A vendor stands by his decorations shop in Hanoi. Vietnam's economy grew by more than 5 per cent in 2023. AFP
A vendor stands by his decorations shop in Hanoi. Vietnam's economy grew by more than 5 per cent in 2023. AFP
A vendor stands by his decorations shop in Hanoi. Vietnam's economy grew by more than 5 per cent in 2023. AFP
A vendor stands by his decorations shop in Hanoi. Vietnam's economy grew by more than 5 per cent in 2023. AFP


How Vietnam turned US-China competition to its advantage


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January 04, 2024

The once-impoverished and war-stricken nation of Vietnam has emerged as a global pivot state, with 2023 being the year in which major investors and superpowers paid more attention to it than ever before.

Vietnam’s diplomatic success has been nothing short of breath-taking. Within a span of few months, it became the only country to serve as a state-visit destination for both US President Joe Biden and Chinese President Xi Jinping. While Mr Biden oversaw the elevation of bilateral ties to a “comprehensive strategic partnership”, Mr Xi ushered in a “golden era” of bilateral relations with his communist brethren to the south.

Just as crucial, however, is the South-East Asian nation’s fruitful wooing of global investors, including Big Tech companies from the West and China. Flushed with increasingly sophisticated investments from overseas, it is gradually building up its own industrial base. Its homegrown electric car dynamo, VinFast, has launched its first dealership in the US, the world’s most competitive automobile market, months after a successful New York Stock Exchange debut.

In August, the barely half-a-decade-old VinFast was the world’s third-most valuable automobile company, beating blue-chip German and Japanese manufacturers. As if that weren’t enough, Vietnam is also intent on building its own semiconductor industry, thus joining the global “Chip War” with gusto. By adopting an adept “bamboo diplomacy”, Vietnam has managed to benefit from both western and Chinese investments.

Crucially, economic boom also allows this non-aligned nation to modernise its armed forces and, accordingly, develop robust deterrence against external aggression. The leadership’s goal is to turn the country into a modern and self-reliant power in the Indo-Pacific.

Historically, few nations have had as turbulent a history as Vietnam. Throughout the past millennia alone, it has had to grapple with several invading empires, including Mongolians, the Chinese and the French.

Chinese President Xi Jinping and Vietnam's Communist Party General Secretary, Nguyen Phu Trong, attending a ceremony in Hanoi with their wives in December. AFP
Chinese President Xi Jinping and Vietnam's Communist Party General Secretary, Nguyen Phu Trong, attending a ceremony in Hanoi with their wives in December. AFP
Vietnam’s fruitful wooing of global investors, including Big Tech companies from the West and China, is crucial

In its struggle for survival, it was forced to develop a unique set of state institutions that have few parallels in the region. Practically all major South-East Asian kingdoms relied on a “Mandala” system of governance, namely a central authority exercising power through spheres of influence rather than direct control across a vast geographic expanse.

In Vietnam’s northern regions, however, increasingly sophisticated state institutions began to emerge, thus laying down the foundation for the conquest of southern polities, most notably the Indic Champa kingdom half-a-millennia ago.

Contemporary Vietnam often defines itself in opposition to its much larger neighbour, China. The cliche is that it fought an anti-colonial war against the Chinese for “a thousand years”. But as scholars such as Christopher Goscha have argued, Vietnam wouldn’t become a relatively monolithic and coherent nation-state until more recent times. If anything, various kingdoms in northern Vietnam lived, as eminent historian Keith Weller Taylor explains, in peaceful co-existence with China and were even “dependent upon a successful practice of mimicry” of it.

In fact, Vietnam relied on comprehensive Chinese strategic patronage – first under Kuomintang nationalists and later under Maoist forces – throughout the first half of the 20th century in order to drive away western empires from Indochina. And it was Chinese leader Deng Xiaoping’s market reforms that largely inspired Vietnam’s own post-Cold War “Doi Moi” (Renovation) economic liberalisation policies.

