Vietnam in the Indo-Pacific: Challenges and opportunities in a new regional landscape Authors: Andrew Chubb (Princeton), Ngan Collins (RMIT), Thuy T. Do (ANU), Peter Edwards (AIIA), Le Hong Hiep (ISEAS), Le Thu Huong (ANU) and Carlyle Thayer (UNSW ADFA) rd M265, 3 Floor, Old Economics Building, Editor: Jeffrey Wilson, Head of Research, Perth USAsia Centre The University of Western Australia, 35 Stirling Highway, Crawley WA 6009, Australia [email protected] @PerthUSAsia PerthUSAsia linkedin.com/company/perth-usasia-centre © 2017 Perth USAsia Centre // All Rights Reserved perthusasia.edu.au 2 Vietnam in the Indo-Pacific ACKNOWLEDGEMENTS Professor L. Gordon Flake would like to express sincere thanks to the contributors of the publication, namely: Dr Andrew Chubb (Princeton-Harvard China and the World Program) E/Professor Carlyle Thayer (UNSW Canberra) Dr Huong Le Thu (Australian Strategic Policy Institute) Mr Le Hong Hiep (ISEAS – Yusof Ishak Institute) Dr Ngan Collins (RMIT University) Dr Peter Edwards AM Dr Thuy T. Do (Diplomatic Academy of Vietnam) Professor Stephen Smith (Perth USAsia Centre); Professional services were supplied to the project by Davina Designs (Perth) and UWA UniPrint. This report may be cited as: Jeffrey Wilson (ed.) (2018). Vietnam in the Indo-Pacific: Challenges and opportunities in a new regional landscape. Perth: Perth USAsia Centre at The University of Western Australia. Important Disclaimer Conclusions are derived independently and authors represent their own view rather than an institutional one. This publication is designed to provide accurate and authoritative information in relation to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering any form of professional or other advice or services. No person should rely on the contents of this publication without first obtaining advice from a qualified professional person. © The Perth USAsia Centre 2018 This publication is subject to copyright. Except as permitted under the Copyright Act 1968, no part of it may in any for or by any means (electronic, mechanical, microcopying, photocopying, recording or otherwise) be reproduced, stored in a retrieval system or transmitted without prior written permission. Enquiries should be addressed to the publishers. Notwithstanding the above, Educational Institutions (including Schools, Independent Colleges, Universities, and TAFEs) are granted permission to make copies of copyrighted works strictly for educational purposes without explicit permission from The Perth USAsia Centre and free of charge. Perth USAsia Centre M625, 3rd Floor, Old Economics Building The University of Western Australia 35 Stirling Highway, Crawley WA 6009 Australia Vietnam in the Indo-Pacific 3 CONTENTS 2 Acknowledgements 4 Foreword by Stephen Smith 6 Introduction 7 Key questions 9 Contributors Chapter I. Peter Edwards (AIIA) From enmity to strategic partnership: 10 Australia-Vietnam relations since 1976 Chapter II. Ngan Collins (RMIT) Vietnam’s State-Owned 20 Enterprises Reform Chapter III. Le Hong Hiep (ISEAS) Vietnam’s rise under Doi Moi and 30 its regional implications Chapter IV. Le Thu Huong (ANU) Vietnam and the New US: Developing 42 ‘Like-minded’ partners Chapter V. Carlyle Thayer (UNSW ADFA) United States-Vietnam Relations: Strategic 56 convergence but not strategic congruence Appendix. 71 Timeline of Vietnam-China’s relations (1950-2017) Chapter VI. Thuy T. Do (ANU) Understanding Vietnam’s China Policy: 74 A historical and geopolitical perspective Chapter VII. Andrew Chubb (Princeton) Vietnam-China Relations in 92 Xi Jinping’s ‘New Era’ 104 Endnotes 4 Vietnam in the Indo-Pacific FOREWORD For Australians of my generation, the mention of Vietnam almost always conjures up images of the War and the 1970s. This comes as no surprise, given it was the time of our youth and University education. Attitudes to Vietnam in those days shaped attitudes to foreign policy and domestic politics. In the immediate post-war aftermath, the influx of Vietnamese refugees into Australia and Australia’s development assistance and reconciliation efforts in Vietnam itself, are the stand out memories. Indeed, one word - bridge – stands as the visual image to those assistance efforts. Successive Australian Governments since the early 1970’s, starting with diplomatic recognition of Vietnam in 1973 by the Whitlam Government, have sought to enhance our bilateral relations with Vietnam. While such efforts became easier with the effluxion of post-war time, it is also true that such efforts have never been more concentrated than in the last decade or so. I had the great privilege as Australia’s Foreign and then Defence Minister to work with my Vietnamese counterparts to play a part in these efforts, including the move to a Comprehensive Partnership Agreement between our countries and the holding of the Inaugural Defence Ministers’ Dialogue. I was very pleased to see that these and other similar efforts saw, on the cusp of the 45th Anniversary of our diplomatic relations late last year, the elevation of our