Vice Admiral Phillip G Sawyer (R), Commander of the US Navy's 7th Fleet, greets Vietnamese officials after the US aircraft carrier USS Carl Vinson pulled into port in Danang on March 5, 2018. Photo: AFP/Linh Pham

With the USS Carl Vinson’s arrival this week in Da Nang, the first port of call of an American aircraft carrier to the country since the end of the Vietnam War in 1975, the two former battlefield adversaries have taken yet another symbolic step in drawing closer together.

The giant American naval vessel’s docking comes shortly after US Defense Secretary James Mattis visited Hanoi on January 24, just days after the Pentagon released a new National Defense Strategy (NDS), a policy shift that openly identifies China as a “strategic competitor” in need of a counterbalancing.

Vietnam had arguably arrived at a similar policy conclusion in mid-2017, when many in the country’s Communist Party leadership, including in the powerful Politburo, recognized the strategic need to lean more towards the US and way from China due to heated developments in the contested South China Sea.

Vietnam’s less openly apparent policy shift came despite still strong skepticism about the US and its intentions among certain power-wielding Party elites, not least among them Communist Party General Secretary Nguyen Phu Trong and Defense Minister Ngo Xuan Lich. Trong in particular is viewed as being close to China.

But a series of standoffs with China in nearby waters, including areas known to be rich in oil and gas, has driven the strategic recalibration towards the US. Those sea showdowns intensified in mid-2014, when China deployed a massive oil exploration rig, known as the Haiyang Shiyou 981, in Vietnamese claimed waters.

A US sailor drinks as he guards among aircraft aboard the US Navy aircraft carrier USS Carl Vinson after it docked at a port in Danang, Vietnam March 5, 2018. Photo: Reuters/Kham

During that three-month standoff, Vietnam’s strategic partners, including key arms supplier Russia, turned away rather than dare to confront Beijing. Nor did Vietnam’s Politburo or National Assembly issue a resolution of condemnation, viewed by many as a face-losing humiliation.

Then US Pacific Commander Admiral Samuel Locklear, however, suggested at the time that the two sides work to develop a deeper strategic partnership to extend what was then only mild military cooperation, hindered largely by a lethal arms embargo held over from the Vietnam War.

Those US overtures were by and large ignored, however. Meanwhile, Party leader Trong, known for his close ideological ties and open lines to China, reportedly called Chinese President Xi Jinping nearly 20 times to speak about the tensions around the oil rig but the Chinese leader apparently declined to receive his calls.

Angry nationalistic protestors later targeted Chinese interests in the country, including in industrial areas, forcing Beijing to evacuate hundreds of its nationals. An estimated 21 Chinese nationals were killed and hundreds injured in the melees, according to a The Guardian report.

Vietnam’s tightrope balancing act between China and the US wobbled further amid Beijing’s assertiveness in the South China Sea in 2017, including around the oil and gas rich Vanguard Bank. Chinese ships intensified their provocations and even shot at Vietnamese fishing boats in the area.

A Chinese naval boat (L) supposedly ramming a Vietnamese vessel (R) in contested waters in the South China Sea in June 2014. Photo: AFP/Vietnam maritime police

After one such incident around Vanguard Bank in July 2017, Vietnamese defense chief Lich traveled to Washington to hold talks with his US counterpart Mattis. It is believed the two sides agreed to the USS Carl Vinsson visit during that particular meeting.

In October 2017, Deputy Defense Minister Senior Lieutenant General Nguyen Chi Vinh was the next senior Vietnamese officer to visit Washington. In a meeting with former prisoner of war and current US Senator John McCain, Vinh delivered the letters McCain’s relatives sent to him while he was detained at Hao Lo prison.

Despite years of diplomatic warming, often spearheaded by McCain himself, Vietnam had until then held onto the family letters. But there is much more at stake for Vietnam in gravitating toward the US than war era reconciliation.

In early 2017, Prime Minister Nguyen Xuan Phuc warned of a possible “collapse” of the national fiscal budget, driven in part by a drastic fall in oil export revenues caused by lower global prices and fast declining local output.

