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How will the change of leadership in Vietnam affect foreign policy?

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Observers say that despite the uncertainty in Hanoi following the death of long-serving leader Nguyen Phu Trong, China’s relations with Vietnam will remain largely stable.

Mr Trong, 80, who died last week after a long illness, was a prominent figure in Vietnam’s rapid economic growth and fight against corruption. He also spearheaded Vietnam’s ‘bamboo diplomacy’, which struck a delicate balance in the US-China rivalry.

In a rare visit to the Vietnamese embassy in Beijing last Saturday, Chinese President Xi Jinping spoke of their ‘deep friendship’ and praised Trong’s ‘outstanding contribution’ to relations between the two countries and their ruling parties.

The Chinese Communist Party also issued a condolence message hours after Trong’s death was announced, describing him as ‘a good comrade, a good brother and a good friend’. China’s No 4 official, Wang Huning, is leading a delegation to Vietnam to attend Nguyen’s state funeral on Friday (today).

Hanoi stressed the importance of its relations with Beijing, pledging to Chinese Ambassador Pham Sao Mai to ‘stick to the strategic choice and priority of developing friendly cooperation with China’, according to the official Xinhua news agency.

Zhang Mingliang, an expert on Southeast Asian affairs at Jinan University in Guangzhou, said Xi’s embassy visit showed that Beijing was relatively satisfied with the development of bilateral relations during the Trong era.

“Compared to relations during the oil rig crisis in 2014 and [former US President Donald] Trump’s state visit to Vietnam in 2017, Sino-Vietnamese relations have improved significantly since Hanoi adopted the concept of ‘community of shared destiny’ at Beijing’s request last year,” Zhang told the South China Morning Post.

“Compared to the high tensions with the Philippines in the South China Sea, Vietnam and China have managed to get along well without exaggerating their deep differences on regional issues,” he added.

Relations between the communist neighbours have been turbulent in recent decades, with clashes over the disputed Paracel Islands in the 1970s and a brief but bloody border war in 1979.

Zhang noted that relations also hit a low point during the 2014 diplomatic row over China’s placement of a deepwater oil rig near the Paracels, which was seen as a turning point in Hanoi’s relations with Washington.

“Under Trong’s rule, Vietnam has managed to establish at least a superficially friendly relationship with China. But at the same time, Vietnam’s relations with the US and Russia have reached unprecedented levels,” Zhang said.

“The purpose of all this is to keep China in check and ensure that Vietnam enjoys a favourable international environment and relatively stable relations with China, which are largely under Hanoi’s control. This may seem like an impossible task, but Trong’s Vietnam has managed to hedge its bets with the big powers,” he added.

Relations with China

Vietnam’s most influential leader since founding revolutionary leader Ho Chi Minh, Trong became general secretary of the ruling party in 2011 and secured a precedent-setting third five-year term in 2021. Trong also served as Vietnam’s president from 2018 to 2020.

Amid speculation that his health was deteriorating, Trong visited Beijing in October 2022, his first overseas trip since suffering a stroke in 2019, and the first foreign leader to meet Xi after securing a third term.

In the past 10 months, despite his illness, Trong has hosted both Xi and US President Joe Biden in Hanoi, and met with Russian President Vladimir Putin in June. Hanoi has also elevated Japan, India, South Korea and Australia to its highest level of comprehensive strategic partners.

Carl Thayer, professor emeritus at the University of New South Wales in Australia, told the South China Morning Post that Trong will be remembered for his 2015 trips to the US and Japan, which laid the groundwork for closer ties with the West.

“Hanoi’s relations with Beijing will remain ‘stable and friendly’ because Vietnam will not abandon its foreign policy of ‘peace, cooperation and development’,” Thayer said.

“China plays a special role in Vietnam’s foreign relations. It is Vietnam’s first comprehensive strategic partner and the only major power to be called a comprehensive strategic cooperation partner,” he said.

