Japan and Vietnam strengthen ties

Japan and Vietnam strengthen ties

Following a shady past, involving Japanese imperialist expansion and controversial ties with the United States, it seems that Japan-Vietnam relations have experienced an observable improvement, especially within the past couple of years. The implications of such close interaction are important, particularly when considering the region’s economic, political and security structure.

Economic ties between the two nations have been on the rise for some time. With Japan suffering from a sluggish economy for many years, Vietnam’s high growth rate, coming second only to China’s since 2000, is an appealing market for Japan. Japanese firms have invested heavily, and the Vietnamese economy has modernized as a result. Furthermore, Japan was the first state to officially recognize Vietnam as a market-based economy in 2011, which has helped to signal to other states that Vietnam’s economy is healthy and legitimate.

Japan is also the largest donor of official development aid (ODA) to Vietnam, having committed nearly $2 billion in 2012 alone. This has allowed Japan to enjoy a slight influence in some of Vietnam’s policies, pushing it (albeit very weakly) to adhere to Japan’s values of human rights and transparency. Additionally, on 2 July 2013, Japan and Vietnam entered a ‘Joint Crediting Mechanism’ – a bilateral, low-carbon growth pact that allows Japanese firms to earn carbon credits, while helping Vietnam lower its own carbon emissions. With the difficulties in global environmental governance, the success of such endeavors may be an example for other states to mimic and will improve both Japan’s and Vietnam’s reputations for sustainable development.

What is more, Vietnam is currently seen as an important future source of rare earth minerals, which are a critical component for many of Japan’s high-tech exports. By turning towards Vietnam, Japan may successfully sidestep some of the pressure from China, which in the past has used its strong hold over the rare earth minerals production market as a bargaining chip in bilateral relations. As a result, Vietnam would also enjoy a lift in its own exports.

Importantly, Japan’s interest in Vietnam is undeniably tied to its overall attempt to boost ties with other member states of the Associations of South East Asian Nations (ASEAN). Although Japan has traditionally enjoyed stability in trade with most of the 10 member states, this has recently been challenged by China’s remarkable growth and need to expand. Most concerning was when China signed a Free Trade Agreement with ASEAN in 2010, diminishing Japan’s role as a regional actor and therefore making ASEAN a top priority for Japanese foreign and economic policy.

Likewise, the two countries’ political ties have also developed strongly in recent years. For example, the new Japanese government (led by Prime Minister Shinzo Abe) has made diplomatic efforts to make Vietnam feel more special. After stepping into office last December, Abe chose Hanoi as his first official destination to visit, engaging in constructive discussions on a number of issues with his Vietnamese counterpart, Nguyen Dan Tung. In turn, Vietnam has vowed to stand with Japan over the question of North Korean abductions of Japanese civilians – an important topic in Japanese policy on the Korean peninsula.

Perhaps most crucially, Japan and Vietnam are both in the midst of a maritime dispute with China. The overlapping claims to the Senkaku/Diaoyu islands in the East China Sea saw another rise in tensions just the other week when Chinese ships stayed for a record 28 hours within Japanese-controlled waters. At the same time, the lesser-known dispute between Vietnam and China over large areas in the South China Sea has remained prominent, including an incident involving a Vietnamese fishing boat and a Chinese vessel in May.

As a result, this month’s meetings concerning security cooperation between Japan and Vietnam should come as no surprise. An important element here is that Vietnam may have some influence over the way ASEAN will act in the future on territorial disputes. Along with calls from the Philippines for a multilateral and legal approach to solving the disputes, further backing from Japan and Vietnam means the position of China becomes all the weaker. This is especially true in forums such as ASEAN+3, which involve ASEAN as well as China and Japan.

In total, Japan and Vietnam seem to benefit from a symbiotic relationship that serves many top economic and political interests of both states. But not only does this mean a stronger Vietnamese economy and support for Shinzo Abe’s economic goals, it will also ameliorate an overall relationship between Japan and ASEAN. In fact, it may even ease the advancement for wider regional ambitions, such as the Trans-Pacific Partnership.

Moreover, developments in the Japan-Vietnam relationship, coupled with Japan wooing other members of ASEAN, will increase the pressure on China as it faces more coordinated challenges to some of its policies. Japan will benefit from cultivating a more collaborative image at a time when it is partaking in the most comprehensive military reforms since WWII.

Japan’s policies towards Vietnam become a key element in its overall regional ambitions, many of which Vietnam is pleased to see become reality. As such, it is highly likely that similar efforts will continue in the foreseeable future, though interference from China – whether economic, diplomatic or aggressive – is also to be expected.


Categories: Asia Pacific, Economics

About Author

Karl Sorri

Karl has gained global experience working at the Transparency International Secretariat in Berlin, the Political/Economic Section of the U.S. Embassy in Helsinki, and as a freelance journalist. Karl holds an MA in Politics from the University of Glasgow and an MSc in International Relations from the London School of Economics.