• [World] China sentences Uyghur scholar to life in jail
• Exclusive: Biden aides in talks with Vietnam for arms deal that could irk China
• How China uses UNESCO to rewrite history | China
• Taiwan raises concerns about situation “getting out of hand“ with China drills
• Chinese dissident who held Tiananmen Square vigils flees to Taiwan
• The disappearance of China’s defence minister raises big questions | China
• China’s claim to the South China Sea gets even odder | Asia
• How will Biden’s hi-tech industry pledges to Hanoi affect China’s role in Vietnam and global supply chain?

[World] China sentences Uyghur scholar to life in jail

https://www.bbc.co.uk/news/world-asia-66900526?at_medium=RSS&at_campaign=KARANGA

Exclusive: Biden aides in talks with Vietnam for arms deal that could irk China

https://reuters.com/article/vietnam-usa-arms/exclusive-biden-aides-in-talks-with-vietnam-for-arms-deal-that-could-irk-china-idUSKBN30T03L

The Biden administration is in talks with Vietnam over an agreement for the largest arms transfer in history between the ex-Cold War adversaries, according to two people familiar with a deal that could irk China and sideline Russia.

A package, which could come together within the next year, could consummate the newly upgraded partnership between Washington and Hanoi with the sale of a fleet of American F-16 fighter jets as the Southeast Asian nation faces tensions with Beijing in the disputed South China Sea, one of the people said.

The deal is still in its early stages, with exact terms yet to be worked out, and may not come together. But it was a key topic of Vietnamese-U.S. official talks in Hanoi, New York and Washington over the past month.

Washington is considering structuring special financing terms for the pricey equipment that could help cash-strapped Hanoi steer away from its traditional reliance on lower-cost, Russian-made arms, according to the other source, who declined to be named.

Spokespersons for the White House and Vietnamese foreign ministry did not respond to requests for comment.

"We have a very productive and promising security relationship with the Vietnamese and we do see interesting movement from them in some U.S. systems, in particular anything that can help them better monitor their maritime domain, perhaps transport aircraft and some other platforms," said a U.S. official.

"Part of what we're working on internally as the U.S. government is being creative about how we could try to provide better financing options to Vietnam to get them things that might be really useful to them."

A major U.S.-Vietnam arms deal could aggravate China, Vietnam's larger neighbor, which is wary of Western efforts to box in Beijing. A long-simmering territorial dispute between Vietnam and China is heating up in the South China Sea and explains why Vietnam is looking to build up maritime defenses.

"They are developing asymmetric defensive capabilities, but (want) to do so without triggering a response from China," said Jeffrey Ordaniel, associate professor of international security studies at Tokyo International University and director for maritime security at Pacific Forum International, a think tank. "It is a delicate balancing act."

Ordaniel said Washington should shift funds set aside for financing militaries in the Middle East to the Indo-Pacific region "so partners like Vietnam, the Philippines and Taiwan can afford the weapons they need to resist Beijing."

The Biden administration has said it is trying to balance geopolitical competition with China, including in the Pacific, and responsibly managing the two superpowers' relationship.

Earlier this month, Vietnam upgraded Washington to Hanoi's highest diplomatic status, alongside China and Russia, when U.S. President Joe Biden visited the country.

The diplomatic turnaround marks a sharp pivot nearly a half-century after the end of the Vietnam War.

Since an arms embargo was lifted in 2016, U.S. defense exports to Vietnam have been limited to coast guard ships and trainer aircraft, while Russia has supplied about 80% of the country's arsenal.

Vietnam spends an estimated $2 billion annually in arms imports, and Washington is optimistic that they can shift a share of that budget over the long term to weapons from the United States or its allies and partners, especially South Korea and India.

The cost of U.S. weaponry is a major obstacle, as is training on the equipment, and is among the reasons the country has taken in less than $400 million of American arms over the past decade.

"Vietnamese officials are well aware that they need to spread the wealth," the U.S. official said. "We need to lead the charge in helping Vietnam get what it needs."