Since 2015, Vietnam’s revenues from crude oil exports have fallen by some 40%. Some industry analysts have estimated Vietnam may run out of oil reserves altogether as early as 2021, the year Vietnam will hold its next five yearly Communist Party Congress. To many in the Party, China threatens to make that dire fiscal situation worse.

A Chinese Coast Guard vessel (R) passes near the Chinese oil rig, Haiyang Shiyou 981 (L) in the South China Sea June 13, 2014. Photo: Reuters/Nguyen Minh

Last July, China pressured Vietnam into suspending joint oil and gas exploration with Spanish energy company Respol around the Vanguard Bank area, which Vietnam claims as part of its sovereign territory.

According to international media reports, China had threatened to attack Vietnamese military outposts in the Spratly Islands if Respol continued its exploration activities.

Vietnamese officials fear the Blue Whale field, currently being developed in a joint venture between US energy giant ExxonMobil (64% operating stake) and state-run PetroVietnam, could be China’s next target for intimidation.

The off-shore field, known in Vietnamese as Ca Voi Xanh, is estimated to hold reserves of anywhere between 85 to 283 billion cubic feet of gas reserves. The companies have announced they expect to produce the first gas for power generation by 2023.

Vietnam has said revenues from the field could earn as much as US$20 billion for the national budget over the life of the project.

While the US certainly has a commercial interest in the Blue Whale project (it was signed in the presence of then US Secretary of State John Kerry), the deployment and docking of the USS Carl Vinson has much wider strategic implications, as outlined in the Pentagon’s new NDS.

US aircraft carrier USS Carl Vinson arrives at a port in Danang, Vietnam March 5, 2018. Photo: Reuters/Kham

While the NDS identifies five major challenges to US national security interests, namely (1) China, (2) Russia, (3) North Korea, (4) Iran, and (5) terrorism, the policy reorientation is expected to focus particularly on the Asia-Pacific, including maintaining freedom of navigation in the South China Sea.

Beijing has voiced its concerns that the US is bidding to “encircle” its interest through an emerging network of regional alliances and initiatives. China’s critics say it is bidding to turn the maritime area, through which over US$5 trillion of global trade passes every year, into a Beijing-controlled “toll station” for international shippers.

They believe Chinese President Xi Jinping, now vying to extend his tenure beyond traditional term limits, could move more aggressively in the area after the completion of this month’s Communist Party Congress, in a bid to deflect attention from his power play by stoking nationalistic fires.

If so, Vietnam-claimed areas of the Spratly islands, a close target geographically for China’s emerging forces in the area, could quickly emerge as a new regional flash point. Tensions are already brewing in the area.

In August 2016, Reuters cited “intelligence” information in reporting that Vietnam had test-launched missiles in five areas of the Spratlys, which if true would have been meant as a clear provocation towards China.

In a media interview, Deputy Defense Minister Vinh neither confirmed nor denied the test launches occurred. Strategic analysts saw the move as a counter to China’s test launch of missiles at the contested Woody Island in the Paracel Islands in 2015.

Vietnamese (R) and US naval officers during a welcoming ceremony to the US aircraft carrier USS Carl Vinson after it docked at a port in Danang, Vietnam March 5, 2018. Photo: Reuters/Kham

Whether the US would be willing to intervene in a China versus Vietnam conflict in the name of maintaining freedom of navigation is unclear.

What is clear is that the US and Vietnamese defense establishments are keen to develop deeper strategic ties, including via more naval exchanges, small weapons sales and the future establishment of a joint military drill mechanism.

In 2013, three US warships docked at Da Nang with considerable less fanfare than the USS Carl Vinson’s visit to carry out routine “naval exchanges” with Vietnamese naval counterparts.

Since 2016, Vietnam has ignored at least three instances when US warships have traveled near the Paracel islands in an indirect challenge to China’s claim over the contested archipelago in the South China Sea.

On two of those occasions, Vietnam’s Ministry of Foreign Affairs said in public statements that the American vessels’ presence in the area was harmless and that “US ships have right of freedom in the South China Sea.”

It’s warm welcome of the USS Carl Vinson now underway at Da Nang, a clear sign of Vietnam’s shifting policy position between the US and China, will have further underscored that point.

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