At first, Vietnam was cautious about the efforts due to fear of a potential reaction from China. However, through the visits of high-ranking members of the U.S. government, the Biden administration has sought to persuade Vietnam to upgrade their diplomatic relations. The U.S. now expects to be moved to the top from two notches below the top tier of Vietnam’s diplomatic ranking, where Russia and China also rank. In July, Biden stated that officials from both countries were optimistic about the two-step upgrade.
China’s foreign ministry spokeswoman, Mao Ning, stated that when engaging with other Asian countries, the United States should not target a “third party. China’s President Xi Jinping or Premier Li Qiang could also meet Vietnamese leaders to discuss top-level visits before or after Biden’s visit to Hanoi. Li is also set to attend the ASEAN summit in Jakarta.
In the short term, it remains unclear what Vietnam will gain from the upgrade in relations. An incentive offered is to support Vietnam’s ambition to become a hub for the semiconductor industry. Cooperation could increase in the energy sector as Vietnam prepares to become a player in both offshore wind and liquefied natural gas (LNG).
Though a deal is not expected, a boost in U.S. military supplies to Vietnam has long been discussed. Vietnam is also discussing upgrading and expanding its arsenal, which is mostly made by Russia, with several other countries. Vietnam has met with top Russian officials to engage in high-level defense meetings.
During Biden’s visit, the energy firm AES as well as Boeing may make announcements about plans to expand to Vietnam.
Vietnam’s largest market for its exports is currently the United States. U.S. customs procedures could potentially be eased as a way to boost trade.
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