bilateral relationship to Strategic Partnership. The forging of the Strategic Partnership is for good reason: it is simply in Australia’s national economic and security interests to have a closer relationship with Vietnam. A country with a population of over 90 million, with whom we have strong people to people links, holds out great opportunities for Australia. In an age where Australian memories are much more of growing up with vibrant Vietnamese communities, great restaurants in our cities, and of backpackers touring Vietnam in numbers, the people-to-people contact between our countries is readily recognised by Australians. Less well recognised, but now growing in understanding by Australians, is Vietnam’s great potential to be an economic tiger in the Indo Pacific and a strategic influence in ASEAN. The growth in our bilateral relationship has also seen greater cooperation in our important regional forums, including APEC, the East Asia Summit and the Vietnam in the Indo-Pacific 5 ASEAN Defence Ministers Plus Meeting. The growth of Vietnam’s economy will see it at some stage become one of the world’s top-20. The bilateral developments I describe above could not have been achieved without ongoing Australian diplomatic efforts. Nor could they have been achieved without a Vietnam which had a forward looking view of Australia as a partner. Vietnam’s long history has taught it to sometimes be wary of great powers, including modern powers like China, the United States, and during the Cold War era, Russia. Australia is not and has no pretensions to be a great power. Our involvement in the “American War” is understood and acknowledged by Vietnam as an historic fact, which does not get in the way of a 21st century Australia-Vietnam bilateral relationship. How Vietnam manages its relationship with China, and its expanding bilateral relationship with the US, will be a key contemporary challenge for Vietnam. Growing and reforming its economy to maximise the benefits to flow to its people will also be a significant and ongoing challenge. Accepting in due course its capacity to be a strategic influence in the Indo-Pacific will also cause a Vietnamese policymaking to rethink their very strategic identity. There is no Australian institution better placed to examine these issues in their Indo-Pacific context than the Perth USAsia Centre. The Centre’s brief is to examine significant geostrategic issues from the vantage point of Australia’s Indian Ocean capital, Perth. Much of the Indo-Pacific discussion is led by the rise of India as a great power, and the emergence of Indonesia as a global influence, not just a regional influence. A 100-million strong Vietnam, with a vibrant people and economy, will necessarily be a vital part of the Indo-Pacific as well. The compendium of authors and their respective articles in this Perth USAsia Centre publication is a significant contribution to understanding that, and the opportunities and challenges that poses for Australia, Vietnam and the Indo Pacific. Stephen Smith Distinguished Fellow, Perth USAsia Centre, former Minister of Defence, former Minister for Foreign Affairs 6 Vietnam in the Indo-Pacific INTRODUCTION In the early years of the 21st century, regional powers in their own right. Vietnam has emerged as one of Asia’s Security relations have also become newest regional powers. After two more contested, such as the increasing decades of high-speed growth unlocked rivalry between the US and China by economic reforms, it has already alongside emerging maritime disputes become a middle-income country and in the South China Sea. Indeed, the very will soon join the ranks of the major concept of who and what constitutes the economic powers. Its growing levels of Asian region has also changed, with the confidence, capacity and importance new ‘Indo-Pacific’ concept extending has seen it adopt a more active the region to encompass the Indian diplomatic posture in key regional fora Ocean. Vietnam is re-emerging as a such as ASEAN, APEC and the East Asia power within a regional context that is Summit. It has also become a central itself very much in flux. player in security developments in the This Perth USAsia Centre Special Report region, particularly in the maritime examines Vietnam’s role in the evolving and non-traditional security spaces. Indo-Pacific regional order. Bringing For the first time since the conclusion together a mix of leading Australian and of the Indochina Wars in the late Vietnamese authors, it offers an up-to- 1980s, Vietnam is again central to the the-minute analysis of the opportunities international politics of Asia. and challenges facing Vietnam’s Yet much has changed in the region economic, security and diplomatic role over this time. US hegemony in Asia in the Indo-Pacific. By exploring the has given way to a more multipolar drivers, dynamics and implications balance of power, with China, Japan of Vietnam's rise as a regional power, and increasingly India all aspiring it aims to help policymakers and to regional leadership.