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Vietnam-Sino Relations Dan Lemon

Vietnam-Sino Relations Dan Lemon. Vietnam – Sino Relations 2 Overview China Rise on World Stage –Political, Economic, and Military 20 th Century—Vietnam

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Page 1: Vietnam-Sino Relations Dan Lemon. Vietnam – Sino Relations 2 Overview China Rise on World Stage –Political, Economic, and Military 20 th Century—Vietnam

Vietnam-Sino Relations

Dan Lemon

Page 2: Vietnam-Sino Relations Dan Lemon. Vietnam – Sino Relations 2 Overview China Rise on World Stage –Political, Economic, and Military 20 th Century—Vietnam

Vietnam – Sino Relations 2

Overview• China Rise on World Stage

– Political, Economic, and Military

• 20th Century—Vietnam fought wars with 3 of 5 Permanent Members of United Nations Security Council

• Question: What is Vietnam’s Foreign Policy with respect to China’s rise?• History

– Over 2,000 year history – Chinese “ruled” Vietnam for over 1,000 years– Vietnam independence tenth Century– Fluctuates; eras of peace to conflict w/China

• Vietnam’s Economic Strategy 1970s to 2000

Page 3: Vietnam-Sino Relations Dan Lemon. Vietnam – Sino Relations 2 Overview China Rise on World Stage –Political, Economic, and Military 20 th Century—Vietnam

Vietnam – Sino Relations 3

Vietnam Economy 1970s

• Relied on the People’s Republic of China for economic aid– Weapons, infrastructure support & humanitarian assistance

– 1976 Launched Five Year Plan, China provided $1.3 billion

– Sino-Vietnam split over territorial disputes/Cambodia Issue

• Vietnam leans toward Soviet Union and Eastern Block– $800 million in aid, adopted centrally planned economy

– Imported steel, oil, cotton, and fertilizer

• Economic Crises at the end of 1979– Five Year Plan launched in 1976 goal was 14% Growth only .4%

– Wide-Spread Famine even though gov’t imported thousands of tons of food

Page 4: Vietnam-Sino Relations Dan Lemon. Vietnam – Sino Relations 2 Overview China Rise on World Stage –Political, Economic, and Military 20 th Century—Vietnam

Vietnam – Sino Relations 4

Vietnam Economy 1980s

• Dependent of Soviet Union– Over $2.5 billion– Infrastructure Development, Oil and Coal for electricity– State Owned Enterprises produce less 1980 - 1986

• Mid 1980s– Garrison Force in Cambodia and Troops Station in North

Vietnam due to border tensions w/China drains resources– Inflation in triple digits…700%, Unemployment 20%– Economic aid 38% of state revenue—Soviet Union signs of

retrenchment diminish economic aid• 1986 Doi Moi (Renovation Launched)

– Transition to market economy…took notice of Asian Tigers– At the time internationally isolated, “Pariah” State– Integrate with world economy, access to capital and markets

Page 5: Vietnam-Sino Relations Dan Lemon. Vietnam – Sino Relations 2 Overview China Rise on World Stage –Political, Economic, and Military 20 th Century—Vietnam

Vietnam – Sino Relations 5

Vietnam-Sino Economic Relations 1990s

• Re-established Diplomatic ties w/Beijing– Adopt “Signal Left, but Turn Right” economic concept– Trade w/China increases throughout 1990s– $32 million in 1991 to $1.25 billion in 1999

• Problems: Chinese products saturate Vietnam markets– China’s low cost products effects Vietnam’s infantile industries – Trade embargo/smuggling

• Leads to a trade Imbalance of 4.7 to 1 (favor of China)– “Economic Colonialism”– Vietnam (similar to most ASEAN) exports primary products to

China and imports manufactured goods– Need to diversify, too dependent on China

Page 6: Vietnam-Sino Relations Dan Lemon. Vietnam – Sino Relations 2 Overview China Rise on World Stage –Political, Economic, and Military 20 th Century—Vietnam

Vietnam – Sino Relations 6

Foreign Policy Relations 1990s (con’t)

• Hanoi: What to do with Beijing’s Economic Clout?

