Why Should We Care About Vietnam’s South China Sea Island-Building Campaign?
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Welcome once again to Why Should We Care About the Indo-Pacific, brought to you by our producer, IEJ Media, and our sponsor, Bauer Group Asia. We'll talk more about them in due course. I am the former military officer, Ray Powell. I am joined by my friend and former boss, the former diplomat, Jim Caruso. How are you, Jim? All good here, Ray. Former is the key word.

Well, today I'm excited because it is Vietnam Day. For those who are on audio, I am sporting my commemorative Vietnam military hat. But we are joined by a longtime friend.

BBC reporter in Southeast Asia who is now an associate fellow at Chatham House. He is Bill Hayton. He is the author of two books on Vietnam, one on the South China Sea and one on China. And in fact, his first book, Vietnam Rising Dragon, was the one that I consumed voraciously before I went to my assignment at the U.S. Embassy in Vietnam about a little over a decade ago.

And it was the best book I'd ever read on Vietnam. So I then proceeded to read everything else he wrote. So I'm very excited to have him. Thank you very much. High praise. Thank you. Thank you. Well, I... So, Bill...

When I did get to Vietnam, it happened to be at the exact time that China was beginning its very aggressive island building campaign. And now...

over a decade later, we find ourselves in the middle of Vietnam's very own aggressive island building campaign, which seems to be approaching the same scale as what China accomplished last decade. By some counts, they've got up to eight new harbors in the Spratly Islands. They have constructed a runway at Arkanada Reef. There may be up to three more envisioned based on what the Asian Maritime Transparency Initiative has said. And

And also, very interestingly, China has been surprisingly muted in its response to Vietnam's campaign. So, Bill, we'll start with our trademark question. Why should we care about Vietnam's island building campaign?

I think we should care, Ray, because it changes the balance of power in the South China Sea. And as we know, the South China Sea is where these great power confrontations meet, you know, small little disputes about rocks and reefs and fishing rights and that kind of thing. And on one level, you've got the possibility of, you know, a huge...

you know, conflict. And on the other end, you've got the possibility of some minor, you know, clash between fishing boats, which could sort of escalate and connect the two. So anything that happens in terms of changing the balance of power and the, you know, the actual willingness, I guess, of the different people involved to have a confrontation, I guess, has the possibility of spilling over into the wider world.

So that's really why we should care. And it is quite fascinating, as you say, that Vietnam has quietly been building up these little rocks and reefs into much more substantial bases. And we've heard so little about it. So why do you think that is, Bill? And given China's sometimes over-the-top reaction, for instance, to the Philippines, resupplying a rusty old ship

on a, on a reef. Why, why is the relationship so different? Yeah, I think it's good. And I think it's, it's worth pulling out that contrast just to make sure that everybody's aware of this. I mean, you've had clashes between the Philippines and, and China going on for, you know, more than the past year over what was really the Philippines attempt to repair a rusting ship that was, that is literally falling apart. And at one point, you know,

A Coast Guard officer was injured, lost a thumb in confrontations. And, you know, in theory, that could have been a trigger for the Philippines and the U.S. to invoke their mutual defense treaty. And it could have led to a war potentially. So you have these big, you know, these confrontations happening between the Philippines and China, and yet no reports of confrontations between Vietnam and China.

Now, all I can think of is that the Vietnamese and the Chinese side came to an understanding at some point in the recent past, a deal.

under which China was willing to turn a blind eye to these operations. Now, it's no secret that certainly since 2020, Vietnam has not drilled for oil or gas inside China's claim line, inside the U-shaped or nine-dash line in the South China Sea.

And so I just wonder whether the two sides came to a sort of working arrangement. You know, we won't, you know, violate the nine dash line in terms of drilling for oil and gas. And in the meantime, you know, you will leave us alone on our bases. I mean, I have no, you know, smoking gun on that, no sort of piece of paper that proves that. But I just wonder whether that was some kind of arrangement that the Vietnamese and the Chinese came to.

particularly under the previous leader of the Communist Party of Vietnam, Mr. Chom, who was very keen always to play down confrontation with China and to try and normalize things as much as possible and avoid confrontation. So I just wonder if the two sides came to an understanding about that and why.

But the language and some of the actions coming out of Vietnam have changed since August, since the change in the top of Vietnamese politics. And I just wonder whether this understanding between the two countries is starting to come unstuck at the moment. Well, there's a couple of threads I want to pull on. But let me first go back to the first thread, which is just the idea that

You know, Vietnam and China have figured out something bilaterally. And there was a in the middle of March, there was an article that came out of The Diplomat by a scholar named Kang Bu, who essentially asserted that Vietnam has shown Southeast Asia the way and the way is to resolve your disputes with China bilaterally.