Vietnam’s contemporary strategic outlook, however, was shaped by traumatic events during the second half of the 20th century. At the height of the Cold War, and following a string of victories, it suddenly found itself facing both the West and China almost alone. By the 1980s, its Soviet ally was bogged down in Afghanistan, thus leaving Vietnam in a precarious position.

Following the end of the Indochina Wars, Vietnam had its “Never Again” strategic moment. Accordingly, it adopted a fiercely self-reliant national security doctrine that included “Four Nos”: no alliance with any foreign power; not siding with any superpower against the other; no foreign military bases; and no reliance on military force as a primary instrument of foreign policy.

Its pragmatic post-war leaders prioritised reconstruction and economic development and after decades of reforms, a new generation of relatively liberal leaders went so far as pursuing warmer ties with the West, including the US. The upshot was the full normalisation of bilateral ties with America and the gradual emergence of strategic partnerships with major western economies.

Decades after the Vietnam War, the South-East Asian nation is today an attractive destination for overseas investors. Getty Images
Decades after the Vietnam War, the South-East Asian nation is today an attractive destination for overseas investors. Getty Images

It also adopted a proactive trade policy, signing agreements with the US and the EU, and joining the Japan-led Comprehensive and Progressive Agreement for Trans-Pacific Partnership. This went hand-in-hand with closer security co-operation with the US and the EU.

By building robust ties with the West, Vietnam sought to balance a rising China. When a trade war broke out between the world’s two superpowers, however, it emerged as an unlikely beneficiary. The West began relying more on Vietnamese exports amid its decoupling plans from China. Yet Vietnam also began to become more dependent on Chinese intermediate goods, capital and technology for its burgeoning manufacturing base.

The upshot was the emergence of a global pivot state that triggered a wave of courtship by both Washington, which seeks to enlist Vietnam’s support to hem in China, as well as Beijing, which seeks stable ties. By hosting Mr Biden and Mr Xi in quick succession, Hanoi showed a willingness to maximise ties with both superpowers, but it also signalled a determination to preserve its strategic autonomy.

Its communist leadership is intent on keeping a healthy distance from Washington, lest it risks western-backed colour revolutions at home or provoke Beijing. Economic boom in the past decade has birthed an increasingly large and cosmopolitan middle class. As a result, its security establishment is intent on preventing large-scale pro-democracy protests. No wonder, then, that during Mr Biden’s September visit to Hanoi, Vietnamese leaders enthusiastically welcomed expanded economic co-operation but largely shunned tighter military and political entanglements.

Just two months later, Vietnam hosted top Chinese leaders in order to dispel any suspicion of an alignment with the West. During Mr Xi’s visit, the two countries signed a series of co-operative agreements to maintain economic ties. Crucially, however, Vietnam made it clear it won’t sacrifice its territorial and maritime claims in the South China Sea, where it is at loggerheads with Beijing.

Thanks to its deft diplomatic manoeuvres, Vietnam has found itself in a strategic sweet spot. Large-scale investments from both the West and China are fuelling its rapid economic development. These allow it to not only enhance the welfare of its citizens, thus boosting the communist party’s legitimacy, but also provide significant resources for military modernisation.

Without a doubt, the new year will be filled with many geopolitical challenges, especially growing tensions between the US and China. But if there is one middle-sized country in East Asia that has shown an ability to hold its own in the face of manifold geopolitical challenges, that’s Vietnam.