• Omni directional foreign policy, economically motivated– Tie itself into regional and global institutions to improve its

economy

– ASEAN membership, relations with U.S. and European Union

– U.S. drops trade embargo (in place since 1964), Vietnam access to IMF and World Bank

– Trade with ASEAN and East Asia

• Adopt Laws to attract Foreign Direct Investment (1987)– 1991, FDI from ASEAN $173 M

– 1994, FDI from ASEAN $1.4 B

Page 7: Vietnam-Sino Relations Dan Lemon. Vietnam – Sino Relations 2 Overview China Rise on World Stage –Political, Economic, and Military 20 th Century—Vietnam

Vietnam – Sino Relations 7

Vietnam Economic Diversification

Page 8: Vietnam-Sino Relations Dan Lemon. Vietnam – Sino Relations 2 Overview China Rise on World Stage –Political, Economic, and Military 20 th Century—Vietnam

Vietnam – Sino Relations 8

Vietnam Economic Diversification

Page 9: Vietnam-Sino Relations Dan Lemon. Vietnam – Sino Relations 2 Overview China Rise on World Stage –Political, Economic, and Military 20 th Century—Vietnam

Vietnam – Sino Relations 9

Vietnam FDI by Region

Source: World Bank, Vietnam Business Development Report 2006

Page 10: Vietnam-Sino Relations Dan Lemon. Vietnam – Sino Relations 2 Overview China Rise on World Stage –Political, Economic, and Military 20 th Century—Vietnam

Vietnam – Sino Relations 10

Vietnam Economic Diversification

Page 11: Vietnam-Sino Relations Dan Lemon. Vietnam – Sino Relations 2 Overview China Rise on World Stage –Political, Economic, and Military 20 th Century—Vietnam

Vietnam – Sino Relations 11

Vietnam Economic Diversification

Page 12: Vietnam-Sino Relations Dan Lemon. Vietnam – Sino Relations 2 Overview China Rise on World Stage –Political, Economic, and Military 20 th Century—Vietnam

Vietnam – Sino Relations 12

Vietnam Economic Diversification

Export Markets (2004) Import Markets (2004)

Rank Country/territory Amount Country/territory Amount

1 United States 4,992.3 China 4,456.5

2 Japan 3,502.4 Taiwan 3,698.0

3 China 2,735.5 Singapore 3,618.5

4 Australia 1,821.7 Japan 3,552.6

5 Singapore 1,370.0 Korea 3,328.4

6 Germany 1,066.2 Thailand 1,858.1

7 Britain 1,011.4 Malaysia 1,214.7

8 Taiwan 905.9 United States 1,127.4

9 Korea 603.5 Hong Kong 1,074.7

10 Malaysia 601.1 Germany 694.3

11 Holland 581.8 Russia 671.2

12 France 557.0 Indonesia 662.7

13 Philippines 498.6 Switzerland 661.9

14 Thailand 491.0 France 617.0

15 Indonesia 446.6 India 593.5

Page 13: Vietnam-Sino Relations Dan Lemon. Vietnam – Sino Relations 2 Overview China Rise on World Stage –Political, Economic, and Military 20 th Century—Vietnam

Vietnam – Sino Relations 13

Vietnam Economic Diversification

Export Market Structure 2004

7.00%

22%

20.40%

49.40%

1.60%

Asia Africa Oceania America Europe

Page 14: Vietnam-Sino Relations Dan Lemon. Vietnam – Sino Relations 2 Overview China Rise on World Stage –Political, Economic, and Military 20 th Century—Vietnam

Vietnam – Sino Relations 14

Vietnam Economic Future Outlook

• Alternative to China– Cheaper wages…– Japan FDI to Vietnam due to tensions w/China

• R&D for software and Outsourcing– Japan, Europe and U.S.– Panasonic, Cannon, and Intel

Page 15: Vietnam-Sino Relations Dan Lemon. Vietnam – Sino Relations 2 Overview China Rise on World Stage –Political, Economic, and Military 20 th Century—Vietnam

Vietnam – Sino Relations 15

Conclusion

• Vietnam Multi-Lateral Approach to Foreign Policy is working

• Economic engagement with regional and external powers strengthens its position vis a vis China

• GDP Growth since 1990…8%• Per Capital from $68.00 (1990) to $627 (2005)• Problems: Corruption and Environmental• Remains a poor country