And quietly and for goodness sake, don't involve outside powers like the United States. Do you think that that is a lesson that Southeast Asian nations can take or is it is it transferable to other countries or is Vietnam sort of unique in that sense?

Well, I think there's a few threads there that I could pull out. One is I don't think that that's necessarily true, the case with Vietnam. And then the question, then we can look at some of the other countries separately as well. I mean, Vietnam, despite having what it calls its four no's, no to foreign bases and no to using one, getting involved in other countries' disputes or pulling other countries into your own disputes, that's the sort of the key one.

You know, way back in 1997, when it was locked in a dispute with China over China moving oil rig, the Canton 3, into a piece of sea that Vietnam claimed, you know, Vietnam made a point of inviting, was it the chairman of the Joint Chiefs of Staff, I think, you know, was invited to come to Hanoi.

at that time. This is well before military cooperation had really been talked of. I don't think the U.S. even had a defense initiative. That was clearly an attempt to involve the United States on the side of Vietnam against China way back then. Vietnam has at different times invited

American aircraft carriers to make a port visit at particularly important moments in the confrontations with China.

So the idea that Vietnam doesn't play this game, I think, is simply wrong. Maybe it has played it definitely played it less under Mr. Chom, under the guy who was the general secretary of the Communist Party up until August 2024. But, you know, they also, you know, Vietnam plays the great powers off against each other, tries not to become enmeshed in any of their big plans. Yeah.

and is very careful in calibrating it. You know, it'll send a leader to Washington and send a leader to Beijing and just to kind of make clear that it has options and sort of maintain its autonomy. So the idea, I think, that Vietnam hasn't involved the U.S. in its diplomacy, I think, is wrong empirically. But, you know, I think there was something to be said, you know, that China doesn't like to be embarrassed. You know, it doesn't like to kind of, you know,

feel that it's being mucked around by a smaller power and that there is a space for bilateral arrangements. And Vietnam and China did manage to, for example, resolve their land border bilaterally and they were able to reach a boundary arrangement in the Gulf of Tonkin and then subsequently a fishing arrangement up there bilaterally.

But they haven't been able to work out an arrangement on the Paracel Islands. China says it's not going to talk to Vietnam about that. They just belong to China. That's that. And when you get to the Spratly Islands, you can't really have a bilateral deal because you've got Vietnam, China, but also Malaysia, Philippines, and Brunei a little bit, and also Indonesia in terms of maritime resources all involved. So there can't be a straight bilateral deal.

solution uh in in the spratly islands um so you know there are there are some things that you can talk to china about bilaterally but it's limited geographically i think and also in terms of um the subject areas that it would cover i might find so interesting about your thought that uh

basically Vietnam and China have agreed, all right, you don't explore for oil, we want to explore for oil, and we can have at least a temporary ceasefire. But if that's a model for the region, everyone gives up some sovereignty in return for lack of clarity. Is that what you think this is about? Well, you have two different models really going on here. So you have

Vietnam, and to a greater extent, I think the Philippines that have gone toe to toe with China, if you like, both in terms of their public statements and in terms of some of their actions on the sea. And the Philippines has been much more willing to go into confrontation with China, as we have seen in the past year, at least, in terms of actually highlighting what China has been doing, trying to embarrass it into backing off.

And yet both Vietnam and the Philippines have been blocked by China from developing their gas reserves in their exclusive economic zones.

The Philippines went to the International Arbitral Tribunal and won a famous victory over China. Basically said, yes, you, the Philippines, have the rights to this gas and not China. But yet the Philippines has not been able to develop that gas field. And Vietnam in 2018, 19 and then 2020 won.

basically was intimidated, I think, I'm told, under the threat of conflict with China to stop drilling for gas at the edge of its exclusive economic zone. So those two countries have stopped. Meanwhile, Indonesia and Malaysia have not really made much of a public fight with China, but they have been quietly getting on with drilling new oil and gas wells.

protected by their navies. And so the sort of question is how have Malaysia and Indonesia

got away with this? Have they also reached an agreement or is it simply that they are more willing to take a risk because they both have more capable naval forces willing to actually protect their oil and gas vessels and go toe-to-toe with the Chinese vessels? Have they made a deal that involves other parts of their bilateral relations with China to do with investment and trade or something like that? So that's kind of one of these

These mysteries really of exactly kind of, and the answers presumably lie, you know, deep inside the foreign ministries of Indonesia and Malaysia. And I haven't really found a convincing explanation, you know, other than, you know, we just have a sort of working relationship.

