China has long been a major source of influence on the evolution of Vietnam as a modern state. This is well illustrated by some researchers’ analogy that likens China to a rooster, with Korea as its beak and Vietnam its legs. The analogy, while highlighting the strategic importance of Vietnam towards China's well-being, especially in terms of security, also implies that Vietnam has long been living under the weight of China. In other words, Vietnam is condemned to a “tyranny of geography” (Thayer 2002, p. 271), whereby it has no choice but to learn to share its destiny with China through every twist and turn of its history.

Factors Shaping Vietnam–China Relations

Vietnam has been so much influenced by China that any account of the country's history would be incomplete without referring to its relations with the northern neighbour. Vietnam came under Chinese suzerainty for more than 1,000 years, since the Han dynasty conquered and annexed the country in 111 BC until Vietnam gained its formal independence for the first time in AD 938. Since then until the encroachment of the West in the latter half of the nineteenth century, despite intermittent attempts by China to reoccupy Vietnam, the relationship between the two countries was characterized by the relatively stable coexistence of the two empires with the latter being part of the former's tributary system (see, for example, Woodside 1971). After gaining its independence from colonial powers in 1945, Vietnam seemed to be in a better position to deal with China, but again, the northern neighbour continued to exert tremendous impact on the country, both before and after it was unified under communist control.

The history of interactions between the two countries shows that their relationship has been heavily conditioned by three major factors. The first is the geographical proximity between the two countries. Living next to China brings Vietnam both good and bad fortune. Vietnam, as one of the most sinicized countries in Asia, has benefited from China's immense cultural wealth, which more or less shaped the country's development as a nation-state.

Introduction

By the time Vietnam and China normalized their relations in 1991, official bilateral economic exchanges were virtually non-existent.1 After normalization, however, favourable domestic and international conditions encouraged bilateral economic exchanges to expand rapidly. In China, Deng Xiaoping's famous southern tour took place just a few months after bilateral normalization. Deng's tour reasserted China's economic reform and openness against the conservative backlash following the Tiananmen demonstrations, and encouraged China's further expansion of foreign economic exchanges. Meanwhile, in Vietnam, the country's increasing economic stability was also favourable for its promotion of international integration. Vietnam's weak production base, in particular, caused a scarcity of even the most basic consumer goods and led to high demand for imports from China (Beresford and Phong 2000, p. 132). Internationally, the demise of the Council for Mutual Economic Assistance (CMEA) necessitated Vietnam's expansion of economic exchanges with any country that could help compensate for its loss of trade with former CMEA member economies. As a result, China, along with other East Asian economies such as Japan and Taiwan, conveniently emerged as an important trade partner for Vietnam due to the geographical proximity between the two countries. At the same time, bilateral economic ties also benefited from the end of the Cold War which accelerated the process of globalization and facilitated the economic liberalization and international integration of most countries, including both Vietnam and China.

Deepened economic ties have therefore become an outstanding feature of Vietnam–China relations since their normalization. The deepening of economic relations has brought significant benefits to both countries. In 2013, for example, China was the largest source of imports for Vietnam, providing the country with 28 per cent of its total (General Department of Customs 2013c). Vietnam's exports to China have also increased steadily over the recent years, almost tripling from US$4.9 billion in 2009 to US$13.2 billion in 2013 (General Department of Customs 2013b). Vietnam is accordingly becoming an increasingly important export market for Chinese manufacturers, especially those from southern provinces. Meanwhile, imports of raw materials such as crude oil and coals from Vietnam also help fuel China's economic growth. Other aspects of bilateral economic ties, such as aid, project contracting, and investment, have also enjoyed different levels of development.

Introduction

Despite significant developments in bilateral relations since normalization, a number of problems still threaten to unsettle Vietnam's relations with China in the long term. The South China Sea1 disputes stand out as the single most challenging issue. Resurfacing since the 1970s, the disputes not only remain the most serious sticking point in bilateral relations but have even pitted the two countries against each other in deadly armed confrontation on a number of occasions as well. The management and resolution (if ever) of the disputes therefore bear significant implications for the future evolution of bilateral relations.

Since 1991, South China Sea disputes between Vietnam and China have witnessed both positive and negative developments. While the two countries successfully signed a treaty on the maritime delimitation of the Gulf of Tonkin in 2000,2 thereby removing part of the disputes, other disputes over the sovereignty of the Paracels and the Spratlys as well as maritime boundaries in the sea remain intractable. In recent years, as both countries step up their military modernization and China pursues more assertive measures in pressing its claims, the disputes tend to become even more intense and threaten to undo hitherto positive developments in other fields of the bilateral relations.

