China's rise stirs Vietnam's anxiety
By Anh Le Tran
If there was a need to identify a consensus among Vietnamese across the
spectrum from domestic to overseas, it must be the uneasy feeling towards
China. The Vietnamese mentality regarding national security from time
immemorial has been that of vigilance on China.
Although Vietnamese pride for fighting off foreign invasions always runs high,
the country’s history of 1,000-year Chinese domination is painful enough to be
a relentless reminder. And three current developments seem to reinforce it to a
significant extent.
First, over the past few months, the Vietnamese public outcry against Chinese
involvement in Vietnam's bauxite mining plan in the Central Highlands has been
dramatic. The list of accused Chinese elusive intentions is long, ranging from
exporting environmental degradation to compromising Vietnam's national
security. This phenomenon is unprecedented and shows an increasing contrast
between the Vietnamese populace and government towards Chinese investments.
A quick look at the way Chinese companies carry out their bigger projects in
Vietnam may provide a reasonable explanation for this sentiment. When
constructing huge electric, cement, chemical and mining plants in Vietnam,
instead of hiring locally, Chinese companies usually brought their own workers
with them.
Most of them are unskilled laborers, who currently cannot legally work in
Vietnam according to the country's labor regulations. Recent reports by popular
Vietnamese media have shown an influx of Chinese laborers into
Chinese-implemented projects, with some sites having in excess of 2,000 workers
each. From the Vietnamese public's perspective, this is both undesirable for
local employment and potentially difficult for public and national security.
Moreover, as pointed out by Vietnamese critics, the transfer of older and less
environmentally-friendly technologies from China to carry out many of those
projects does create a fear that Vietnam is becoming a dumping ground for
industrial waste. In this regard, the fact that Chinese companies have
increasingly won bids for big projects in key sectors across Vietnam cannot
help but reinforce that fear.
Second, Vietnam's overall economic relationship with China has produced certain
levels of stress on the Vietnamese economy. The country has faced a consistent
annual trade deficit with China since 2001. The number for 2008 was shockingly
high at more than US$11 billion, which is around 12% of Vietnam's gross
domestic product.
This huge trade deficit has not only put negative pressure on Vietnam's current
account balance but also placed competing Vietnamese businesses in hardship
since many of the Chinese imports could be produced domestically.
Currently, it does not take much effort to find out that ultra-cheap Chinese
goods are flooding the Vietnamese market nationwide. If this were to happen in
countries such as the US or India, one would see anti-dumping and
counterveiling investigations mushrooming left and right. But the Vietnamese
government, due to legal capacity and political reasons, has not ventured to
address the growing concern of its domestic business community.
In addition, problems stemming from the smuggling of Chinese goods, ranging
from poultry to toys, into Vietnam are also significant, imposing not only an
economic cost but also a health threat as the items are largely outside the
reach of the Vietnamese government. Although this is a long-standing problem,
Vietnamese media has recently rung an alarm bell on the potential massive
influx of smuggled goods as Chinese businesses try to rid themselves of
inventory buildup during the current economic slump.
Third, overlapping territorial claims over the Paracel and Spratly islands in
the South China Sea (referred to as the East Sea by Vietnam) have intensified.
The Vietnamese government tried to contain public outcry against Chinese
assertive claims over the islands in late 2007 and early 2008 in order to
prevent diplomatic tension between the two countries. However, in the face of
China's increasing assertiveness, the Vietnamese government now encourages the
public to research and understand historical and legal evidence to bolster its
territorial claims. This can be seen as a very assertive move by the government
of Vietnam since the country’s greatest strength lies in the will of its people
as manifested throughout the country's history.
In light of the dispute, China's military buildup in the South China Sea, such
as the reported secret nuclear submarine base on Hainan Island, has created
anxiety in many Vietnamese circles. In this regard, Vietnam's recently reported
deal to buy six submarines amounting to US$1.8 billion from Russia may be
viewed as a reaction to the Chinese development. However, given its limited
economic resources, Vietnam certainly does not want to engage in any potential
arms race with China. But at the same time it cannot simply sit still and watch
China continue to make bold military moves in the sea.
But there is still hope for Vietnam to address these issues in the direction of
mutual benefits and regional stability. First and foremost, the concerns of the
Vietnamese public cannot be underestimated and should be taken into account. In
this respect, regardless of being approved by the Vietnamese government,
Chinese companies investing in Vietnam should be acutely aware of the
environmental and political impacts of their projects and faithfully address
them in accordance with accepted international business standards and norms. It
is in their long-term interest to earn the goodwill of the Vietnamese people by
being responsible foreign investors. In this regard, Japanese foreign direct
investment in Vietnam can be a good example for them to follow.
In addition, the Chinese model of sending workers to work on its projects is
politically unsound and has the potential to spark unnecessary resentment that
will further complicate bilateral diplomatic relations. Stopping this practice
would be a good first step to reverse the negative sentiments of the Vietnamese
populace.
In the larger context of economic relations, the trade balance and the problem
of smuggling must be addressed to reduce stress on the Vietnamese economy.
Trade is a very important diplomatic tool to promote meaningful friendship and
peace; and China is in position to do that if it is true to its “peaceful rise”
claims. Of the three individual powers - China, Japan, and the US - that
Vietnam considers most important in its foreign policy approach, it enjoys
significant trade surpluses with the latter two. China can show significant
diplomatic goodwill towards the ordinary Vietnamese people if it joins America
and Japan in this regard.
With respect to the thorniest issue, any solution to the territorial dispute in
the sea should be reached in a transparent manner and in accordance with
accepted international principles. How China approaches this problem will be
the utmost test of its adopted “peaceful development” stance. Meanwhile, there
must not be any use of deadly force (on any side) against ordinary fishermen in
the disputed area. They are defenseless and must be treated as such.
At any rate, some may argue that it is wishful thinking to suggest the above
approaches to the three current developments identified. But it is hard to see
how beneficial bilateral relations and stability would be fostered if they were
to be ignored. As a rising power on the world stage with potential economic and
political influences throughout the continents, China has every interest to
materially show the world that its rise is indeed peaceful. It can do that by
showing first its sincerely good gestures towards Vietnam.
Although being on vigilance as usual, the Vietnamese are astute enough to
embrace those gestures for the sake of peace and economic development while
continuing to reinforce their hard-earned national identity.
Anh Le Tran is a professor at Lasell College (the United States), where
he teaches economics and management.
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