You know, what's interesting about that is that in May of 2023, so almost two years ago, with SeaLight, I was live tracking a survey vessel surrounded by essentially a flotilla of China Coast Guard and maritime militia ships that spent a month essentially making a pattern off of Vanguard Bank in southwest, excuse me, southeast China.

coast of Vietnam and every Mandarin speaker I've shown that pattern to says oh that's Chong that means China so basically they spent a month driving in you know with a dozen ships driving in you know this pattern to do nothing but say China at Vanguard Bank I wonder what message Hanoi took from that

I think that sounds like a pretty clear message. They were writing the Chinese character for Jong. And doing it on the vanguard bank, which is an area of shallow sea. The bank is literally a sand bank that rises quite close to the surface. It's an area on which Vietnam has built some of these stilt platforms.

But it's also an area which way back in the early 1990s, China allocated an oil block to actually an American company there and declared this to be an oil block under Chinese jurisdiction within its nine-dash line claim. And I imagine, although I haven't seen the tracks you mentioned, Ray, but I imagine that

that they made a point of going quite close to the edge of the U-shaped line and then turning around and going back again. And it seems that even though this arbitral tribunal that I mentioned before ruled that this nine dash line has no validity in international law,

it's clear that bits of the Chinese government regard it as some kind of boundary because we're seeing time and time again that when the Coast Guard or other Chinese vessels do sort of patrols and surveys, they go up to the edge of the Nine-Dash Line and then they turn around and go back again. So it seems to be sort of, you know, staking a claim, this is China. And obviously drawing a Chinese character like that, you know,

is a pretty obvious demonstration. Also shows that they know that they're being tracked by AIS and making a virtue of it. Ray gets haircuts with designs like that on the back of his head, so we all understand how that works. Turn around, Ray. We don't let him do that. So the other possibility, I suppose, for the

modus vivendi between China and Vietnam is they're both Communist Party controlled entities. And in fact, as you wrote about a year ago, the new leadership of the Vietnamese Communist Party is much more hard line. Is there a possibility that party to party they've agreed we need to show some unity? It's really interesting. And

The way that the new leadership of Vietnam has behaved since August is not what I was expecting, I should be honest there. I mean, Mr. Thalum, who is the general secretary of the Communist Party, he's the number one guy, he rose up through the Ministry of Public Security. And it's the police, but it's also the sort of the secret police, the intelligence service as well. It describes itself as the sword and shield of the Communist Party.

And it was the bit of the government that implemented the anti-corruption strategy and was really firm, almost vicious in taking down people who were corrupt, but also people who were perceived as being politically on the wrong side, in the wrong faction, or maybe just simply personal rivals of Tolan himself.

And so he sort of came up, you know, he's a policeman, you know, he's there, you know, strict party orthodoxy. That's the way he's always sort of behaved. And yet when he pops out at the top of the pile in August, having, you know, pushed all of his rivals to the side, he suddenly starts appearing with the previous prime minister, Nguyen Tan Dung, the guy who was pushed out of power in 2016, and

for being a liability and too willing to tolerate corruption, too close to the US, all that kind of stuff. And it suddenly made us all think, wow, was this

some kind of strategy all along to Mr. Zong plotting his return to power, keeping quiet, working with To Lam to guide him to the top. Suddenly, now we have a new approach. I think this was exemplified in that last summer when To Lam went to the U.S.,

He was due to give a speech. He gave a speech at the United Nations General Assembly. But before that, he gave a talk at Columbia University and he did a Q&A with students at Columbia University. Now, no other general secretary of the Communist Party of Vietnam has ever done anything like that in terms of being open and accessible. And then he started, you know, more.

recently to start saying things about China, which are much more, far more critical than the kind of things his predecessor would have said. There was a bit more commemoration this year of the 1979 war with China. Things that, you know, a bit more discussion about things that were happening in the South China Sea. So it looks like he is

breaking from the mode of Vietnamese relations with China over, say, the last eight years. And he's more like what was happening before then at a time when there was a more open discussion in Vietnam of disputes and differences with China and more of a willingness to

to talk to the US about some of these things. So I have to confess to being surprised by the way things have turned out. I mean, it's not like a wholesale switch, but definitely some of the language and the actions and the gestures from Tulum and the current leadership are noticeably different from what was happening before August 2024.

So the defenestration of Nguyen Thanh Dung as prime minister, as you mentioned, in 2016, was kind of seen by a lot of people as...

a turn away from more of the West and, you know, kind of a return to a more hardline communism. Although, I mean, certainly I'm sure he was, you know, he had plenty of corruption to pick at. But, and so then we had, we've also, you know, kind of coinciding with that. And then coming forward, we had this very long extended premiership of Nguyen Phu Trong as the party chief.