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World record transfers

1. Kylian Mbappe - to Real Madrid in 2017/18 - €180 million (Dh770.4m - if a deal goes through)
2. Paul Pogba - to Manchester United in 2016/17 - €105m
3. Gareth Bale - to Real Madrid in 2013/14 - €101m
4. Cristiano Ronaldo - to Real Madrid in 2009/10 - €94m
5. Gonzalo Higuain - to Juventus in 2016/17 - €90m
6. Neymar - to Barcelona in 2013/14 - €88.2m
7. Romelu Lukaku - to Manchester United in 2017/18 - €84.7m
8. Luis Suarez - to Barcelona in 2014/15 - €81.72m
9. Angel di Maria - to Manchester United in 2014/15 - €75m
10. James Rodriguez - to Real Madrid in 2014/15 - €75m

COMPANY%20PROFILE
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Company profile

Company: Rent Your Wardrobe 

Date started: May 2021 

Founder: Mamta Arora 

Based: Dubai 

Sector: Clothes rental subscription 

Stage: Bootstrapped, self-funded 

COMPANY PROFILE

Name: Xpanceo

Started: 2018

Founders: Roman Axelrod, Valentyn Volkov

Based: Dubai, UAE

Industry: Smart contact lenses, augmented/virtual reality

Funding: $40 million

Investor: Opportunity Venture (Asia)

The biog

Favourite car: Ferrari

Likes the colour: Black

Best movie: Avatar

Academic qualifications: Bachelor’s degree in media production from the Higher Colleges of Technology and diploma in production from the New York Film Academy

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While you're here
In numbers: China in Dubai

The number of Chinese people living in Dubai: An estimated 200,000

Number of Chinese people in International City: Almost 50,000

Daily visitors to Dragon Mart in 2018/19: 120,000

Daily visitors to Dragon Mart in 2010: 20,000

Percentage increase in visitors in eight years: 500 per cent

UAE currency: the story behind the money in your pockets
The smuggler

Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple. 
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.

Khouli conviction

Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.

For sale

A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.

- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico

- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000

- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950

Company Profile:

Name: The Protein Bakeshop

Date of start: 2013

Founders: Rashi Chowdhary and Saad Umerani

Based: Dubai

Size, number of employees: 12

Funding/investors:  $400,000 (2018) 

Business Insights
  • As per the document, there are six filing options, including choosing to report on a realisation basis and transitional rules for pre-tax period gains or losses. 
  • SMEs with revenue below Dh3 million per annum can opt for transitional relief until 2026, treating them as having no taxable income. 
  • Larger entities have specific provisions for asset and liability movements, business restructuring, and handling foreign permanent establishments.
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The specs

Engine: 1.5-litre 4-cylinder petrol

Power: 154bhp

Torque: 250Nm

Transmission: 7-speed automatic with 8-speed sports option 

Price: From Dh79,600

On sale: Now

UAE currency: the story behind the money in your pockets
Tips for used car buyers
  • Choose cars with GCC specifications
  • Get a service history for cars less than five years old
  • Don’t go cheap on the inspection
  • Check for oil leaks
  • Do a Google search on the standard problems for your car model
  • Do your due diligence. Get a transfer of ownership done at an official RTA centre
  • Check the vehicle’s condition. You don’t want to buy a car that’s a good deal but ends up costing you Dh10,000 in repairs every month
  • Validate warranty and service contracts with the relevant agency and and make sure they are valid when ownership is transferred
  • If you are planning to sell the car soon, buy one with a good resale value. The two most popular cars in the UAE are black or white in colour and other colours are harder to sell

Tarek Kabrit, chief executive of Seez, and Imad Hammad, chief executive and co-founder of CarSwitch.com

THE BIO

Favourite place to go to in the UAE: The desert sand dunes, just after some rain

Who inspires you: Anybody with new and smart ideas, challenging questions, an open mind and a positive attitude

Where would you like to retire: Most probably in my home country, Hungary, but with frequent returns to the UAE

Favorite book: A book by Transilvanian author, Albert Wass, entitled ‘Sword and Reap’ (Kard es Kasza) - not really known internationally

Favourite subjects in school: Mathematics and science

Islamic%20Architecture%3A%20A%20World%20History
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Living in...

This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.

Labour dispute

The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.


- Abdullah Ishnaneh, Partner, BSA Law 

Jetour T1 specs

Engine: 2-litre turbocharged

Power: 254hp

Torque: 390Nm

Price: From Dh126,000

Available: Now

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Updated: January 06, 2024, 9:30 AM`