Meanwhile, the war in Ukraine has complicated Hanoi's longstanding relationship with Moscow, making supplies and spare parts for Russian-made arms harder to acquire. Nonetheless, Vietnam is also actively in talks with Moscow over a new arms supply deal that could trigger U.S. sanctions, Reuters has reported.

How China uses UNESCO to rewrite history | China

https://www.economist.com/china/2023/09/21/how-china-uses-unesco-to-rewrite-history

PU’ER TEA is an earthy brew beloved of dieters for its digestive qualities. Its leaves come from the forests of Jingmai mountain in south-west China, which was listed as a World Heritage site by UNESCO, the cultural arm of the United Nations, on September 17th. The designation, China hopes, will boost tea sales and lure tourists to the region, which is near the border with Myanmar, Laos and Vietnam. Chinese officials work hard to obtain the UNESCO stamp of approval. Only Italy has more such sites. No country comes close to China in terms of the number of cultural practices recognised by the organisation.

But there is more to China’s efforts than increasing tea sales and tourism. The Communist Party claims that present-day China, which has dozens (perhaps hundreds) of ethnic minorities, is a single nation with a continuous history stretching back thousands of years. National identity is conflated with that of the Han, the ethnic group accounting for more than 90% of the population. China’s heritage laws aim to maintain “the unification of the country” and foster “social harmony”. In practice, this often means distorting history so that it aligns with the party’s view of the past and reinforces its vision of nationhood.

When UNESCO conceived its record of World Heritage sites in the 1970s, China was intent on crushing its cultural relics. Today, though, China donates more money and sends more delegates to the international body than any other country. Many of the sites ratified by UNESCO, such as the Great Wall, are well known. But others, along with certain cultural practices, are put forward in order to legitimise the party’s rule over regions with large ethnic minorities, says Christina Maags of Sheffield University. Areas such as Xinjiang and Tibet have not always been part of China, nor dominated by the Han. Yet the party’s version of history tells a different story.

In the far-western region of Xinjiang, over 40% of the population are Uyghur, an ethnic minority. Their culture, language and Muslim faith set them apart from much of China. The Uyghur heartland began to fall under formal Chinese control in the mid-18th century—revealingly, the Manchu rulers of the Qing dynasty named it Xinjiang, meaning “new territory”. Over the past decade the party has forced Uyghurs and other ethnic minorities in the region to assimilate. After 2017 perhaps a million of them passed through “re-education camps”. Security remains intense, with the government citing concerns about terrorism and separatism. Activists say it is erasing the Uyghur culture.

None of this is reflected in the government’s nomination of the Tianshan mountains in Xinjiang as a World Heritage site. “Since ancient times, people of all Chinese nationalities have lived on this fertile land and have created a rich material culture and spiritual civilisation,” reads the application. It describes a Xinjiang of Han military towns and transportation centres and cites Han poets who lauded the Tianshan mountains. In nearly 1,000 pages of documentation the Uyghurs are mentioned only a handful of times, often as part of a list of ethnic groups who live in the area. A similar history of Xinjiang was put forward by the Chinese government when a portion of the Silk Road was up for UNESCO recognition. The region was described as a cultural belt that saw the “integration” and “continuous fusion” of Han people with “local residents”.

When Mao Zedong’s guerrillas seized power in 1949, China’s borders were not clearly defined, nor its population entirely submissive. In 1950, when Communist troops invaded Tibet, they were not welcomed by its residents as liberators, as the party claims. Promises of autonomy were broken, leading to an abortive Tibetan uprising against Chinese rule in 1959. The history approved by UNESCO, though, suggests a more harmonious past. In 2013 the organisation accepted the records of Tibet from China’s Yuan dynasty (1279–1368) into its “memory of the world”. These were proof, said the government in Beijing, of an ancient period when imperial rulers were “highly tolerant of the religious, political system and culture of Tibet”—and also evidence that the integration of Tibet into China under the Yuan was lasting.

