Vietnam is taking advantage of the heightened US-China rivalry to rebalance its relationship with China. Vietnam relies on China to propel its rapidly growing economy. China is Vietnam’s biggest trading partner. But now some uneasiness has crept in. China’s plan to create three special economic zones in Vietnam brought tens of thousands on to the streets in June to protest what was widely seen as a direct Chinese presence on Vietnamese soil.

In trade, Vietnam has capitalised on the fallout of the US-China trade war to become a top destination for manufacturers looking to avoid tariffs. A number of firms are relocating from China to Vietnam. The trade war has also highlighted Vietnam’s historic economic dependence on China, and increased the risks for Vietnam. The fear is that Chinese goods will come to Vietnam, be stamped as made in Vietnam and shipped on to the United States.

Already the US has come down on Vietnamese products. In May the US slapped tariffs on Vietnamese steel, saying China was using Vietnam to avoid US-imposed anti-dumping measures on Chinese steel. Therefore, Vietnam has resolved to diversify its risks, and build on its already highly active efforts to pursue trade agreements with a wide variety of partners.