Chinese President Xi Jinping’s recent visit to Vietnam emphasized collaboration against “unilateral bullying” to protect global free trade and supply chains, in light of challenges such as Trump’s tariffs.

Xi met with Vietnamese leaders, including Communist Party chief To Lam and Prime Minister Pham Minh Chinh, highlighting the importance of economic globalization and infrastructure cooperation.

The two countries signed 45 agreements covering areas like AI, agriculture, customs, and media.

Efforts to improve connectivity were emphasized, including the creation of a joint committee to promote railway development.

Vietnam, heavily dependent on Chinese raw materials and trade, seeks to balance its trade relations.

China remains Vietnam’s largest trade partner, with bilateral trade exceeding US$205 billion in 2024.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Vietnam’s balancing act yields economic benefits amid great power competition

Vietnam has skillfully maintained relations with both China and the US, allowing it to become a major manufacturing hub amid trade tensions.

Since the US-China trade war began, Vietnam has emerged as a significant beneficiary, with manufacturers relocating operations across the Chinese border to avoid US tariffs 1.

This strategic positioning has boosted Vietnam’s exports to the US to nearly $140 billion in 2024, while maintaining China as its largest bilateral trade partner with commerce totaling over $205 billion last year 1, 2.

Vietnam’s foreign direct investment reached approximately $18.5 billion as companies sought to diversify from China-based production, with major firms like Apple and Samsung expanding their Vietnamese operations 3, 1.

This diplomatic balancing follows Vietnam’s longstanding foreign policy of “more friends, fewer enemies,” allowing it to leverage economic opportunities while navigating complex geopolitical waters 4.

However, this strategy comes with challenges, as Vietnam now faces potential 46% tariffs from the US amid concerns that approximately 16% of its manufacturing may involve rerouted Chinese products 3.

2️⃣ Economic cooperation persists despite decades of territorial disputes