All for one

To bolster the idea of a Han-centric identity, the party seeks to dilute the contributions of minority groups in UNESCO claims. For example, documents filed with the organisation state that Tibet’s Potala Palace, the winter home of Dalai Lamas from 1649 to 1959 (pictured), exhibits the skills of many ethnic groups, not just Tibetans. The government uses “radical selectivity” in choosing which places, people and practices to emphasise, says Rachel Harris of the School of Oriental and African Studies, part of the University of London.

The state is also selective about what cultural practices it ascribes to different groups. The Han are typically credited with “civilisation building”, says Juheon Lee of Midwestern State University in Texas. So the group is associated with applications involving high culture, such as the Peking opera, or technical expertise, such as bridges. In contrast, ethnic groups in border regions are nominated for folk practices like medicinal bathing (Tibetans) and throat singing (Mongols).

UNESCO tends not to dispute China’s claims. Nor would it be safe for historians in China to do so. Ms Harris notes that Uyghur scholars are locked up for asserting a different version of history. But the party’s effort to put forward its own interpretation has been slowed, at least. In 2018 UNESCO changed its rules so that a country could nominate just one new site a year. ■

Subscribers can sign up to Drum Tower, our new weekly newsletter, to understand what the world makes of China—and what China makes of the world.

Taiwan raises concerns about situation “getting out of hand“ with China drills

https://reuters.com/article/taiwan-china-defence/taiwan-raises-concerns-about-situation-getting-out-of-hand-with-china-drills-idUSKBN30T013

The increased frequency of China's military activities around Taiwan recently has raised the risk of events "getting out of hand" and sparking an accidental clash, the island's defence minister said on Saturday.

Taiwan has said that the past two weeks has seen dozens of fighters, drones, bombers and other aircraft, as well as warships and the Chinese carrier the Shandong, operating nearby.

China, which views democratically governed Taiwan as its own territory, has in recent years carried out many such drills around the island, seeking to assert its sovereignty claims and pressure Taipei.

Asked by reporters on the sidelines of parliament whether there was a risk of an accidental incident sparking a broader conflict given the frequency of the Chinese activities, Taiwan Defence Minister Chiu Kuo-cheng said: "This is something we are very worried about".

Warships from China's southern and eastern theatre commands have been operating together off Taiwan's east coast, he added.

"The risks of activities involving aircraft, ships, and weapons will increase, and both sides must pay attention," Chiu said.

China has not commented about the drills around Taiwan, and its defence ministry has not responded to requests for comment.

Chiu said that when the Shandong was out at sea, which Taiwan first reported on Sept. 11, it was operating as the "opposing force" in the drills. Ministry spokesman Sun Li-fang added that China's Eastern Theatre Command forces were the "attacking force", simulating a battle scenario.

Taiwan's traditional military planning for a potential conflict has been to use its mountainous east coast, especially the two major air bases there, as a place to regroup and preserve its forces given it does not directly face China unlike the island's west coast.

But China has increasingly been flexing its muscles off Taiwan's east coast, and generally displaying its ability to operate much further away from China's own coastline.

China normally performs large-scale exercises from July to September, Taiwan's defence ministry has said.

On Saturday the ministry said China had largely dialled back its drills, reporting that over the previous 24 hour period it had only spotted two Chinese aircraft operating in its air defence zone.

Taiwan has frequently said that it would remain calm and not escalate the situation, but that it won't allow "repeated provocations" from China, whose forces have so far not entered Taiwan's territorial seas or airspace.

Chinese dissident who held Tiananmen Square vigils flees to Taiwan

https://www.theguardian.com/world/2023/sep/22/chinese-dissident-tiananmen-square-vigils-flees-taiwan-chen-siming

A Chinese dissident known for regularly commemorating the 1989 crackdown on pro-democracy protesters in Beijing’s Tiananmen Square has fled to Taiwan where he pleaded for help in seeking asylum in the US or Canada.

In a video posted online on Friday, Chen Siming said he was in the transit area at Taoyuan international airport to escape Chinese political persecution.

“The Chinese police’s stability maintenance methods directed towards me were becoming more and more cruel and crazy,” he said in his post. “They detained me at will without following legal procedures, taking my cellphone and even giving me a psychiatric evaluation. I can no longer continue to accept the ravaging of my personal dignity, the trampling of my honor and the threat to my body.”

