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The question facing Vietnam’s PM on his first China visit: how close to get to Beijing

Vietnam’s Prime Minister Nguyen Xuan Phuc on Saturday starts his first visit to China since taking office in April, a trip aimed at mending ties frayed by the South China Sea dispute.

Diplomatic observers say Phuc’s six-day trip, which comes on the heels of a similar visit by Vietnam’s defence minister Ngo Xuan Lich last week, shows the communist neighbours are slowly rebuilding trust despite simmering tensions over the maritime row.

Apart from meeting his Chinese counterpart Li Keqiang and other leaders in Beijing, Phuc is scheduled to attend a trade and investment summit involving China and the Association of Southeast Asian Nations in Nanning, Guangxi.

How Vietnam has kept China at bay over thousands of years

While Beijing wants to use the visit to take measure of Phuc’s new government, leaders in Hanoi are keen to maintain constructive relations with Beijing, even amid differences on the contested waters, according to Phuong Nguyen, an expert from the Washington-based Centre for Strategic and International Studies.

Professor Carl Thayer, of the University of New South Wales in Australia, said the current leadership of Vietnam, a key rival claimant to the waters, had sought to isolate the dispute from its broader relationship with China.

“China and Vietnam will reaffirm their comprehensive strategic cooperative partnership with a special stress on economic ties – trade and investment – and bilateral consultations on the South China Sea under the agreed basic principles guiding the settlement of maritime disputes,” Thayer said.

Resolving Vietnam’s massive trade deficit with China is also expected to be high on Phuc’s agenda.

According to the Vietnam Chamber of Commerce and Industry, bilateral trade hit US$32.3 billion in the first six months of the year, up nearly 2 per cent year on year.

Of the total, Vietnam spent US$23.2 billion on imports from China, down 3 per cent year on year, and earned US$9.1 billion in exports to its largest trading partner, up 13.7 per cent from a year earlier.

“This cannot be resolved in the short term, but Vietnam is pressing China for greater access to its domestic market and better conditions for Vietnamese investment in China,” Thayer said.

Analysts noted bilateral ties had yet to fully recover from the diplomatic stand-off in 2014 over a Chinese deep-water oil rig deployed in the disputed waters.

“The oil rig crisis in 2014 severely damaged strategic trust between the two sides, and it’s difficult to go back to the way things were. But over the past year, Beijing and Hanoi have rebuilt high-level communication and stepped up confidence-building measures,” Nguyen said.

The two nations clashed over the Paracel Islands in the 1970s and fought a brief but bloody war over border disputes in 1979.

“The bilateral relationship has stabilised, but Hanoi is now on constant alert because of what it perceives as uncertainty surrounding future Chinese actions in the sea. Besides the South China Sea, Hanoi also feels pressured by expanding Chinese political and economic influence in its two other immediate neighbours, Laos and Cambodia,” Nguyen said.

Joshua Kurlantzick, from the US-based Council on Foreign Relations, noted the international arbitration ruling on the maritime dispute, which denied China’s expansive claims, had cast fresh uncertainty over ties.

“Vietnam basically supported [the ruling], but the new Philippine president has not embraced the tribunal’s decision as much as his predecessor would, so I think that leaves Vietnam a little out in the open,” he said.

Beijing was certainly worried by Hanoi’s growing defence ties with Tokyo and New Delhi and the fact that Vietnam was now one of the biggest arms buyers in the world, Kulantzick said.

During his visit to Hanoi last week en route to the G20 Summit in Hangzhou, Indian Prime Minister Narendra Modi offered to provide a US$500 million loan for defence cooperation.

Analysts said the Vietnamese government was under domestic pressure to stand up to Beijing amid growing anti-Chinese sentiment at home.

“Since the 12th national party congress in January, Vietnam has become more forthright in stating its position even when it is at odds with China,” Thayer said.

Although China was Vietnam’s most important bilateral partner due to their common land and maritime border and close trade relationship, Vietnam did not want to be drawn into the orbit of any major power, Thayer said.

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“At the same time Vietnam wants all major powers to have equities in Vietnam and to remain engaged to balance other major powers,” he said. In a diplomatic balancing act to counter China, Phuc has already made trips to Russia and Japan.

Pushing back against China had formed the core of Vietnam’s national identity, Nguyen said.

“It takes enmeshing the US, Japan, India, and Russia in order for Vietnam to keep Chinese influence at bay,” she said. “Hanoi will continue to place emphasis on historical links between the two communist parties and show deference to Beijing, while keeping it on its toes by engaging increasingly with the West and rising Asian powers.”