Vietnam in a Taiwan Contingency: Facing Multiple Crises

Vietnam in a Taiwan Contingency:Facing Multiple Crises Hanh Nguyen (bio) In a Taiwan strait contingency, Vietnam's robust engagement with Taiwan would pose multiple simultaneous challenges for Hanoi, notably economic contraction, humanitarian crises, and military contingencies in the South China Sea. Furthermore, a great-power conflict arising from this crisis would upend the central assumption behind Vietnam's omnidirectional foreign policy—a benign regional security environment without great-power warfare. Demanding crisis-management tasks and uncertainty over the new geopolitical era that could follow a major Taiwan contingency might prevent Hanoi from taking a strong stance during a crisis, with implications for its emerging middle-power status. Robust Engagement despite Diplomatic Constraints Vietnam and Taiwan do not maintain official diplomatic relations. Hanoi adheres to Beijing's "one China" principle, which claims Taiwan as an inalienable part of China. During the Vietnam War, Taiwan maintained official ties with the Republic of Vietnam as both sides shared an anti-Communist agenda.1 After the war, there was no contact between the two sides until 1992, when Taiwan established a Taipei Economic and Cultural Office in Hanoi and later another office in Ho Chi Minh City, both of which function as de facto embassies. Vietnam opened its own economic and cultural office in Taiwan in 1993. These constraints on diplomacy, however, did not prevent both sides from establishing economic and people-to-people exchanges. Vietnam and Taiwan signed their first bilateral investment agreement in 1993. Since then, Taiwan has consistently been one of Vietnam's leading investors, with over 2,900 projects worth $36 billion in total registered capital as of December 2022 (for projects still in effect).2 Because Vietnam's economic [End Page 47] growth is reliant on manufacturing exports led by FDI, Taiwan has become a significant contributor to Vietnam's development because its investments are concentrated in this sector. Taiwan is also among Vietnam's top-five import markets (see Table 1), surpassing much bigger economies such as the European Union and the United States. Two-way trade between Vietnam and Taiwan comprises many of the same products, including computers, electronic products and components, and machinery.3 Taiwanese business representatives often travel to Vietnamese provinces to explore investment opportunities, and they are warmly welcomed by provincial leaders who extol Taiwan's contributions to local development.4 Local leaders also actively encourage further investment, especially in the electronics and chipmaking sectors, promising preferential policies on land allocation, and rent as well as efficient administrative procedures. Click for larger view View full resolution Table 1. Vietnam's Import Values from Major Trade Partners ($ Billion) [End Page 48] There are no official estimates of the number of Vietnamese living in Taiwan. However, a recent estimate by the Vietnam Economic and Cultural Office in Taipei puts this figure at approximately 400,000. Migrant workers account for more than 250,000 of this group, generally working in manufacturing, healthcare, and family housekeeping. This figure is expected to grow further due to Taiwan's labor demands, favorable salaries, cultural similarities, and geographic proximity to Vietnam.5 At the same time, Taiwan also seeks to boost people-to-people exchanges with Vietnam, particularly in the education and tourism sectors, under the New Southbound Policy unveiled in 2016. This policy aims to cultivate economic collaboration, talent exchange, resource sharing, and regional links with nations in Southeast Asia, South Asia, and Oceania.6 Historically, Taiwan has tried to develop and enhance connections with surrounding regions to reduce its economic reliance on China, as evidenced by successive versions of "Go South" policies under Presidents Lee Teng-hui and Chen Shui-bian. Such an approach has brought increasing numbers of Vietnamese students and visitors to Taiwan.7 Not everything is smooth sailing for Taiwan-Vietnam relations, however. Thorny issues include the South China Sea disputes and problems related to migrant workers. Taipei and Beijing appear to share similar claims in the South China Sea—a dashed line that encloses much of the sea—and Taiwan controls the Pratas and Itu Aba Islands.8 These claims put Taiwan in direct dispute with Vietnam (except for Pratas Island, which Vietnam does not claim). Hanoi regularly objects to Taiwan's actions to...