It is unclear how Chen was able to travel to Taiwan but he told the Associated Press he had left China on 22 July. Taiwan is a self-governing island that is claimed by China.

Chen said that since 2017 police had taken him into detention every year, primarily for his annual Tiananmen Square commemorations. The shortest detention had lasted a week with the longest being 15 days, he said.

In China, public memorials in honour of the protesters who were killed in the crackdown are likely to attract police attention, detention or arrest.

In May, authorities in China’s southern Hunan province detained Chen after he posted on social media commemorating the protests. He described being harassed by state security police over the years during “sensitive periods” around the anniversary date.

The group Chinese Human Rights Defenders said he was believed to have been held in a detention centre in Zhuzhou, Hunan, shortly afterwards.

The group urged Taiwan to help Chen seek asylum. “If Chen Siming is returned to China, he faces an almost certain risk of detention, torture and other ill treatment, and an unfair trial,” said William Nee, the group’s research and advocacy coordinator.

What happens next for Chen will be complicated. Taiwan does not have a formal refugee policy and has become increasingly wary of security risks posed by China. It has denied permanent residency to some people seeking to move from Hong Kong because of Beijing’s increasing control over the city.

Chen said he was aware of the risks but preferred Taiwan over escaping to Thailand or Laos,where other Chinese dissidents often flee.

“I entered Taiwan illegally, but Taiwan is a democratic and free society, a country. Even if I am sitting in jail here, I would feel safe,” Chen said.

The disappearance of China’s defence minister raises big questions | China

https://www.economist.com/china/2023/09/20/the-disappearance-of-chinas-defence-minister-raises-big-questions

An ability to groom talented officials, China’s leader, Xi Jinping, once said, “largely determines the rise and fall, as well as the survival or demise” of political parties and countries. After a sweeping reshuffle of ministerial posts in March, the government’s main news agency, Xinhua, recalled Mr Xi’s words in an article aimed at showing how meticulous the selection process had been. Since late June, however, two of the most senior officials who were promoted in that shake-up have disappeared: first Qin Gang, the former foreign minister, and more recently General Li Shangfu, the defence minister. The swiftness of their apparent downfalls has been striking. The questions they raise about China’s politics are big.

There is no sign that this is an existential moment for the Communist Party, or Mr Xi’s rule. Adulation of Mr Xi continues unabated in state media. He stayed away from the G20 summit in Delhi on September 9th and 10th—an unprecedented absence. But on September 16th and 17th Wang Yi, who succeeded Mr Qin as foreign minister in late July, met America’s national security adviser, Jake Sullivan, in Malta. According to Bloomberg, they discussed a possible meeting between Mr Xi and President Joe Biden at a gathering of Asia-Pacific leaders scheduled for November in San Francisco. China’s military activities appear unaffected, too. On September 17th and 18th about 100 Chinese fighter jets flew around Taiwan, an unusually high number in such a space of time.

But the churn at the highest levels of the state and military apparatus has been unusually fast, even by the standards of Mr Xi’s purge-filled tenure. General Li has not been seen in public since August 29th, when he appeared at a China-Africa security forum. He was supposed to attend an annual meeting with Vietnamese defence officials on September 7th and 8th. But that plan was scrapped, with Chinese officials citing the general’s health. Unspecified illnesses seem to be a common problem for those in political trouble. Mr Qin was said to have a health condition, too. But according to the Wall Street Journal, senior Chinese officials were told in secret last month that he had “lifestyle issues”. They allegedly involved an extramarital affair, resulting in the birth of a child, while Mr Qin was ambassador in Washington before becoming foreign minister.

On official websites, no change has been indicated in General Li’s duties. But American and other officials have told Western media that they believe he has been relieved of his post. Reuters reported that he was suspected of corruption related to the procurement of military equipment, which he oversaw from 2017 to 2022. The news agency said that eight senior officials from the procurement department were being investigated, too.