Analysts also pointed to Trong’s personal bond with Xi and the ties between the two communist parties, which over the years have acted as a counterweight in the turbulent relationship between Hanoi and Beijing.

As Vietnam has expanded its diplomacy and improved its relations with the United States, I think Trong has been able to convince Beijing that Vietnam is truly neutral and independent and that improving relations with Washington would not be to Beijing’s detriment,” said Southeast Asia expert Zachary Abuza, a professor at the National War College in Washington.

“This was possible because of Trong’s resolute communist ideology. He saw the world the way Xi Jinping does,” he added.

Abuza also noted that China has inter-party channels with Vietnam to ensure a constant flow of communication between senior officials, something the United States does not have.

Nguyen Khac Giang, an analyst at the ISEAS-Yusof Ishak Institute in Singapore, said Trong and Xi had a close relationship because of their shared commitment to Marxism-Leninism.

“This helped stabilise bilateral relations, especially during periods of tension over maritime disputes in the South China Sea, Trong also had a very positive view of China and admired the Chinese Communist Party, but took a pragmatic approach with them on many sensitive issues,” the analyst told the South China Morning Post.

Although Trong’s potential successors, such as President To Lam, may not have the same bond with Xi, “I don’t think this will greatly affect Hanoi’s ability to maintain good relations with China because the inter-party bond remains strong,” Giang said.

He said the bamboo diplomacy approach ‘is working well’ and Trong’s successor is unlikely to change it or its core policies ‘to prove his legitimacy as the rightful heir’, at least in the medium term.

‘No drastic changes in foreign policy’

A day before his death, Trong’s duties were temporarily transferred to Lam. Lam, 66, who became head of state in May, was previously Vietnam’s minister of public security and oversaw the anti-corruption campaign. The so-called ‘furnace of fire’ campaign has led to the dismissal of 40 members of the party’s central committee and dozens of army and police generals since 2016.

The removal of six of the 18 members of the Politburo since December 2022, including three of Vietnam’s top five leaders since March, has raised concerns about uncertainty.

Despite the political turmoil, Abuza said he expects ‘absolutely no change’ in Vietnam’s foreign policy, saying Hanoi will remain ‘scrupulously neutral’ and has deep economic ties with both China and the US and its allies.

ASIA

Afraid of the gun; Taliban supreme leader fears of a coup

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Hibatullah Akhundzada, the supreme leader of the Taliban, has ordered the security institutions that without his permission, “no one can distribute or use the military equipment registered by the ministries of defense and interior, the directorate of intelligence and other independent institutions.”

Experts and analysts have considered this move by Hibatullah as last resort to weaken the position of defense minister, Yaqoob Mujahid, interior minister, Sirajuddin Haqqani and the head of Taliban intelligence, Abdul Haq Wasiq in order to prevent a possible internal coup that was initiated by these three top officials.

In the first article of the order, it is mentioned that no person can distribute military equipment registered in the reserves of the ministries of defense, interior and intelligence, or issue an order to distribute it without the order of Hibatullah.

This decree titled “Regarding the distribution, protection and supervision of registered military equipment”, specifies that whenever an Emirate entity (Taliban-related entity) needs weapons, ammunition, night vision cameras, telecommunications and other military equipment” must receive the approval order from the leader of the Taliban.

Also, in the second article of this decree, it is stated that whenever one of the military departments of the Taliban needs military equipment, it must send its request to Hibatullah’s office in Kandahar.

In the third article of the decree, it is emphasized that if the military equipment was distributed or used without the permission of the Taliban leader before the issuance of this decree, they must be returned to the reserves.

Ministries of defense, interior and head of intelligence department are banned from disturbing military weapons.

According to this article, Hibatullah entrusted the ministries of defense and interior, as well as the general directorate of Taliban intelligence, with the responsibility to report the list of available military equipment to the directorate of registration, and protection of military equipment.

