ISSN 2330-717X

Sending Message To China, Vietnam Further Strengthens Ties With Japan – Analysis

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By Vindu Mai Chotani*

Vietnam Communist Party Secretary Nguyen Phu Trong paid a four-day official visit to Japan from September 15. He held official talks with Japanese Prime Minister Shizo Abe and met the Emperor of Japan. He also met various eminent members of Japan’s political, economic and social circles.

The visit came at a time when Japan is looking to boost its economic relations with ASEAN and SAARC countries, and also further its aim of being a “proactive contributor to peace” in the Asia Pacific region. For Vietnam, this move is set to bolster its foreign policy which is aimed at strengthening its strategic partnership with major powers, particularly the US and Japan while hedging against China.

As the world witnesses a diffusion of power, and the US implements its rebalance strategy, the Asia-Pacific region has been and is still struggling to adopt a security architecture that would ensure peace and stability within the region. China’s assertive behaviour in the East China Sea has been alarming for Japan and the US. The Japanese government has thus taken it upon itself to expand its relations, forge partnerships and invest in countries in the region, like Bangladesh, Myanmar and Sri Lanka.

Though both Vietnam and China are communist nations, and share deep economic ties, relations between these nations have been severely hampered by their territorial dispute in the South China Sea.Both nations are currently contesting sovereignty issues in the Spratly and Paracel islands. Further, this region has also witnessed a surge in economic growth, with much trade passing through the Sea Lines of Communication (SLOC). It is in the interest of both Japan and Vietnam to prevent this region from becoming a strategic flashpoint. In such a scenario it does seem natural that both Japan and Vietnam would aim to bolster ties with each other.

The pattern of Vietnamese-Japanese relations reflects a significant convergence of national interests between the two countries. Vietnam sees Japan as a reliable source of capital, technology and security. Japan, seeking to diversify its investments beyond China, looks at Vietnam from an economic and political lens. With a population of 90 million people, Vietnam is a big market for Japanese goods and products. Cheap labour costs, as well skilled workers further encourage Japanese investments.

Over the years, Japan-Vietnam relations have grown in strength. In 2007, Japan and Vietnam agreed to establish a Joint Cooperation Committee. Four years later, in 2011, Japan and Vietnam adopted a Plan of Action to implement the strategic partnership. After returning to office in 2012, Prime Minister Abe made his first official overseas trip to Vietnam in 2013. While in Hanoi, Abe also announced the provision of $500 million in loans to Vietnam on the 40th anniversary of Japan-Vietnam diplomatic relations. However, the major turning point in bilateral relations took place in March 2014, when Abe and Vietnam President Truong Tan Sang during his state visit to Tokyo elevated their eight-year old strategic partnership to an Extensive Strategic Partnership.

Besides cooperation in bilateral issues, Japan and Vietnam through the “New Tokyo Strategy 2015 for Mekong-Japan Cooperation” will continue to engage with each other, as well as other Mekong region nations (Myanmar, Laos, Thailand, Burma, Cambodia).Further, both nations are in the final stage of the Trans Pacific Partnership (TPP) negotiations – the free trade agreement, which currently includes 12 countries representing 40 percent of global GDP. This is expected to deepen trade and investment between the two countries at a much faster pace once finalized.

From the joint statement released following Trong’s visit to Japan, it can be seen that progress has once again been made in defence and security relations, as well as economic relations.

Defence Cooperation

Following Abe’s pledge last year to provide Hanoi with six second hand ships that could be used as patrol vessels, Abe and Trong this year have agreed that Japan will provide more used vessels to shore up Vietnam’s maritime law enforcement capabilities to counter China’s increasing power in the South China Sea. Further, Abe also said Tokyo will extend about ¥100 billion in loans to Vietnam to help build new infrastructure such as ports and expressways.

The two sides also shared the intention to enhance cooperation in maritime security, search and rescue, non traditional security issues such as cyber security, cybercrime, terrorism, piracy etc. The two sides signed a Memorandum on Cooperation between Coast Guard Agencies. Further, Japan also affirmed its continued assistance to help Vietnam enhance its capacity of maritime law enforcement agencies, and participate in UN peacekeeping operations. The defence authorities of both countries signed the Memorandum of Cooperation on UN Peacekeeping operation.

Economic Cooperation

As of January 2015, Japan is Vietnam’s fourth largest trade partner after China and is also the second biggest investor in Vietnam, with total registered capital of around $37 billion dollars.Japan is also the largest ODA donor. As of 2012, the cumulative ODA fund from Japan had reached $22.7 billion.

The two nations agreed to establish a Joint Committee on Cooperation in Industry, Trade and Energy, which is aimed at strengthening cooperation in the fields of industry, trade and energy between the public and private sectors of both countries. Both governments also agreed to promote comprehensive cooperation in agriculture, forestry and fishery in the spirit of “Japan – Vietnam Medium long term Vision on Agricultural Cooperation.”

The joint statement also noted other economic initiatives, such as those in the field of energy development, electronics industry, information and communications technology, and development of manufacturing engineering. Japan has offered 286 million yen in official development assistance to help Vietnam build new general hospitals in Ho Chi Minh City.

Besides economic and defence cooperation, it is in the interest of both nations to raise the effectiveness of cooperation in education and training, culture, tourism, labour, climate, and people-to-people exchange.As maritime nations, Japan and Vietnam can also further enhance collaboration to maintain peace and stability at sea.

*Vindu Mai Chotani is a Research Assistant at Observer Research Foundation, Delhi

Observer Research Foundation

Observer Research Foundation

ORF was established on 5 September 1990 as a private, not for profit, ’think tank’ to influence public policy formulation. The Foundation brought together, for the first time, leading Indian economists and policymakers to present An Agenda for Economic Reforms in India. The idea was to help develop a consensus in favour of economic reforms.

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