There is also speculation that graft is a reason for the replacement in late July (announced in state media) of General Li Yuchao and General Xu Zhongbo. They were the two most senior commanders of the Rocket Force, which controls China’s nuclear and conventional missiles. General Li Yuchao had been put in charge only last year. A less high-profile but equally unusual personnel change came to light on September 1st with the dismissal of Major General Cheng Dongfang as president of the People’s Liberation Army military court after just eight months in the job. No reason was given. General Cheng had previously served as spokesman of China’s military garrison in Hong Kong.

On Chinese social media, censors have stifled most discussion. Only one comment is visible on the post of a user with more than 670,000 followers who hinted at the defence minister’s absence. “Aren’t you afraid of having your account closed down?” it says. “Don’t talk about him.” But given Mr Xi’s efforts to portray China’s political system as a more stable and effective alternative to liberal democracy, the purges have provided rich pickings for his foreign critics. On X (formerly Twitter) America’s ambassador to Japan, Rahm Emanuel, compared the turnover to Agatha Christie’s novel, “And Then There Were None”. He later offered another literary analogy: “As Shakespeare wrote in Hamlet, ‘Something is rotten in the state of Denmark’.”

To be sure, the posts of defence minister and foreign minister are not as critical in China as they often are in other countries. Neither General Li nor Mr Qin are among the 24 members of the Politburo, the apex of political power. But the ministerial jobs involve defending the country’s interests abroad. (In China’s eyes, Mr Qin’s alleged behaviour may have made him a security risk.) And the purges raise questions about Mr Xi’s ability to select the right talent and his capacity to scare officials into avoiding corruption.

The moves have targeted people who were clearly Mr Xi’s men. Mr Qin’s elevation to the rank of foreign minister was unusually rapid, suggesting he may have impressed Mr Xi during a stint as the chief organiser of his foreign trips. He was promoted last year to the party’s Central Committee and in March got the additional title of state councillor (a senior role in China’s cabinet). Only four others hold that rank, including General Li. The defence minister is also a Central Committee member and one of the six officers who work under Mr Xi in the armed forces’ governing body, the Central Military Commission.

Team of no rivals

General Li and Mr Qin were among many people close to Mr Xi who benefited from the reshuffle in March as well as another one last October involving party jobs. The overhaul produced a ruling team more seemingly in lockstep with the paramount leader than any since the era of Mao Zedong. In China, questions will certainly be asked (in whispers) about how stable it is.

But Mr Xi must be used to muttering. His previous purges have affected hundreds of thousands of officials, high and low, including many in the services most vital to maintaining the party’s grip on power: the armed forces, the police and the spy apparatus. Most of the fallen have been accused of corruption, but some, too, of political wrongdoing. Last September courts imposed lengthy prison sentences on several security chiefs accused of being corrupt, as well as members of a disloyal cabal. They included a former deputy minister of public security and a former justice minister. In 2015 Zhou Yongkang—a retired head of China’s internal security services and former member of the Politburo’s Standing Committee—was sentenced to life in prison for bribery and leaking state secrets. Mr Xi accused him and other jailed associates of attempting to “seize power”.

If General Li is replaced as defence minister, there could be an upside for America. Last August, in response to a visit to Taiwan by the then speaker of America’s House of Representatives, Nancy Pelosi, China halted regular talks between the two countries’ defence establishments. America is keen to restart them, seeing them as useful for discussing ways of preventing unintended clashes. But while working in procurement, General Li was placed under American sanctions in 2018 for buying fighter jets and missiles from Russia. China wants the sanctions to be lifted before talks resume. Removing the man himself may resolve an impasse. ■

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China’s claim to the South China Sea gets even odder | Asia

https://www.economist.com/asia/2023/09/21/chinas-claim-to-the-south-china-sea-gets-even-odder

LATE LAST month the government in Beijing published a “standard map” of China and all its territorial claims. It did a strikingly efficient job of upsetting the neighbours, from India to Japan, but above all those around the South China Sea. Vietnam objected to the map’s inclusion of the Paracel Islands, which China seized from it in 1974. The Philippines protested over the Scarborough Shoal, from which China has barred it by force since 2012, even though it lies well within the Philippines’s 200-nautical-mile exclusive economic zone (EEZ). And the map’s inclusion of the Spratly Islands—a welter of islets, atolls and reefs spread out across a vast swathe of the South China Sea a very long way from China itself—angered those countries and Malaysia, too.