Up until his death last year. So now, I mean, looking back on it, you know, was Wen Fuchong, was his long tenure as party chief, was that essentially as hardline as maybe they've been? And we've sort of, you know, we're sort of returning to maybe to the level that we were before?

I think so. I mean, I think you get these pendulum swings in Vietnamese politics. And I would compare what happened in 2024 with what happened since 2000, 2001. You had a... In both periods, you had a real...

push to the sort of more orthodox communism the party must be the greatest thing in the country no individual politician can be greater than the party we don't want any stars uh we don't want any kind of um people freelancing in policy you know kind of going too far to the americans or whatever we just we don't we need a you know a leninist party where we're all disciplined um

And that went pretty far. And the consequence of that, particularly the anti-corruption campaign recently, was a real slowdown in the ability of the state to take decisions. Everybody was looking over their shoulder, unwilling to sign contracts or anything. There were some stories that Ho Chi Minh City had only dispensed a quarter of its budget

almost at the end of the financial year because nobody wanted to put their names on a contracting case that they then found guilty of corruption later. The economy was doing quite well because a lot of firms are leaving China and investing in Vietnam as a China plus one strategy. So that actually kept economic growth going up quite well. There were lots of things in the country that were not working.

And so what we've seen really since August and the change of leadership at the top is a kind of snap back, you know, to kind of relax all of those controls. Basically, instructions from the top, you know, get out there, get things done. Let's finish this new airport in Ho Chi Minh City. You know, let's finish these other infrastructure projects. Let's get things moving. And I guess the subtext is going to have to be, and if corruption rises, you know, we'll tolerate it a bit more. Because that was clearly...

what Mr. Zong's, Wintan Zong's approach was. And it got out of hand in sort of the 2014, 2015, 2016 period, which triggered the whole anti-corruption thing and the blazing furnace anti-corruption campaign. And now it seems the pendulum has flipped the other way and it's, you know, Mr. Tolum is talking about targeting 8% economic growth and we've got to meet, you know,

upper middle income status by a certain date. And it was all guns blazing. So the question is, can they do that and also stop the corruption and all the rest of it that exploded the last time they tried this? Now you've now hit on my sweet spot, which is Ray likes to say I'm an econ weenie. This is the last of the econ weenie questions. So Vietnam's achieved...

Great success bringing in, as you said, factories that were in China to get around U.S. trade sanctions and have the China plus one factory approach. You may have noticed that President Trump doesn't much like imports. And Vietnam has been mentioned by Treasury Secretary De Sint as one of the so-called dirty 15, which runs big trade surplus with the U.S. and therefore will likely be targeted.

So I guess the question is, oh, and also accusing China, Vietnam of transshipping Chinese goods to get around our tariffs on Chinese tariffs. So what will be the impact on Vietnam's economy if we start tariffing them at 20, 25 percent? What will that do to the relationship just overall between the U.S. and Vietnam and between Vietnam and China?

Yeah, I mean, this is the massive question. And of course, we're recording this, you know, a few days before April the 2nd, which is when we expect some massive changes coming out of the... Liberation Day. And actually, I should say that right now, although I normally live in the UK, I'm actually in Canada right now. Two countries that are kind of nervous about this, you know, what's coming. Wait, I'm sorry. That's the 51st state. No, no, that's...

There might be people around who can hear me or hear you rather. So, yeah, this is going to be a big thing. And you can, I mean, you mentioned, you know, the dirty list. I mean, Vietnam is the fourth largest, has the fourth largest trade surplus with the US. So it's, you know, it's going to be pretty high up on that list for targeting. Yeah.

And if you look at the graph showing the increase in the Vietnam trade surplus with the US, you'll see it mirrors very closely the Vietnam trade deficit with China. And so some of that may be people cheating the system and simply saying,

taking it out of one box and putting it in another box and calling it assembly and sending it to the US. You know, just you just routing Chinese made products via Vietnam. Maybe there's some of that. But at the same time, there has actually been a lot of Chinese investment in Chinese companies investing in Vietnam.

to try and avoid these kind of tariffs but of course it just means that President Trump has noticed this and the attentions of the pro-tariff people is moving to Vietnam as well and

So, yeah, there is, I mean, a lot of this in Vietnam, particularly in northern Vietnam, is increasingly integrated into supply chains which straddle the border. I mean, it's, I think, a 12-hour drive from, you know, kind of, you know, some of those business parks in northern Vietnam to Shenzhen in China. And so it's not too difficult for, you know, the companies that make phones and computers and whatever to kind of move components around.

around. Increasingly, there is real production or real assembly in Vietnam. It's not just putting it in a new box or whatever. But Vietnam does have a massive trade surplus with the US, which is balanced out by its massive trade deficit with China.