Contributing to the dynamics of the disputes is a wide range of drivers, in which geo-strategic and economic ones are the most important. While both geo-strategic and economic factors driving China's moves in the South China Sea have been extensively studied (see, for example, Buszynski 2012; Buszynski and Sazlan 2007; Fravel 2011; Garrison 2009; Leifer, 1995; Lo 1989; N.A. Owen and Schofield 2012; Storey 1999; Zhao 2008), they have not been equally examined on the part of Vietnam. So far, most of the studies on the dynamics of Vietnam's South China Sea disputes with China have focused on the geo-strategic aspect (see, for example, Butterfield 1996; Storey and Thayer 2001; Thayer 2011b; Tonnesson 2000), leaving the economic aspect largely under-examined. Specifically, there has been no major study that exclusively and comprehensively examines the role of economic factors in Vietnam's disputes with China. This gap in the literature makes it difficult to fully appreciate the dynamics of the disputes at a time when economic factors, following Vietnam's launch of economic reforms under Doi Moi, have been playing an increasingly important role in shaping the country's foreign policy in general and South China Sea strategy in particular.

Introduction

After Vietnam was reunified in 1975, the CPV enthusiastically embarked on a new project: transforming the country along the socialist path. There was a widespread sense of optimism among communist leaders that the war-torn country would soon recover and prosper through a socialist transformation. However, the new task turned out to be far more challenging than they had imagined. The country's economic performance in the first ten years after reunification shows that Vietnam “won a war but lost the peace” (Kolko 1995, p. 351), with economic failures causing the people's living standards to deteriorate dramatically after 1975. The situation got even worse after Vietnam was forced to engage in two costly armed conflicts, one against the Khmer Rouge and the other against China. Sustaining war efforts put excessive strains on the already war-torn economy and contributed to the outbreak of a socio-economic crisis in the mid-1980s, causing a sharp decline in the CPV's legitimacy. Against this backdrop, the CPV decided to adopt the Doi Moi (Renovation) policy at its sixth national congress in late 1986, with a view to reforming the national economy before the socio-economic crisis could threaten the regime's survival.

In order to implement Doi Moi, the CPV started to introduce within a short period of time a series of new policies, which included developing a multi-sector market-based economy, renovating the economic structure, stabilizing the socio-economic environment, promoting science and technology, and opening up the country's foreign relations. It should be noted that by 1986, hostile relations with China and Vietnam's engagement in the Cambodian conflict were still destabilizing Vietnam's immediate external environment, which was unfavourable for its economic development. Disengaging from the Cambodian quagmire and especially normalizing relations with China emerged as Vietnam's top foreign policy priorities.

Focusing on Vietnam's domestic–foreign policy nexus, the current chapter will look into the link between Vietnam's adoption of Doi Moi and transformations in its China policy in the late 1980s and early 1990s. The chapter argues that during this period, changes in Vietnam's foreign policy in general and its China policy in particular originated first and foremost from the CPV's domestic agenda of promoting economic reform and protecting the regime's survival. As the CPV considered hostile relations with China as detrimental to both its economic reform and regime security, it gave renewed emphasis to improving relations with China.

Introduction

Vietnam's relations with China reflect a typical pattern of interactions between asymmetrical powers, with the smaller and greater powers pursuing divergent, sometimes conflicting, interests. Each power employs different strategies to handle the relationship (see, for example, Thayer 2002; Womack 2006). As summarized in Chapter 2, Vietnam's longstanding objective vis-à-vis China has been to maintain its sovereignty, territorial integrity and political autonomy against the threat of Chinese expansionism, while taking advantage of cultural and trade opportunities for its own national development made possible by its geographical proximity to China. Since independence, Vietnam has pursued a two-pronged strategy to handle a preponderant China: on the one hand, Vietnam has shown its unwavering determination to stand up against any Chinese attempts to undermine its political autonomy or territorial integrity. On the other hand, Vietnam has also paid due deference to China as long as its own independence and autonomy were respected.

In short, Vietnam's approach towards China can be characterized as a calibrated mixture of deference and defiance. In recent decades, this approach has been reinforced by two contradictory tendencies that have shaped bilateral relations. While ideological affinity and growing economic interdependence have strengthened bilateral relations, Vietnam's entrenched awareness of the China threat — primarily due to China's increasing assertiveness in the South China Sea — has deepened its suspicion of Beijing's intentions and hence its efforts to counter any undue pressure from China.