Yet that much was predictable. South-East Asians have long suffered from Chinese expansionism in the South China Sea. China’s notorious “nine-dash line” is both symbol and tool of its extravagant claims: a U-shaped tongue of passive cartographic aggression, it encompasses almost the entire sea. In 2016 an arbitral tribunal at The Hague, in a case brought by the Philippines, ruled among other things that the line had no basis in law. Yet the new standard map even includes an extra dash to the line, placed east of Taiwan. This new, tenth dash has bred the most consternation. Some sense that it opens a new front in China’s grandiose claims. Is that likely?

The concerns are overdone, writes Bill Hayton in Fulcrum, house journal of the ISEAS-Yusof Ishak Institute, a regional research outfit in Singapore. This is not the first time Chinese cartography has included a tenth dash. Besides, Mr Hayton explains, the nature of the U-shaped line, which dates back to the 1940s, has always been vague and subject much of the time to “happenstance and incompetence”. Back then, Chinese mappers were not really clear what lay inside the line, which was intended as merely a schematic outer marker of what might in future be claimed within it. In recent decades, vagueness has suited the Chinese Communist Party as it has asserted (though never officially) absurd “historic rights” over everything inside the line. Maximalist claims, in turn, help China bully neighbours over things like fisheries and hydrocarbons exploration. The basis of the new line, says Mr Hayton, is as nonsensical as was the original.

In the Diplomat, an Asia-focused online magazine, Mark Raymond of the University of Oklahoma and David Welch of the University of Waterloo in Ontario go further. The tenth dash seems intended to incorporate Taiwan, which China has long claimed as its own. Yet the dash falls arbitrarily, neither demarcating Taiwan’s territorial waters nor fully including its official EEZ. It therefore does not match any maritime area China formally claims. The authors suggest this and other inconsistencies are tacit acknowledgment that China knows that claiming everything inside its U-shaped line is fanciful. Were it to be up front about this it would cause a backlash at home. That would be to confess to an “intensely nationalistic domestic audience that China does not have the full slate of sovereign rights in the South China Sea that it previously behaved as though it had”.

Since the map’s publication, senior Chinese officials have sought to dampen the controversy over it. They speak of China’s “brotherly ties” with its neighbours and need for co-operation on the troubled sea. Yet, says Jay Batongbacal of the University of the Philippines, to expect good behaviour from China is fanciful. Its powerful coastguard has used military-grade lasers against Philippine counterparts and last month forcibly blocked the resupply of a Philippine military outpost on the Second Thomas Shoal. The shoal is perhaps the sea’s likeliest flashpoint right now. Mr Batongbacal says China might want to provoke an escalation there and then blame it on the Philippines.

The expectation of continued Chinese coercion in the South China Sea is thickening military ties among others wary of it. Defence co-operation between America and the Philippines, a treaty ally, is growing fast. In August the Philippines held joint naval exercises with America, Australia and Japan—a first. This week the ten-nation ASEAN conducted its first-ever combined exercises (admittedly well to the south of the contested parts of the sea). Small steps add up to a big change from even a few years ago, when neighbours were reluctant to do anything to offend. China has only its behaviour, and ludicrous map, to blame.■

Read more from Banyan, our columnist on Asia:
How to unite India, Bollywood-style (Sep 14th)
Joe Biden’s visit to Hanoi is a signal to China (Sep 7th)
South-East Asian democracy is declining (Aug 31st)

How will Biden’s hi-tech industry pledges to Hanoi affect China’s role in Vietnam and global supply chain?

https://www.scmp.com/economy/china-economy/article/3235487/how-will-bidens-hi-tech-industry-pledges-hanoi-affect-chinas-role-vietnam-and-global-supply-chain?utm_source=rss_feed

Washington’s latest pledges to hi-tech industries in Vietnam could further move the Southeast Asian nation up the manufacturing value chain, signalling a resolute de-risking from Beijing and subsequently threatening China’s industry dominance.