What will it mean? Well, China is, so Vietnam is already, you know, reaching out to the White House, talking about, you know, I think it's agreed new purchases of gas from the United States, liquefied natural gas. There'll be some orders for Boeing, I'm sure, and anything they can do, some sort of big ticket purchases that will look

like Vietnam, is making an effort to balance this trade surplus. One of the biggest Vietnamese companies is Vingroup, has a car manufacturer, Vinfast, which made a big deal about investing in production in the United States, creating jobs. It hasn't gone terribly well, but it's obviously a sign that Vietnam is trying to lever it up

private sector into making a contribution. And then, of course, there's the famous offer to Mr. Trump of having a golf resort in Vietnam as well, whether that will sway him. But you're right. I mean, if tariffs go up a lot and demand goes down, then Vietnam is going to have a problem in terms of employment and revenues and all that kind of stuff. So they are worried.

So I want to take advantage of this opportunity while you're on to talk a little bit about the Mekong River Delta. And as you're well aware, there's a lot of damming happening along the very, very long Mekong, which goes through Cambodia, Laos, China, some into Thailand. And I think the number that they've come up with for the number of completed and planned dams all along the Mekong and its tributaries is something over 1,000.

And recently, the Stimson Center reported that they had like a record release from the largest dam up in China. And this is causing the Mekong to rise instead of fall at a time when it's supposed to be falling. Mm hmm.

I just want to ask a more general question. What does the Mekong River mean to Vietnam specifically? And what are its concerns with the damming and what's happening? Well, I mean, the Mekong is the life of southern Vietnam, really. I mean, the...

the alluvium that is carried down the Mekong made the fields in which the rice grows in the south the annual flooding each year

used to clean out all the seawater and bring new fertilizer down from upstream, renew the productivity of the land. And then you had intensively cropped areas of rice, three crops a year in some cases, which supported a big population.

and made Vietnam second or third largest rice exporter in the world. So, you know, and, you know, it's the means by which people move around. And to some extent, you know, there's, you know, trade going up and down the river, at least into Cambodia. So it's, you know, and I guess it's spiritually, you know, that kind of in the South, you know, the Mekong,

is the soul of the South in many ways. So, yes, losing that annual flow and flood and then the dry zone because of the dams upstream stops all that renewal of the land. You're starting to get saltwater intrusion, brackishness, loss of agricultural productivity, all the rest of it.

I mean, it's so flat down there that if you go to the city of Kandur, which is 50 miles from the sea, it's still tidal. You can sort of see the river going up and down because the land is so flat. These are all areas at risk from rises in sea level and from storm damage and all the rest of it. And if you take the Mekong flow down and out of it, then it just makes things worse.

And then, of course, we got the other, I mean, you haven't asked about it, but the possibility of there being the canal that Cambodia might build, which would link the Mekong to the Gulf of Thailand further upstream. Vietnam is concerned about that. And I think, I mean, it's a mega project. Who knows whether it'll actually be built. I mean, and I think it will be possible to build it without...

damaging the Mekong too much, assuming that it's a canal with gates at each end so it's not diverting the entire flow of the river. That's certainly something that Vietnam is concerned about. Slightly further upstream on the Mekong in Cambodia, you have this lake, the Tonle Sap,

And when the Mekong is in flood, the water can't get down to the sea because the channel is narrow. So it backfills the Tonle Sap, this great lake in Cambodia, which provides fish and livelihoods for millions of people. And without this flooding, the Tonle Sap is not flooding and filling as it used to. So it's having knock-on consequences, quite drastic ones for people in Cambodia too.

So the consequences of these dams are cross-border and really potentially quite severe. Well, in theory, Ashan is supposed to be a venue for resolving some of these concerns.

even aside China. How does Vietnam view ASEAN as an entity and are they invested in its future? Vietnam wants ASEAN to do that job and would like it to be more active. The problem, of course, with ASEAN is that it only ever makes agreement with 10 unanimous members. And at the moment, Cambodia and Laos

have been much more willing to be the spoiler countries and much more friendly towards China, if you like. It's a rather crude way of putting it. China has been able to play its relationships with Laos and with Cambodia to block a lot of consensus on ASEAN. I think that's led to a bit of a demoralization among some of the ASEAN states and a much more

openness, much greater openness to using bilateral channels rather than expecting ASEAN to do it. ASEAN still has some

important functions and economically it's vital. There's an ASEAN free trade area. ASEAN is the center of the RCEP, big economic trade zone, which connects China and Korea and Australia and New Zealand. So there's that. ASEAN still plays a sort of geopolitical role in it. It allows

the countries of Southeast Asia to sort of huddle together and fend off some of the pressure from outside, whether it be from China or from the US or anybody else that wants to sort of interfere in internal politics in these countries. So it does play a role. But in terms of taking an assertive position vis-a-vis China, it seems pretty unlikely at the moment.

