Thayer Consultancy Background Brief:

ABN # 65 648 097 123

Implications of Australia-
Vietnam Strategic Partnership
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August 24, 2023

We are preparing a report regarding the diplomatic dynamics between Vietnam and
the United States as well as Australia.
During a visit to Vietnam in June 2023, the Australian Prime Minister stated he wanted
to enhance relations with Vietnam.
Recently, on the morning of August 22, Foreign Minister Bui Thanh Son and his
Australian counterpart Penny Wong met and agreed that they would focus on
implementing the intention to upgrade the two countries' relations to a strategic
partnership.
We request your assessment of:
Q1. Given the recent diplomatic interactions, what is your assessment of the likelihood
of an impending upgrade in Vietnam’s relations with Australia?
ANSWER: Australia and Vietnam are certain to reach agreement on raising bilateral
relations from a strategic to a comprehensive strategic partnership this year. Leaders
on both sides have reached consensus on this. It is likely Foreign Minister Penny
Wong’s current visit is completing the finishing touches.
Q2. Vietnam is actively considering strengthening its bonds with both the United
States and Australia, both are members of AUKUS. In your assessment, does this
indicate a strategic message is being conveyed to China?
ANSWER: Vietnam’s upgrading of its bilateral relations has more to do with shifting
geopolitical alignments and polarization of the international system than with just
China,
Vietnam has a range of thirty partnerships – four comprehensive strategic partners,
thirteen strategic partners and thirteen comprehensive partners. Vietnam’s policy of
“diversification and multilateralization” of relations enables it to leverage off
differences among the major powers in order to retain its strategic autonomy. In other
words, Vietnam prefers a dynamic equilibrium in its external relations.
Vietnam’s room for manoeuvre is narrowing with the polarization of the international
system. Russia is being weakened by the war in Ukraine, western sanctions and
dependency on China. China is gaining in strength due to its military modernizations
and its ‘partnership without limits’ with Russia. India has joined the Quad and is
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engaging more in defence cooperation with the United States. Japan has shifted to a
more assertive foreign policy and aligned itself more closely with the United States.
Australia is the centre-piece of the AUKUS partnership.
Vietnam’s ability to leverage off the rivalry among the major powers is not only
diminishing, but the slowing of the global economy coupled with China’s economic
difficulties is reducing the resources Vietnam has available for external affairs.
In these circumstances, Vietnam needs to expand its economic engagement with the
United States and its allies and partners to access new technologies to boost its
economy. Last year Vietnam elevated South Korea to a comprehensive strategic
partner along with Russia, India and China. Australia is poised to join this top tier
group. U.S. relations appear on track to be elevated to a strategic partnership.
In sum, because a weakened Russia is dependent on China, and India, Japan and
Australia have moved closer to the United States, Vietnam is readjusting its position
to leverage off these new relationships. Vietnam aims to reinforce its strategic
autonomy without aligning against China.
Q3. If Vietnam simultaneously enhances its relations with the U.S. and Australia how
will China react?
ANSWER: China will have to reassess current realignments and decide what
adjustments it must make to its current foreign policy to prevent an erosion of Chinese
influence in the region in response to the Quad, AUKUS, and the recent trilateral
partnership among the United States, Japan and South Korea. At the same time, China
will continue its military build-up and modernisation as a long-term goal.
China’s interests are not served by further polarization of the international system
because China needs access to the U.S. and European markets for economic growth.
China interests also are not served by stepping up intimidation and coercion against
claimant states in the South China Sea as that only provides an opening for the United
States to intervene. China is likely, however, to continue to employ grey zone
operations in response to specific events that challenge China’s claims to sovereignty.
With regard to Vietnam specifically, China has already warned Vietnam not to be taken
in by the United States. As long as Vietnam adheres to its policy of “four no’s” China
will act with restraint.
The “four no’s” include not joining any military alliances, siding with one country
against another, giving any other countries permission to set up military bases or use
its territory to carry out military activities against other countries, nor using force or
threatening to use force in international relations.”
China will respond to an upgrading in U.S.-Vietnam relations by stepping up high-level
political-diplomatic engagement with Vietnam. China will take steps to address
Vietnam’s concerns about market access and investment.
In sum, China’s approach to Vietnam will mirror Beijing’s current policy of trying to
improve relations with Australia and the Philippines.
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Suggested citation: Carlyle A. Thayer, “Implications of Australia-Vietnam Strategic

Partnership Upgrade,” Thayer Consultancy Background Brief, August 24, 2023. All
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Thayer Consultancy provides political analysis of current regional security issues and
other research support to selected clients. Thayer Consultancy was officially
registered as a small business in Australia in 2002.