By Khanh Vu and Phuong Nguyen
HANOI (Reuters) – The Communist Party of Vietnam meets for a congress next week that will help shape the country’s global role over the next five years, selecting new leaders and defining policies as tensions with Beijing and Joe Biden settle in the House White.
The 13th Communist Party Congress, from January 25 to February 2, will consolidate the leadership that seeks to leverage Vietnam’s economic success to strengthen legitimacy. To this end, the challenge of balancing relations with China and the United States, for which Vietnam has become an important strategic partner, in a world economy that has distanced itself from previous certainties, will be fundamental.
Stimulated by the redirection of global trade in its favor because of a dispute between the USA and China, Vietnam is becoming one of the most important technology manufacturing centers in the world, as well as a clothing production center, in an economy in the process to recover faster than most after the coronavirus pandemic.
“The US-China strategic competition will continue to destabilize the regional geostrategic and economic environment over the next five years,” said Le Hong Hiep, from ISEAS – Yusof Ishak Institute in Singapore.
“This is a major challenge for Vietnam, as the Vietnamese economy is very open and highly dependent on international trade and foreign investment,” he added.
Annual growth in Vietnam’s gross domestic product (GDP) has averaged 6.0% over the past five years, and still expanded 2.9% in 2020, despite the pandemic that destroyed economies elsewhere: Vietnam has succeeded in containing the coronavirus so far with strict quarantine, testing and tracking measures.
With just over 1,500 infections and 35 deaths in total, Vietnam – one of the last five Communist-ruled countries in the world, in addition to China, Cuba, Laos and North Korea – saw its economy overtake much of Asia last year, and is already looking at average GDP growth of 7.0% over the next five years.
“Vietnam’s leaders will have to learn how to minimize negative impacts and seize opportunities, especially the diversion of trade and investment from China,” said Hiep.
US TRADE TENSIONS
The main candidates for the new positions to be determined at the congress are widely known in political circles in Hanoi, but were officially declared top secret in December to discourage potentially critical debate. The Communist Party maintains strict control of the media and tolerates little criticism.
Vietnam officially has four leadership ‘pillars’: the head of the Party; the president of the state; the Prime Minister and the President of the National Assembly.
Although the power struggle in 2016 and the subsequent crackdown on government corruption deepened the lines of factional failure across the Party, most analysts expect continuity in formulating Vietnam’s economic, domestic and foreign policy after the congress. .
Fierce enemies during the US-Vietnam War, Hanoi and Washington have enjoyed significantly warmer relations in recent years, but lately there have been commercial tensions.
While the change in global supply chains caused by former US President Donald Trump’s trade war with China has benefited Vietnamese exporters, the Party leadership must face likely greater scrutiny from the United States – and new leadership in the House. White.
With the trade deficit with Vietnam widening significantly and rapidly, the United States, under the Trump administration, labeled Vietnam as a currency manipulator last year, increasing the prospect of American tariffs on Vietnamese products. The trade gap widened to $ 63 billion in 2020 from $ 47 billion in 2019.
The US Trade Representative said earlier this month that Vietnam’s actions to reduce the value of its currency were “irrational” and restricted US trade, but did not take immediate steps to impose punitive tariffs – leaving the decision in the hands of the Biden government.
“Vietnam will need to maintain a dialogue with the United States to better understand the Biden administration and sincerely review its trade and monetary policies and practices,” said Ha Hoang Hop, also from ISEAS-Yusof Ishak Institute.
TURBULENT WATERS
Internally, Vietnamese leaders will also have to fight against one of the fastest growing societies in Asia and the reform of an outdated higher education system that has left a shortage of highly qualified local labor.
The other main external challenge, observers say, will be to find ways to deal with China’s increasing aggressiveness in claiming vast areas of the South China Sea, potentially energy-rich, that overlap Vietnam’s exclusive economic zone.
“The prospects for the security of the South China Sea would be very pessimistic this year,” said Ha Hoang Hop. “Vietnam will have to be more vigilant and prepare to respond to hostile foreign forces.”
However, said the other observer Hiep, Vietnamese leaders are also well aware of China’s importance to Vietnam’s security and economic well-being, which has prompted Vietnam to “try to maintain a balance between the two great powers”.
Although Vietnam and China have been involved in a dispute over the South China Sea for years, China remains the largest source of materials and equipment for Vietnam’s thriving manufacturing industry.
Hop said other challenges for the next five-year leadership team include the reforms needed to implement newly signed international free trade agreements and a more comprehensive and proactive foreign policy.
Strengthening Vietnam’s national defenses is also on the agenda, as well as dealing with issues related to the development of the Mekong River – another increasingly tense battleground with Beijing – and keeping guard against COVID-19 by vaccinating the population.
(Reporting by Khanh Vu and Phuong Nguyen; Writing by James Pearson; Editing by Kenneth Maxwell)