Well, that leaves us with a lightning round question. Will there ever be a South China Sea code of conduct? Not in my lifetime. I mean, the real problem with, I mean, you know, the CSE is, it's a useful process because it gets the contending states to sit around a table and talk to each other and be nice. And that's better than not talking to each other. Yeah. Yeah.

But there are... I have a question about that. Go on. Is it though? Is it though? I mean, so like, right. You know, if the idea, if the effect is that China basically takes everything and sort of says, well, we'll talk about that in the code of conduct negotiations so that they can just sort of slowly change the facts or quickly change the facts on the ground or the water, essentially play for time by saying, well, we've got these negotiations.

I mean, is the net effect actually positive? I suppose what I would say in response is that the...

It obviously depends what you mean by the status quo, but in terms of the control of island features, you could say arguably the status quo has been maintained. We can argue about Scarborough Shoal, whether the status quo has changed there. We could argue about the relative dispositions in the Philippines, I guess. Yeah.

So, but if there were no conversations, I guess China would still be doing these things anyway. So is it therefore better to have at least some channels of communication? I'll have to sit and meditate on those things for a bit longer.

But what I would say on the code of conduct specifically is that the ASEAN states see the code of conduct as a means of constraining China's behavior.

Whereas I think China sees the code of conduct as a means of constraining the United States behavior, strangely. So they have two incompatible aims. And then when I say, when China wants to use the code of conduct to constrain the US behavior, even that the US is not a party to the code of conduct, but China has been attempting to insert language into the code of conduct, which would say words like, if any...

of the 10 countries of ASEAN or China wanted to have a military exercise with an outside power, all 11 countries would have to agree. Or if any of the ASEAN states wanted to do a joint venture with an oil company, it would have to be an oil company from Southeast Asia or China. So it would be, China would therefore have a veto over the United States presence in Southeast Asia, you know, military exercises, oil and gas exploration, et cetera. And, and,

The Southeast Asian states are not willing to accept that. At the same time, there's, you know, China only wants to talk about the Spratly Islands. Vietnam wants to include the Paracels. Philippines wants to include Scarborough Shoal.

Some of the Southeast Asian states want this code of conduct to be legally binding, whatever that means. And these same issues go round and round and round and round. They've been going round and round and round for nearly 25 years without resolution. So either the Southeast Asians buckle, give up, and we have a China COC, which damages the Southeast Asian states' position

Or I think the talks just carry on going on forever. I mean, for a long time, the COC process went nowhere.

And then I think it was the first time that the Quad started to be talked about. And it looks like ASEAN's role in the South China Sea was coming under threat from this new organization. And all of a sudden, China started to move on the COC because it looks like there were other things going. And then with the arbitral tribunal, it was

There was another attempt by China to say, look, we can manage this internally. We don't need this international law stuff. So China was only really moved on the COC when the process itself has come under challenge from some outside activity, whether it be the Quad or the legal case or whatever.

So I think we'll be talking about this when you interview me next time and the next time and the next time. Yeah, I'm afraid the holy writ of us in centrality was...

attacked by the idea of the quad. So Askin also was interested in moving things forward, trying to acquiesce or agreed, but actual progress is the exact same. So yes, Ray will be a great grandfather before anything happens. That'll be decades and decades. Come on, kids.

All right. Well, so I think we're coming up on time. So, Bill, where can people follow you and what are you working on? Right. Well, I'm on Twitter, Bill Hayton with an underscore in the middle. I'm an associate fellow at Chatham House, occasionally produce some outputs there. I'm trying to write a new book, a history, a broader history of East Asia. But it's taking its time.

And, you know, I'll try and chip in so whenever, you know, I can be useful on South China Sea, Southeast Asia matters.

And you have been since unbanned from going to Vietnam, right? Yeah, I had a little difficulty getting into the country until 2015. But then they decided they liked my South China Sea stuff more than they disliked some of the things I said about Vietnam. So I got on quite well. I sat next to the ambassador in London at an event a few weeks ago. So there's no hard feelings as far as I'm concerned. Well, you're welcome in the U.S., even if you are in Canada.

