As South China Sea stakes ratchet ever higher, Vietnam seeks out calmer waters

Hanoi stockbroker Mai Xuan Huu is a member of Vietnam’s upwardly mobile middle class, whose fortunes are tightly bound to the country’s political stability – and economic growth that’s been averaging a brisk 4.5 per cent annually.

But the 33-year-old now harbours concerns for his homeland, which has benefited in recent years from companies relocating their supply chains outside China to skirt US tariffs arising from the pair’s damaging trade war.

A leadership transition in Hanoi, marked by an unprecedented blizzard of corruption allegations within the ruling Communist Party, briefly stirred concerns over the very continuity that has fuelled Vietnam’s rise. Looming over this uncertainty is the combustible South China Sea, where Beijing’s sweeping claims butt up against those of Hanoi, the Philippines and Malaysia – among others.

“I am very concerned that these aggressive Chinese acts could escalate into conflict, especially when Vietnam has just lost a talented party chief,” Huu said. “I hope the Vietnamese government will always make the right decisions to live peacefully with other countries and still protect our sovereignty.”

But Huu need not fret too much – at least for now. Vietnam, analysts note, wields a potent diplomatic tool to avoid escalation: its “bamboo diplomacy”. This approach of careful neutrality is expected to continue under the nation’s new General Secretary To Lam, who used his first trip abroad since taking power in July to visit China and reinforce ties with Hanoi’s largest trading partner and the region’s dominant economic, military and political force.

“The fact that you have come to China on your first visit … reflects the great importance you attach to relations between the two parties and countries,” Xi Jinping told his Vietnamese counterpart in Beijing, according to comments carried by Chinese state media on Monday – adding that he looked forward to establishing a “good working relationship and personal friendship” with Lam.