While it is not likely to push China out of supply chains in the short term, many analysts warn that Beijing’s tactic of using its Southeast Asian neighbour as a re-export centre may receive further scrutiny.

Vietnam signed billion-dollar deals with American businesses, including Boeing, Microsoft and Nvidia, during US President Joe Biden’s two-day state visit to Hanoi on September 10 – when he pledged to deepen cooperation in “cloud computing, semiconductors and artificial intelligence”.

Last week US Commerce Secretary Gina Raimondo further discussed with Vietnamese Prime Minister Pham Minh Chinh how to advance their comprehensive strategic partnership, including US recognition of Vietnam’s market economy status.

Alicia García-Herrero, chief Asia-Pacific economist for French investment bank Natixis, said while China was “much more present in Vietnam than the US” in terms of manufacturing companies and investment, the big question was whether Biden’s pledges and the US move into hi-tech production would “push China out of Vietnam”.

“This is very difficult, I think Vietnam will try to play both games, but I am sure the US is going to ask Vietnam to strengthen its rules of origin, meaning it is not going to be possible any more for Vietnam to export Chinese products as if they were Vietnamese instead of Chinese,” she said. “This is a big minus for Chinese companies operating in Vietnam.”

García-Herrero said a major reason for Chinese companies to move to Vietnam would be to avoid tariffs.

Kyle Freeman, a Hanoi-based partner at business advisory firm Dezan Shira & Associates, expects to see some changes in the supply chain.

“I would expect that to continue to shift a little bit. As countries like Vietnam gain more experience in production we should expect them to move up the value chain and also take up a bigger share in the component part as well,” he said.

Why is China’s manufacturing sector increasingly drawn to Vietnam?

Freeman, who relocated from Beijing last year, said while Vietnam was still well positioned to continue to gain a larger amount of market share in these key export industries because of low costs and a young labour force, the country’s labour force would need workers more educated in the hi-tech areas Biden mentioned in the visit.

“Vietnam does have a shortage of engineers, so I think any US investment, especially from the administration or … at a government level, would need to relate to training in these areas as well,” he said.

Hanoi is seen as benefiting from the US-China trade war that started in 2018 when American companies switched manufacturing away from China towards alternative manufacturing hubs in Asia to avoid being hit with tariffs and caught in the intensifying geopolitical cross hairs.

Vietnam’s trade with both China and the US has been booming since then. China has for years been its top trading partner, with a total trade value of US$175.57 billion last year, followed by US$123.86 billion with the US, according to data from Vietnam’s customs agency.

The US, however, remains Vietnam’s largest export market, accounting for 29.4 per cent of total merchandise exports last year. That is set to be expanded under the US-led Indo-Pacific Economic Framework for Prosperity.

Vietnam’s position of holding the world’s second-largest rare earth reserves after China – at 22 million tonness, or half China’s reserves – had already given it an edge in attracting tech manufacturers needing the critical material for production in addition to its labour-intensive exports such as garments and electronics.

Washington-Hanoi economic ties are expected to grow closer as Western governments look to de-risk from China in the supply chain.

Meanwhile, Vietnam has always attempted to balance geopolitical tensions with its powerful neighbour China and remain reliant on Chinese supply chains and investment.

When attending the Belt and Road Summit in Hong Kong on September 13, Nguyen Chi Dung, Vietnam’s Minister of Planning and Investment, said the restructuring of supply chains were “opportunities for increased cooperation” between China, Vietnam and Southeast Asian countries.

US ‘friendshoring’ chips push hits a snag as ‘Vietnam can’t decouple from China’

He called to further “policy coordination” on economic cooperation, ranging from free-trade ports and the digital economy.

According to Nguyen, Chinese investors have grown more active in Vietnam. In the first eight months of this year, China’s registered greenfield investment capital reached US$2.7 billion – around 10 per cent of the total US$26 billion in registered investment by 4,000 Chinese companies in Vietnam.

China overall ranks 6th among 143 investing partners in Vietnam.

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