By Khanh Vu and Phuong Nguyen
HANOI (Reuters) – Vietnam’s ruling Communist Party is meeting next week for a congress that will help shape the country’s world role for the next five years, by electing new leaders and formulating policies as tensions bubble with Beijing and Joe Biden will settle in the White House.
The 13th Congress of the Communist Party, from January 25 to February 2, will promote leadership that seeks to harness the economic success of Vietnam to strengthen legitimacy. The key to this will be the challenge of balancing the relationship between China and the United States, for which Vietnam has become a major strategic partner, in a world economy removed from previous certainties.
Driven by the diversion of world trade in its favor as a result of an American and China series, Vietnam is constantly growing into one of the most important technological manufacturing hubs in the world, as well as a center for clothing manufacturing, in an economy that is on the right path is to recover faster than most after the coronavirus pandemic.
“Strategic competition between the US and China will continue to destabilize the regional geo-strategic and economic environment over the next five years,” said Le Hong Hiep, of the ISEAS – Yusof Ishak Institute in Singapore.
“This is a big challenge for Vietnam, as the Vietnamese economy is very open and very dependent on international trade and foreign investment,” he added.
Annual growth in Vietnam’s annual gross domestic product (GDP) has averaged 6.0% over the past five years and continued to expand by 2.9% in 2020 despite the pandemic that crushed economies elsewhere: Vietnam has so far managed to contain the coronavirus with strict quarantine, testing and detection measures.
With just over 1,500 infections and a total of 35 deaths, Vietnam – one of the last five communist countries in the world besides China, Cuba, Laos and North Korea – has seen its economy surpass a large part of Asia in recent years. . see all average GDP growth of 7.0% over the next five years.
“Vietnam’s leaders will have to learn how to minimize negative effects and seize opportunities, especially China’s trade and investment diversion,” Hiep said.
US trade tensions
The main candidates for the new positions to be determined at the congress are all widely known in Hanoi’s political circles, but have been officially considered secret to discourage potential critical debates. The Communist Party retains strict control over the media and tolerates little criticism.
Vietnam officially has four ‘pillars’ of leadership: the Party leader; the state president; the Prime Minister and the Chairman of the National Assembly.
While a power struggle in 2016 and the subsequent suppression of corruption in government have deepened faction fault lines in party ranks, most analysts expect continuity in Vietnam’s economic, domestic and foreign policy-making after Congress.
Bitter enemies during the US-Vietnam War, Hanoi and Washington, have had significantly warmer relations over the past few years, but there have been late tensions in the trade.
While the shift in global supply chains caused by former US President Donald Trump’s trade war with China has benefited Vietnamese exporters, the incoming party leadership has to contend with likely increased scrutiny from the United States – and new leadership in the White House. have.
Its trade deficit with Vietnam increased significantly and rapidly, and the United States under the Trump administration described Vietnam last year as a currency manipulator, raising the outlook for U.S. tariffs on Vietnamese goods. The trade gap increased to $ 63 billion in 2020 from $ 47 billion in 2019.
The U.S. Trade Representative said earlier this month that Vietnam’s actions to downgrade its currency were “unreasonable” and restricted U.S. trade, but did not immediately act to impose penalties – the decision was in the hands of the government of Biden.
“Vietnam will need to maintain a dialogue with the US to better understand the Biden government, and to sincerely review its trade and monetary policies and practices,” said Ha Hoang Hop, also of the ISEAS – Yusof Ishak Institute.
TRY WATERS
Locally, Vietnamese leaders will also have to contend with one of the fastest aging societies in Asia and the reform of an outdated higher education system that is lacking local high-skilled labor.
According to observers, the other major external challenge is finding ways to deal with China’s growing aggression in claiming large, potentially energetic parts of the South China Sea that overlap with Vietnam’s exclusive economic zone.
“The outlook for the security of the South China Sea will be quite pessimistic this year,” Ha Hoang Hop said. “Vietnam will need to be more vigilant and prepare to respond to foreign enemy forces.”
However, according to co-observer Hiep, Vietnamese leaders are also well aware of the importance of China for the security and economic well-being of Vietnam, which Vietnam had to “try to maintain its balance between the two major powers”.
Although Vietnam and China have been embroiled in a dispute over the South China Sea for years, China remains the largest source of materials and equipment for the booming manufacturing industry in Vietnam.
Hop said other challenges for the next five-year leadership corps include reforms needed to implement international free trade agreements with new inks and a more comprehensive and proactive foreign policy.
Strengthening Vietnam’s national defense is also on the agenda, as well as tackling the development of the Mekong River – another strained battlefield with Beijing – and the vaccination of COVID-19 by vaccinating the population.
(Reporting by Khanh Vu and Phuong Nguyen; Written by James Pearson; Edited by Kenneth Maxwell)