Although living next to a powerful China is not a new experience for Vietnam, China's re-emergence as a proto-superpower in recent decades — especially in terms of its military strength and power projection capabilities — has necessarily renewed and intensified Vietnam's China challenge. Furthermore, unlike previous historical periods, bilateral relations after the Cold War have also been increasingly conditioned by the international and regional frameworks in which the bilateral relationship is situated. In particular, this is due to the unprecedented expansion of both countries’ foreign relations, their deeper integration into regional and global institutions and arrangements, as well as their gradual embrace of prevalent norms and practices.

Introduction

The popular Vietnamese legend “My Chau – Trong Thuy” has it that after defeating the last Hung King in what is now northern Vietnam, Thuc Phan ascended to the throne under the royal name of An Duong Vuong and renamed the nation from Van Lang to Au Lac, which he ruled from 257 BC to 207 BC. Seeking to establish a new capital, he decided to build a spiral, shell-shaped citadel at Co Loa but found the construction extremely difficult to complete, as every time it was near completion, the citadel would be undone at night by evil spirits. It was only with the assistance of Saint Kim Quy (Golden Turtle) that the citadel was finally completed. In order to help him protect the citadel from enemies, the Saint also offered him one of his claws to make the trigger of a magic crossbow, which was capable of hitting a thousand enemies with just a single shot.

From 217 BC to 207 BC, Trieu Da (Zhao Tuo), who was ruling what is now China's Guangdong and Guangxi provinces, made numerous attempts to invade and conquer Au Lac but never succeeded due to An Duong Vuong's defence tactics, especially with the help of the magic crossbow. In order to find out the secret behind his foe's invincibility, Trieu Da decided to devise a plot. He pretended to negotiate a peace treaty with Au Lac and proposed marriage between An Duong Vuong's daughter, Princess My Chau and his son Trong Thuy (Zhong Shi), to which An Duong Vuong carelessly agreed. It was not before long that Trieu Da learned through My Chau about An Duong Vuong's magic crossbow. He then told his son Trong Thuy to steal and replace the crossbow with a fake one. Now in possession of the magic weapon, Trieu Da launched a new attack on An Duong Vuong and Co Loa soon fell into Trieu Da's hands. An Duong Vuong took My Chau on horseback and fled away to the southern seashore. With the enemy pursuing right behind, An Duong Vuong was desperate and prayed to Saint Kim Quy for help. Replying to his words, the Saint appeared and told him that “The enemy is sitting right behind you!”.

Introduction

After a few years of unstable growth following the adoption of Doi Moi in 1986, Vietnam's economic reform began to stabilize and gather speed since 1989. Starting from a low base, Vietnam's economy has been growing rather quickly, at an average annual growth rate of 6.8 per cent for the period from 1990 to 2014. Over the past twenty-five years, Vietnam's economy has also become more open with external exchanges now playing an essential role in the nation's economic well-being. In 2014, for example, Vietnam's export and import turnovers amounted to 81 and 80 per cent of its GDP, respectively (World Bank 2015b).

The economy's current level of openness is impressive given the fact that it was only in the early 1990s, when the Soviet bloc collapsed, that the country effectively began to open up itself to economic interactions with countries outside the socialist bloc. The same observation is also true for Vietnam's economic relations with China. For example, when the two countries normalized their relations in 1991, official bilateral trade turnover stood modestly at US$30 million (Vinh 2001, p. 73). In 2013, however, two-way trade turnover reached US$50.2 billion, accounting for 19 per cent of Vietnam's total trade turnover of the same year and confirming China's status as Vietnam's biggest trade partner (General Department of Customs 2014). At the same time, Chinese investment into Vietnam, although still modest, has also increased considerably, especially in the recent years. In 2013, for example, China was the fourth largest foreign investor in Vietnam, with US$2.3 billion registered in 110 projects (GSO 2014b, p. 111).

Vietnam's deepened economic ties with China are just one of the three key features of Vietnam's relations with China since normalization in 1991. Over the last two decades, despite recurrent waves of tensions due to the territorial disputes in the South China Sea, Vietnam's overall relations with China have improved considerably. Apart from deepened economic exchanges, bilateral relations have generally benefited from the partial removal of territorial disputes and the continual promotion of political relations between the two states and the two communist parties, with the most visible landmark being the establishment of a “comprehensive strategic cooperative partnership” between the two countries in 2008. All these three features constitute the big picture of Vietnam–China relations since their normalization in 1991.