Well, I'll be getting it without a passport at 51st State. I'll see if I can get in safely. All right. Well, Bill Hayden, it's been a pleasure. We do look forward to having you back. Thank you again, sir. Thanks a lot, Ray and Jim. Thank you.

Well, that was fun, Jim. But at first we have to remind our listeners about our great sponsor, Bauer Group Asia, a strategic advisory firm that specializes in the Indo-Pacific and applies unmatched expertise and experience to help clients navigate the world's most complex and dynamic markets. And I think, Jim, that Vietnam certainly qualifies as one of those. And I wouldn't want to go into Vietnam as a business without having somebody to advise me who knew the market.

Jim Caruso, by the way, my co-host, is a senior advisor with Bauer Group, and you can find their website at BauerGroupAsia.com. Actually, it's interesting. Bauer Group had a European company asking where they should move a factory from China within ASEAN, and they chose Vietnam. So at least one instance that I'm aware of. It is a very attractive place to do business because the government

more or less works. Corruption isn't too big a problem. And they're anxious for the foreign investment. And they had a very good relationship with the U.S. The U.S. wanted to do more with Vietnam. So it all came together. The question is, Ray, what happens next? Well, I mean, I think, so, you know, Vietnam has long,

been an advocate or a proponent of this idea of bamboo diplomacy. You sway with the wind. You don't take a hard line either way. You sort of

put your finger on the wind and you see where things are going and you just position yourself in the center of wherever that is. So I, I am pretty sure that as they take the temperature of you know, Donald Trump's 2.0 administration and the way they're approaching tariffs, they're going to try to figure out that the way they can get themselves as close to the center of where they can continue to make as much money as possible. And yet not, you know,

put themselves sort of, you know, afoul of either the Trump administration or Xi Jinping. You know, so I mean, that's, they have done this for a very long time and they are used to positioning themselves this way. All right. So you, we worked and lived in Vietnam for three years. Our analysis is that Trump will apply tariffs before negotiations. He'll hit them with something. How will Vietnamese respond to just being hit with tariffs and say, okay, now we negotiate now that we have

the upper hand. I think they'll do it in a measured way, which is how they do it, right? That is one benefit of their system. You know, it is a Communist Party-led single-party state system with somewhat

diffuse and a little bit opaque governing structure. Right. So you don't tend to have and nobody's on Twitter. Right. Nobody is just blurting things out. Everything they say essentially is measured. And I mean, this is my life in Hanoi was I would go to meetings with my counterparts in the Ministry of Defense and I would say, here are some things we would like to do. And they would take a

Very, very, very detailed notes.

And then they would say, thank you very much. And I would go away. And then some weeks later, we would come back together and they would come in with an order. And the order would say, these are the things that we will do. And it had clearly gone all the way up to the Central Military Commission, perhaps had input from the Politburo, and then eventually come all the way down. So nobody comes out and says, this is the answer immediately, right? It's all goes into the decision-making body

Nobody pops off. So, I mean, I think they will respond in a way that they judge is best for them. Well, I hope we have enough LNG and Bowens to...

make it all right. Yeah, I will say as a person who is closely related to somebody who works for Boeing, it's good that Boeing has this sort of, you know, otherworldly political capital that it is the thing that you buy when you want to prove that you're buying American. Just get some more Boeings. Yes, although...

I sometimes worry how much foreign input is into a Boeing, but we'll talk about that in another account. And of course, you know, it doesn't hurt that when you unveil your new fighter jet, that you name it after the 47th president of the United States. So, you know, they definitely understand how to play the game as well. It's quite a game. Speaking of games...

You have a story about Vietnam? I do. So it was about 2015, and we brought in a plane load of doctors and engineers to do an outreach, essentially a humanitarian outreach from the Pacific Air Forces called Pacific Angel.

And we flew in all of these. So the plan was you fly all of these people into Da Nang and then you drive them south in, you know, to Quang Ngai, which is in the old South Vietnam, right? And it's kind of a little bit of a backwoodsy place. You know, they don't see a lot of outsiders. The hotel we were in was certainly not the Ritz Carlton. And.

And the people that we encountered, if they did see, say, Caucasians, they would say maybe Russians from time to time. But they certainly would not see, you know, 100 U.S. military personnel. So we were quite the spectacle.

