Vietnamese Prime Minister Nguyen Xuan Phuc (second left) and Japanese PM Shinzo Abe bow in front of their national flags as they review an honor guard prior to their meeting at Abe's official residence in Tokyo on May 28, 2016. Photo: AFP / Pool / Koji Sasahara

As Japan’s longest-serving prime minister, Shinzo Abe has left great diplomatic legacies, one of the most remarkable being bilateral strategic relations between his country and Vietnam. Therefore, his stepping down has many implications for both countries.

Nevertheless, given what the two sides have achieved so far, their mutual interests and the regional geopolitical landscape, basically the Vietnam-Japan strategic partnership should stay strong.

Abe contributed substantially to the development of Vietnam-Japan relations. In his first term, Vietnam and Japan announced in 2006 that they would work together toward a Strategic Partnership for Peace and Prosperity in Asia, which was a historical hallmark of Vietnam-Japan diplomatic ties.

Then in 2014, during Abe’s second term, thanks to his consistent support for defense and security ties with Vietnam previously, during a visit to Tokyo by Vietnamese president Truong Tan Sang, the two sides upgraded their partnership to an “Extensive Strategic Partnership for Peace and Prosperity in Asia,” opening up a new era in Vietnam-Japan relations.

Besides, Japan has backed Vietnam’s chairmanship of the Association of Southeast Asian Nations (ASEAN) and non-permanent membership of the United Nations Security Council.

In these respects, Abe’s abrupt resignation may raise questions on the future of the Vietnam-Japan strategic partnership, especially in the security and economic realms.  Nonetheless, Japan will likely maintain the momentum of its strategic relations with Vietnam and in both security and economic terms.

Security relations

With regard to bilateral security ties, in the post-Abe era, although Japan will make some adjustments in its defense policy, it will still seek to foster defense cooperation with Vietnam.

According to an official account of the interaction released by Vietnam’s Defense Ministry, the two sides agreed to boost aspects of their defense ties this year. One may argue that Abe’s resignation could lead to a disruption in this agreement, as it is uncertain whether his successor of Abe will prioritize defense ties with Vietnam.

Abe’s departure will unavoidably cause a postponement of joint Vietnam-Japan defense activities, at least in Japan’s leadership transition period. However, it would be far from the case that Vietnam-Japan security relations would be disrupted.

At first glance, both sides are deeply concerned about China’s rising assertiveness in the region. Vietnam and Japan have maritime disputes with China in the South China Sea and East China Sea respectively. Therefore, they share the same interests in strengthening maritime security cooperation.

Because of the recently increasing military actions of China, especially in the South China Sea, the two countries’ threat perception vis-à-vis China is more acute, creating a catalyst for Vietnam and Japan to forge their security relations.

In fact, Japan and Vietnam have witnessed remarkable achievements in the realm of security, particularly maritime security. In July, they signed an agreement in which Japan provided Vietnam with maritime capacity-building support, including the provision of six brand-new coast-guard vessels.

Vietnam has welcomed this, reaffirming Japan’s crucial role in this area. The shared concerns about China and the previous achievements in the bilateral security ties laid a strong foundation for further cooperation, so it is likely that the post-Abe trajectory of Vietnam-Japan security relations will be maintained, or even growing.

Another factor that may hold Vietnam and Japan together in terms of security after Abe’s resignation is Japan’s “Free and Open Indo-Pacific” (FOIP) strategy, of which Abe is considered the architect. Combined with the aforementioned concern about China’s increasing assertiveness, regardless of who the next Japanese prime minister is, the FOIP strategy will still be instrumental for Japan in the foreseeable future.

In this strategy, Japan emphasizes the importance of ASEAN-centrality and unity in the Indo-Pacific regional architecture as well as Japan’s defense commitment to Southeast Asia, which was institutionalized in the “Vientiane Vision” in 2016.

Thanks to its location at the heart of Southeast Asia and the Indo-Pacific region, Vietnam is central to the FOIP strategy.

Importantly, as the chair of ASEAN in 2020, and potentially the emerging de facto leader of ASEAN, Vietnam may have a greater influence on the Southeast Asian bloc’s security agenda. This implies that Vietnam will play a key role in Japan’s FOIP strategy, and Japan needs Vietnam to strengthen its security relations with ASEAN.

In respect of this, despite the departure of Abe, it is highly possible that his successor will continue tightening its security ties with Vietnam.

Economic ties

In the economic area, Abe’s resignation is not a hindrance to the future of Vietnam-Japan economic ties, because there are both external and internal incentives for Tokyo to foster its economic relations with Hanoi.

Externally, the intensifying US-China tensions and the Covid-19 pandemic favor closer Vietnam-Japan economic ties. Specifically, Japan has been gradually decoupling from China by shifting investment to other countries, including in Southeast Asia, in order to reduce reliance on manufacturing in China during and after the pandemic.

In this regard, Vietnam is one of the most attractive destinations for Japanese firms, given its efficiency in containing Covid-19 so far and its relatively high GDP growth compared with other Southeast Asian economies amid the pandemic.

According to an online survey conducted in 2019 by NNA Japan Co, a Kyodo News group company, Vietnam is the most promising Asian investment destination for Japanese businesses.

The increase in Japanese business activities in Vietnam is considered the linchpin for maintaining the momentum of Vietnam-Japan economic relations. For this reason, the growing attractiveness of Vietnam for Japanese firms is a positive signal for flourishing economic ties between two countries.

It is also noteworthy that Vietnam and Japan have enjoyed a strong economic partnership for a long time. Japan is one of the largest foreign investors in Vietnam. In 2019, Japan was the third-biggest investor in Vietnam, after Singapore and Thailand. In July this year, the Japanese government subsidized 15 companies to move their factories to Vietnam, paving the way for a new wave of Japanese investment.

Internally, Japan has a strong strategic incentive to increase its economic activities with Vietnam. Japan and China have been competing for economic leadership in Southeast Asia a long time. However, compared with China, Japan’s economic influence in Southeast Asian countries is weaker, as outlined by Kei Koga of the S Rajaratnam School of International Studies, Nanyang Technological University, Singapore.

China is still the largest economic partner with ASEAN countries, making it the most economically influential actor in the region. Hence strengthening economic ties with ASEAN countries will be critical for Japan in the long-term future.

Currently, the decoupling of major economies from China creates a conducive condition for Japan to expand its economic influence in Southeast Asia, including by investing in infrastructure, a realm in which Japan has an advantage over China.

Thanks to its location at the gateway of Southeast Asia, Vietnam is a top priority of Japanese infrastructure investment. In recent years, China’s infrastructure projects in Vietnam, most notably the Cat Linh-Ha Dong railway, have been notorious for ballooning costs, low technology or environmental consequences. These have created a more favorable environment for Japan to compete with China in the infrastructure area.

Indeed, Japan has surpassed China in infrastructure investment in Vietnam, with total value of US$208 billion compared with China’s $69 billion. Given this, Japan under Abe’s successor will likely continue investing in infrastructure projects in Vietnam.

With such a strong background, Vietnam’s and Japan’s extensive strategic partnership will still thrive in the future, in spite of Abe stepping down from power.

There will likely be some minor adjustments in Japanese foreign policy when the new prime minister takes office. Nonetheless, they should not have significant impacts on the relations between Hanoi and Tokyo, and Abe’s legacy will be a big head start for continuing Vietnam-Japan strategic ties.

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Phuong Pham

Phuong Pham is a graduate student at the School of Politics and International Relations, Queen Mary University of London. His articles have appeared in The Diplomat, East Asia Forum, Policy Forum, Global-is-Asian, Geopolitical Monitor and The Geopolitics.