In March 2014, a news article in Dat Viet reported that Chinese textile producer Yulun Jiangsu received a licence to invest US$68 million into a textile plant in Nam Dinh province, 50 km south of Hanoi (Thu Phuong 2014). The article cited provincial authorities as saying that an unnamed investor from Hong Kong was also planning to set up a 1,000-hectare textile processing complex in Nghia Hung District of the same province. It went on to quote experts as explaining that the new wave of Chinese investment into the country's textile industry was due to Chinese investors’ expectation to take advantage of the Trans-Pacific Partnership (TPP) Agreement that Vietnam and other partners, including the United States but not China, were going to conclude. These experts also voiced their concern that such developments could lead to the domination and manipulation of the country's economy by Chinese companies. One of the experts even referred to concerns raised by netizens that the concentration of Chinese labourers working for a multi-billion steel project by Taiwanese company Formosa in Vung Ang Economic Zone of the central province of Ha Tinh might make Vietnam vulnerable in the event of a Chinese attack. The expert emphasized that the large presence of Chinese nationals in the area therefore generated more challenges than just social and economic ones (Thu Phuong 2014).

In the same month, a flurry of news stories commemorating the naval clash on 14 March 1988 between Vietnam and China in the Spratlys also appeared in most major Vietnamese news websites. Almost one month before that, a wide range of news articles and stories commemorating the thirty-fifth anniversary of the Vietnam– China border war, which broke out on 17 February 1979, were also published in numerous newspapers and websites, including statesanctioned ones. These moves came as a surprise as the 1979 border war as well as the 1988 naval clash had always been considered “sensitive issues” by Vietnamese authorities. They were even hardly mentioned in official textbooks and the media were previously restricted from covering the issues. The Vietnamese government's decision to relax the censorship on these two events in 2014 therefore, to a certain extent, reflects a shift in its attitude towards these two issues.

The economic, political, strategic and cultural dynamism in Southeast Asia has gained added relevance in recent years with the spectacular rise of giant economies in East and South Asia. This has drawn greater attention to the region and to the enhanced role it now plays in international relations and global economics.

The sustained effort made by Southeast Asian nations since 1967 towards a peaceful and gradual integration of their economies has had indubitable success, and perhaps as a consequence of this, most of these countries are undergoing deep political and social changes domestically and are constructing innovative solutions to meet new international challenges. Big Power tensions continue to be played out in the neighbourhood despite the tradition of neutrality exercised by the Association of Southeast Asian Nations (ASEAN).

The Trends in Southeast Asia series acts as a platform for serious analyses by selected authors who are experts in their fields. It is aimed at encouraging policy makers and scholars to contemplate the diversity and dynamism of this exciting region.

Malaysia is a monarchy — albeit one that is sui generis. Rather than following a single line of succession, the kingship rotates among a group of traditional rulers — or sultans — who head nine of the country's thirteen states. Although some of the sultanates pre-date the arrival of Islam in the region, they are now closely associated with the religion and have been a part of the Malayan peninsula's political context for 600 years.

During the pre-colonial and colonial eras, the rulers had a wide scope of prerogatives but many of these were relinquished during Malaysia's transition to independence. At present, the sultans are ceremonial rulers, and executive power rests with the prime minister at the national level, and chief ministers and menteris besar at the state level. That said, they are responsible for religion and Malay culture within their respective states, while their historic and symbolic importance as well as a number of constitutional provisions allow their influence to extend significantly further.

Over the past few years, these rulers have begun to assume a more visible role in the country's political life. In some states, they have chosen to withhold their consent for the appointment of menteris besar and, in Perak in 2009, the sultan played a decisive role in toppling the coalition in power. Collectively, the sultans have also weighed in on national-level issues such as the quality of governance and rule of law.

Of the traditional rulers, the Sultan of Johor, Ibrahim Ismail, has been arguably the most notable. Part of his public persona revolves around his extensive collection of vehicles. He recently purchased a blue and gold 737 Boeing, which will be used to “promote Johor” and allow him to travel the world like his ancestors “who once travelled around in ships”. He has also given another plane to the Johor soccer team, which is owned by his eldest son, the Crown Prince.

The Sultan was also the first of the rulers to obtain a locomotive driving licence, and he piloted the last Malayan Railway train out of Tanjong Pagar Station in Singapore in 2011. A long-time automobile aficionado, he has a collection of some 300 units.