This order of the Taliban leader has been considered as another step in the direction of concentrating more power in the hands of Mullah Hibatullah in Kandahar. Many have seen it as a sign of Hibatullah’s increasing distrust of senior Taliban officials in Kabul. Previously, some senior Taliban officials, including Sirajuddin Haqqani, have openly disobeyed Hibatullah’s order to prohibit photography and filming and have not followed the order of their supreme leader.

(R) Defense Minister Mullah Yaqoob Mujahid and (L) Interior Minister Sirajuddin Haqqani.

Previously, several reports have been published about the sale of military equipment left over from the US troops and Afghan security forces during the republic government. Even the US-elected president Donald Trump, repeatedly mentioned this issue during his election campaigns. Not long ago, the government of Pakistan also announced that the Pakistan security forces have discovered and confiscated a car carrying US weapons smuggled from Afghanistan.

Pakistani media reported that this equipment included M4 assault rifles, night vision cameras and thousands of rounds of ammunition, which were transported in a truck carrying vegetables. Pakistani security officials have estimated the total value of weapons smuggled from Afghanistan in this truck to be 126,354 US dollars.

The cost of US’s remaining equipment in Afghanistan estimated over 7 billion US dollars

The Pentagon has already announced that after the withdrawal of US forces from Afghanistan, about 7 billion dollars of military equipment fell into the hands of the Taliban. This equipment reached the hands of the Taliban after the fall of Afghanistan on 15 August, 2021.

It has been reported that when the US forces left Afghanistan, there were 78 US-made aircrafts in the country, whose value reached 1 billion dollars. According to CNN, with the end of the US military presence, a total of more than 9,000 air-to-ground munitions worth more than six and a half million dollars have remained in Afghanistan.

The report also states that out of a total of 96,000 military vehicles, more than 40,000 units, including 12,000 Humvees (armored tanks), fell into the hands of the Taliban. Moreover, out of a total of more than 400,000 weapons that the US gave to the forces of the former Afghan government, about 300,000 remain in the country.

Almost all “communications equipment, including mobile base stations, portable and hand-held commercial and military radio systems, and associated transmitters and encryption devices, all remain in Afghanistan,” according to the report.

The report added that “almost all” of the equipment for night vision cameras, surveillance, biometric and positioning equipment,” a total of nearly 42 thousand pieces of specialized equipment, remained in Afghanistan.

Meanwhile, Five Mi 17 helicopters of the then Afghan army, which were transferred to Ukraine for repair before the collapse of the government, have also returned to Afghanistan and now are used by the Taliban.

It should be noted that the internal rivalries in the Taliban, especially among the different factions of this group, is one of the important reasons for Mullah Hibatullah’s distrust of some Taliban officials. Some officials, including interior minister Sirajuddin Haqqani and defense minister Mohammad Yaqub Mujahid, gained a lot of power, especially during the Taliban’s war against foreign forces, and Mullah Hibatullah may be worried that these officials are trying to expand their power, which is a clear threat to his position as the Taliban leader.

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China’s BYD prepares to launch latest SUV, the Sealion 07, in Europe despite EU tariffs

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BYD, the world’s largest electric vehicle (EV) maker, is set to launch its latest SUV, the Sealion 07, in Europe, undeterred by recent tariff increases on Chinese-made electric vehicles. This strategic move highlights BYD’s commitment to expanding overseas sales despite economic barriers.

Deliveries of the Sealion 07 are scheduled to begin in 2025, marking BYD’s seventh all-electric model in the European market, the company announced on Wednesday. Additionally, BYD plans to enter the South Korean market next year, adding to its existing presence in 95 countries worldwide.

This European expansion comes on the heels of the European Union’s decision last month to impose new tariffs—ranging from 17% to 35.3%—on Chinese electric vehicles following an anti-subsidy investigation. BYD’s EVs are subject to a 17% tariff, in addition to the standard 10% tariff applied to all pure electric cars imported from China. These tariffs, which took effect last month, will remain in place for five years. Meanwhile, U.S. tariffs on Chinese-made EVs increased from 25% to 100% as of September, citing similar concerns.