So I got there early being the heir attache and I had a meeting with the advanced team. We would call it the advon. And we all sat around this big long table and talked about what we were going to do with this outreach and how we would set up the clinics and, you know, where the doctors would come from and how the flow would go and all of those things that you do. And, um,

There was a Fulbright scholar from the United States who happened to be at the local university. She had a fellowship there and she was working there at the local university in Kwong Nga. And she had asked if she could come help. Sure, why not? The more the merrier, right? So as the meeting is breaking up, she says, well, you know what I should do?

My friend, the professor, knows all the great Vietnamese restaurants around here. Vietnamese restaurants are all Vietnamese restaurants. He knows all the great restaurants around here. I'll ask him where we should eat. OK, so she gives him a call and he comes down on his motorbike and we're talking to him. And so we're trying to figure out what the best restaurant is. And at a certain point, I turn around and he he has vanished.

Now, his motorbike is still there, but he is gone. And so I said, well, where's the professor? And so finally somebody points, and these three public security officers have appeared out of the woodwork and dragged this poor guy off to the side. And they're sitting around the table talking to him and pointing in his face. And I thought, oh, boy. So I got my – there's the Ministry of Public Security, of course, besides the –

being in charge of sort of keeping the peace is also in charge of keeping their eye on people like us. So I grabbed my translator and I walked over there. And by the way, in central Vietnam, it's sort of like being in, I don't know, upper Alabama. They speak a form of English there, right? They speak a form of Vietnamese in these parts of Vietnam, but they were difficult even for my translator to understand. So we're sitting down and I handed them my business card and I said, maybe we should talk.

So they shoo the professor away, and I said, what is going on? And they said, where were you going? And I said, dinner. And they said, we thought you would eat dinner in the hotel. And I said, no, that's not really our plan. There are lots of great places to eat in your lovely town. You know, we'd like to go to one of those. And they said, this was not on the schedule. I said, well, we will eat dinner every night.

So you went around and around for like 45 minutes. And it took us a day really to completely unwind the thing. And, you know, I have these phone calls with the people, the local people's committee. And look, you know, we are not here to spy on you.

We are truly, honestly here to do a humanitarian outreach. Can you please just sort of dial it back a little bit? So we, you know, for the most part after that, things went okay. But it was a reminder that there was sort of the combination of a reminder. This is still a communist party led state. And this is also a part of Vietnam where y'all ain't from around here. We were definitely a sight to see.

I think the lesson I take is either Kentucky Fried Chicken would be done with it.

Well, actually, we had to kind of tell people to be a little careful in that region. You may be familiar with the massacre at My Lai during the Vietnam War, which was perpetuated by some U.S. soldiers on the local population. That happened in Quang Ngai province. And there were some people who had some ideas about going down to My Lai with perfectly honorable intentions to see the commemoration and maybe pay their respects.

And we kind of had to tell them, you know, look, we'd love to let you do that. And if you were on here on vacation, sure. But, you know, with all the attention we're getting, we don't want we don't want the story to change from what we're doing to all of a sudden this thing when nobody's had a chance to think through how this might go. Especially if it's not scheduled. Yeah. Yes, exactly. Exactly.

So, yeah, no, it was, I mean, it was, it turned out to be a great event. And, but, you know, there, we had actually, you know, one or two other little incidents with local public security.

You should wrap it up. I got to go. Okay. Well, then we should go. And we want to thank our producer, Ian Ellis Jones and IEJ Media. Jim is leaving and I am still talking. And we're thought we... Bye, Jim. And so Ian's great military and geopolitical graphics can be seen at Ian Ellis Jones. If you enjoyed this episode, make sure you subscribe and follow. You can follow us on YouTube at youtube.com.

At IP Podcast, Jim's departure has completely flustered me. Look, he's right back here. Jim, what are you doing? You caught me alone in the house and I had to pay someone some money. Oh, all right. Well, welcome back. All right. You can also follow us on audio. And that's, of course, Apple Podcasts or Spotify. That's the way I like to listen to podcasts.

If you are interested in Vietnam, you should definitely go back and listen to episode 32. That was one of my favorites. We talked about why should we care about human trafficking in Vietnam, which sounds very dark, and it is. But actually, there were some good news stories in there because we talked to the leader of Blue Dragon, Michael Brasowski, and the rescue operations that they conducted. And so that was really a great and I think very underrated episode, episode 32.

Finally, you can reach out to us on email, indopacificpodcast at gmail.com. And you can see our, make sure you go and visit our sponsor at powergroupasia.com. To the newly returned Jim, thank you for joining me, sir. To Ian, our producer, we always appreciate all that you do for us. And to our audience, we really value you. Thanks for joining us this time. And we'll talk to you again next time at Why Should We Care About the Indo-Pacific.