Vietnam upgrades US to highest diplomatic status as hedge against China

WASHINGTON: US President Joe Biden arrived in Hanoi in Vietnam after a successful stint at the G20 summit in New Delhi and secured deals with the South East Asian on semiconductors and minerals strengthening its global supply chains to bypass China.

Vietnam surprised Biden on arrival by elevating the US to the highest diplomatic status as a hedge against China putting it on par with Russia and China representing a personal victory for the US President who has been pushing for this higher status as he views Vietnam as an important ally.

The uprade also helps India which is part of the Quad -- US, Australia, India and Japan -- which is restraining China's hegemony in the South China Sea. India has a lot of investments in Vietnam through its state-run ONGC which is exploring for oil under a contract sharing agreement for exports of crude oil.

The US views Vietnam, with which it fought a losing war for decades in an effort to eradicate communism from the Ho Chi Minh ruled North Vietnam, had been pushing for the upgrade for the last several months as it sees the united Vietnam (North and South) as a manufacturing hub to secure global supply chains against the risks it runs with China in the recent context of a Sino-US cold war.

Jon Finer, the US principal Deputy National Security Adviser, said the upgrade will encompass security aspects.

He was speaking to the US media on Air Force one as the US President Joe Biden departed from Delhi after attending the G20 summit meeting in Delhi.

Though he did not achieve his primary goal on describing Russia's war with Ukraine and sought funding for Ukraine, he was overall happy with the final wording that said War in Ukraine instead of War on Ukraine and used the words no country should be permitted to use force (military) in an aggression to seizer territories from another sovereign country.

Almost 50 years after a protracted and brutal cold war era conflict in which America lost a lot of its youth in the prime in a war considered "no business of ours" by the American people, Biden was received at the Hanoi airport to an official ceremony by the ruling Communist Party replete with school children waving American flags and honor guards carrying bayoneted rifles, the CNBC reported.

Noting the strides Vietnam had taken after the war devastated the country before its unification, Biden said: "We can trace a 50-year arc of progress between our nations, from conflict to normalization, to this new elevated status."

Political analysts say that Vietnam is hard put to thaw relations between Washington and Beijing as it tries to get its foothold in the fierce international economic competition, media reports said.

Top Chinese officials, including President Xi Jinping, are expected to visit Vietnam in the coming days or weeks, diplomatic sources indicated saying, Hanoi wants to maintain good relations with all super powers.

The visits will come as Vietnam's history of a long relationship with Russia is tested in the face of the war in Ukraine.

Vietnam is in talks with Russia over a new arms supply deal which it fears could trigger US sanctions.

CNBC quoting agency reports said that a Vietnamese military officer confirmed the Vietnam as negotiating a new $8 billion credit facility to buy heavy weaponry from Russia.

Vietnam's Foreign Ministry was silent, CNBC said, on initiatives by Moscow getting aggressive for a loan deal to short circuit Western sanctions on Moscow.

Hanoi is also reportedly having parallel talks with several arms suppliers including the US.

Finer said there was no arms deal in the offing to announce right now but emphasised that the US and its allies could help Vietnam to diversify its arms supplies instead of being solely dependent on Russia.

He claimed Vietnam was receptive to this idea and claimed it would substantially reduce Vietnam’s reliance on Moscow. US are not very comfortable with Vietnam’s relations with Russia.

A US- Vietnam agreement on sourcing rare earths could be in the offing to boost supply chains of critical minerals as Vietnam has the world's largest deposits after China.

The US is also concerned with the Human rights issues in Hanoi as activists have been jailed which has limited freedom of expression, a bone of contention between Hanoi and the US.

Vietnam may show a goodwill gesture towards diplomatic overtures for freeing the jailed activists.