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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.

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Chinese Politburo signals cautious confidence as Beijing pivots toward targeted tech support

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03/08/2026

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The mid-year meeting of the Communist Party of China (CPC) Politburo has long served as a critical evaluation point for Beijing. The session provides the central government with an opportunity to review developments from the first half of the year and steer the country toward a more realistic economic course in the months ahead.

The latest statement from the top leadership signals cautious confidence. The release indicates that policymakers are favoring a stable, targeted approach over the broad-based stimulus measures that characterized previous years. As China manages its economic transition, the post-Covid era of aggressive spending has clearly drawn to a close. In its place, a strategic and structural approach has taken hold, prioritizing resilience and stability over short-term capital injections.

According to the outcomes of the Politburo meeting, the policy orientation will continue to target specific sectors. Financial support will be directed away from the property market and toward high-tech emerging industries such as artificial intelligence and semiconductors. In the real estate sector, the objective remains stabilizing market confidence and keeping debt risks under control.

Infrastructure investment is likewise being reshaped around the concept of “new infrastructure.” The focus is no longer solely on concrete and physical structures; smart power grids, information technology networks, and data infrastructure have taken precedence.

This approach signifies an investment in future competitiveness rather than simply pumping capital into the economy’s more stagnant sectors. Serving as a new driver of growth, digital infrastructure fulfills a dual purpose: supporting domestic demand in the short term while safeguarding technological competitiveness over the long term.

Finally, Beijing is signaling a more conciliatory posture in international trade. The Chinese leadership aims to establish a more balanced trade framework to mitigate concerns voiced by trade partners such as the European Union over what has been termed “China Shock 2.0.”

As the administration prepares for critical leadership changes next year, its primary focus will remain on stability across both economic and social spheres.

China continues to strike a balance between realistic growth targets and systemic restructuring, maintaining policy leeway to absorb potential external shocks. Beijing’s economic strategy reflects a pragmatic assessment of both domestic and international challenges.

Struggling with weak demand, the domestic economy is not yet in a position to anchor national growth independently. Expansion continues to rely heavily on a record trade surplus alongside the impressive export performance of high-tech and clean energy sectors. However, this reliance has drawn pushback from several trading partners.

To stimulate domestic economic activity and ease trade tensions, Beijing unveiled its first standalone five-year plan focused on consumption. Released in July by the National Development and Reform Commission and the Ministry of Commerce, the plan targets an increase in retail sales to 60 trillion yuan (approximately $8.9 trillion) by 2030. This represents an increase of roughly 20% compared to 2025 levels.

To improve profit margins for small businesses, regulatory authorities are tackling the issue of “involution”—described as excessive internal competition—by curbing platform monopolies and preventing destructive price wars. While these structural adjustments may take longer to yield results, they are viewed as a more sustainable and effective alternative to direct cash handouts.

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Chinese chipmaker profits surge 2,500% on explosive AI computing demand

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28/07/2026

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Major Chinese microchip manufacturers saw their profits surge by 2,579.5% in the first half of 2026, driven by unprecedented demand for artificial intelligence and computing capacity.

Data from China’s National Bureau of Statistics, cited by the South China Morning Post (SCMP), underscored the industry’s sharp upward trajectory.

Yu Weining, senior statistician at China’s National Bureau of Statistics, explained that this surge is directly connected to the accelerating integration of artificial intelligence across various sectors.

Yu noted that this process has increased the need for computing capacity. The demand for computational processes also lifted profits across the entire electronics industry by 97% year-on-year.

Profits of major Chinese industrial enterprises with an annual revenue exceeding 20 million yuan ($2.9 million) rose 18.7% in the first six months of the year, reaching 4 trillion yuan.

In the first half of 2025, before the global data center construction process had begun, industrial profits had dropped by 1.8% to 3.4 trillion yuan, while profit growth in the electronics sector remained at 3.5%.

The SCMP reported that the global AI boom has generated explosive demand for high-performance computing systems and memory chips, causing a structural pivot in China’s industrial landscape.

Data showed that integrated circuit production in the first half of the year grew by 23% year-on-year to reach approximately 280 billion units.

This figure means that the country produced an average of more than 1.5 billion chips per day.

The profit growth is also corroborated by forecasts from China’s leading chipmakers. Shenzhen Longsys Electronics, one of the largest memory module manufacturers, expects its profits to increase by more than 600-fold in the first half of the year.