Despite the added costs, BYD’s vehicles continue to hold strong appeal in export markets. “BYD’s vehicles remain attractive even after the additional tariffs, so it’s not really a big problem for the company,” said Chen Jinzhu, CEO of Shanghai Mingliang Auto Service, a leading industry consultancy. “The Sealion 07 exemplifies how BYD’s cost advantage enables it to counteract such trade barriers in key export markets.”

Shenzhen-based BYD has yet to disclose the European pricing for the Sealion 07. On the mainland, the SUV—featuring a range of 450 kilometers—starts at 189,800 yuan (approximately US$26,272), with deliveries beginning in May.

According to a report last year from UBS analysts, BYD has a sustainable cost advantage of 25% over traditional European brands.

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Singles’ day promotions target overseas Chinese as China’s domestic demand slows

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After last year’s Singles’ Day shopping festival in China was dubbed the “quietest in history,” China’s e-commerce platforms focused on a new strategy this year.

For this year’s Singles’ Day event, major e-commerce companies such as Alibaba, JD.com, and Pinduoduo invested heavily in expanding overseas markets, targeting the estimated 100 million Chinese living abroad with offers like discounts and free or low-cost shipping.

The central question, however, is not whether these efforts will succeed in the short term, but rather if this shift can help platforms grow their user bases as online sales growth in China reaches a bottleneck.

“Domestic consumption is quite weak right now, and every company is certainly considering new ways to drive growth for Singles’ Day,” said an executive at a leading online retailer, who requested anonymity. “The overseas market is widely seen as a promising source for additional growth,” he added in an interview with Nikkei Asia.

Singles’ Day, a one-day sales event launched by Alibaba in 2009 as a celebration for singles, has since evolved into a month-long campaign with special offers and deep discounts, culminating on or around November 11.

This year, China aimed to revitalize its retail sector with the event. Total consumer goods sales rose by 3.3% year-on-year in the first three quarters of 2024, though high-end consumer spending remained stagnant. Cosmetics sales fell by 1%, while gold and silver jewelry sales declined by 3.1% year-on-year.

Last month, Alibaba’s Taobao launched a significant marketing campaign in Hong Kong and Taiwan, flooding subway stations with advertisements for “free shipping on orders over 99 yuan,” among other offers. According to the company, the campaign cost 2 billion New Taiwan dollars ($61.7 million) in Taiwan and 1 billion yuan ($138 million) in Hong Kong.

Following Alibaba’s move, JD.com announced it had invested 1.5 billion yuan to offer discounted product prices and cheaper shipping to Hong Kong shoppers. Bargain platform Pinduoduo took it a step further, offering free shipping via courier SF Express for Hong Kong shoppers, regardless of the item’s price. All products on these platforms are shipped from mainland China.

A spokesperson from Alibaba’s International Digital Commerce Group noted that since the overseas initiative launched in October, Taobao Hong Kong has achieved double-digit growth in both orders and gross merchandise value (GMV)—a metric that excludes canceled orders—on both a monthly and year-on-year basis.

The platforms are also targeting Chinese shoppers in Malaysia, Thailand, and Singapore.

This year, unlike in previous years, shoppers could combine online discounts with a subsidy program introduced by the Chinese government to boost domestic consumption, primarily for home appliances and household products. Analysts suggest these incentives will likely boost sales for JD.com, which is known for selling high-quality large appliances and offering after-sales services.

While JD.com has yet to release sales or GMV figures for home appliances during the shopping festival, it is expected to share its June-September results, along with Alibaba, later this week.

Last year, data provider Syntun estimated that total GMV on major e-commerce platforms grew by only 2.1% to 1.14 trillion yuan, falling short of the 2.9% growth forecast for 2022. Similarly, consultancy Bain predicted that Singles’ Day sales would reach 1.15 trillion yuan in 2023.

On Tuesday morning, Alibaba announced “strong GMV growth” and a “record number” of active shoppers for this year’s Singles’ Day event.

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