadership in years to come.

Following his trip to Vietnam, Xi traveled to Singapore, where he met with Taiwan’s president, Ma Ying-Jeou, in the first face-to-face encounter between leaders of the two sides since 1945. Singapore proved itself a deft interlocutor between the two parties, and earned considerable diplomatic cachet in its successful execution of the high-stakes meeting.

The Chinese president also met with Prime Minister Lee Hsien Loong to discuss bilateral trade and investment relations, as well as the renegotiation of the two countries’ free trade agreement, now seven years old. Xi and Lee agreed to work to reduce investment barriers, and explore increased cooperation on financial services and capital markets. China is the largest recipient of Singapore’s foreign direct investment (FDI), while Singapore is the second largest source of FDI to China following Hong Kong. Total trade between the two in 2014 amounted to $85 billion.

But like Vietnam, Singapore has been a versatile strategic player and has branched out diplomatically, seeking closer strategic partnerships with the United States and Australia in order to maintain the balance of power in the region amid China’s increasing assertiveness. Singapore is often known as the strongest and closest U.S. partner in the region, a trend that is expected to continue into the future. The United States is Singapore’s largest foreign investor, with an accumulated total of $154 billion in FDI in 2013. Meanwhile, Singapore’s Changi naval base overlooking the Malacca Strait serves as a logistics hub for the U.S. military.

Like Vietnam, Singapore also wants greater engagement with the United States. During his visit to Washington in June, then foreign minister K Shanmugam publicly urged the U.S. Congress to grant President Barack Obama Trade Promotion Authority to demonstrate U.S. resolve on concluding the TPP negotiations, and underscored the importance of U.S. economic leadership in Asia. Bilateral U.S.-Singapore trade has grown by 53 percent since the two countries signed an FTA in 2004, and reached $50 billion in 2013. The recent conclusion of the TPP is projected to further boost trade and investment between the United States and Singapore.

Xi’s recent visit to Southeast Asia shows that even as Beijing constantly seeks to remind its neighbors of the need to have good relations with China—or in some cases, the economic benefits that could flow from China’s largesse—countries such as Vietnam and Singapore will continue to pursue their own strategic approaches. They recognize that in the long run, continuing U.S. leadership in the Asia Pacific is still the best scenario for regional peace and stability.

Mr. Hunter Marston is a researcher with the Chair for Southeast Asia Studies at CSIS.


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