Flash memory maker GigaDevice projects that its net profit will surge by approximately 1,099% year-on-year due to supply shortages and rising product prices.

Chinese companies in the AI chip segment are also demonstrating strong profit growth, albeit at a more moderate pace compared to the memory market.

Hygon Information Technology, which develops central processing units and computing units for artificial intelligence, projects that its profits will rise by up to 52.3%.

CXMT hits record high on Shanghai Stock Exchange

Shares of Chinese chipmaker CXMT gained more than 500% on their first day of trading on the Shanghai Stock Exchange on July 27, jumping from 8.66 yuan to 55 yuan.

As a result of this sharp surge in its shares, CXMT’s market valuation reached 3.65 trillion yuan ($539 billion), making the company China’s most valuable publicly traded firm.

At the peak of the rally—even though quoted prices underwent a slight correction toward the close of the trading day—CXMT surpassed Tencent, which was trading on the Hong Kong Stock Exchange with a market capitalization of $514 billion.

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Massive student movement over exam leaks forces resignation of India’s education minister

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27/07/2026

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Indian public examination reform proposals follow education minister’s resignation after nationwide youth protests

India’s federal government introduced legislation in parliament on Monday to amend the law governing public examinations, days after the “Cockroach” movement forced the resignation of Education Minister Dharmendra Pradhan following nationwide youth protests.

The bill incorporates enhanced sanctions, including longer prison sentences and higher fines for those found responsible for exam leaks and irregularities.

The demonstrations are widely viewed as the most significant youth-led challenge faced by Prime Minister Narendra Modi since he took office in 2014.

What triggered the protests?

Nearly 2 million students took the National Eligibility cum Entrance Test (NEET), an undergraduate medical entrance examination, in May. The federal National Testing Agency cancelled the exam on May 12 following allegations that question papers had been leaked. The examination was re-administered on June 21.

Young people took to the streets to protest against examination fraud, youth unemployment, and a perceived lack of future prospects.

According to a BBC report, the unemployment rate among university and college graduates aged 15 to 25 in the country stands at a critically high level of 40%. The addition of corruption in public examinations to existing economic strain broke the patience of the youth.

Abhijeet Dipke, founder of the Cockroach Public Party (CJP) movement, led the protests.

The movement derived its name from remarks made in May by Supreme Court Judge Surya Kant, who used the terms “cockroach” and “parasite” in a derogatory reference to unemployed youth and protesters. Young demonstrators adopted the insult as a symbol and named their movement after it.

How the movement unfolded

Young protesters organized street demonstrations demanding the resignation of Education Minister Pradhan. Dipke, who initiated the movement in New Delhi, subsequently organized protests in other parts of the country.

Sonam Wangchuk, one of the protesters, began a hunger strike at the demonstration site in support of the movement. As his physical condition deteriorated, authorities forcibly transferred him to a hospital.

The reaction to Wangchuk’s forcible removal from the protest site caused crowds at the venue to expand rapidly.

Tens of thousands of protesters faced tear gas and baton charges by police while attempting to march on parliament. Some demonstrators engaged in clashes with law enforcement officers.

CJP leaders held talks with ministers from the Modi government, who requested time to evaluate the protesters’ demands internally.

Modi called for unity among lawmakers in the ruling coalition to implement strict measures against exam paper leaks, punish those responsible, and establish a secure, leak-proof system.

Opposition representatives led by Rahul Gandhi staged a sit-in at the entrance of Modi’s official residence demanding Pradhan’s resignation. They were briefly detained by police before being released.

Opposition lawmakers supporting the student protesters disrupted proceedings in parliament. Demonstrations expanded to other regions of the country, including the financial hub of Mumbai.

In his first direct statement regarding the protests, published in a post on X, Modi announced that special courts would be established to prosecute individuals involved in exam paper leaks. Protesters rejected the proposal.

Movement leaders held a second round of talks with the government after Wangchuk ended his 26-day hunger strike.

Following those discussions, the government requested time until the afternoon of the following day to respond to the demand for Pradhan’s resignation.

Education Minister Pradhan subsequently announced his resignation, stating that he was stepping down in light of the situation at the protest site and across the country, as well as to prevent “external forces” from exploiting the environment.

On July 26, Modi announced the creation of a task force headed by technology entrepreneur Nandan Nilekani to overhaul the country’s examination system.

On Monday, July 27, the government presented a bill to parliament proposing amendments to the law governing public examinations. The legislation introduces stiffer penalties for offenders, including extended prison terms and increased monetary fines.

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