Thayer Consultancy

ABN # 65 648 097 123

Background Brief Vietnam: Chinese Premier Li Keqiang to Visit Carlyle A. Thayer October 13, 2013

[client name deleted] China's Premier Li Keqiang is visiting Vietnam today and will meet Prime Minister Nguyen Tan Dung. The two are scheduled to sign some economic cooperation agreements. Could you provide an assessment on where the relations between Vietnam and China are now, and what the visit could produce? ANSWER: Premier Li Keqiangs visit gives recognition to Vietnams role as an important strategic actor in Southeast Asian affairs. China-Vietnam relations have already been raised to that of a comprehensive strategic partnership. Under the framework of this agreement the two sides regularly exchange high-level visits. This is an important occasion for Premier Li to meet Prime Minister Dung officially in his capacity as head of the Chinese State Council and to reassure Vietnam of Chinas peaceful intentions. Vietnam and China have succeeded in compartmentalizing their dispute over the South China Sea from their broader bilateral relations. China is seeking to enhance the China-ASEAN Free Trade Agreement. Vietnam has a large trade deficit with China. The two leaders will discuss further economic cooperation. China may pledge further investment in Vietnam. Premier Li is likely to press Vietnam to enter into joint development in the South China Sea. Vietnam will want to know the details of where this joint development is being proposed. Both sides will reaffirm their commitment to continue consultations on a Code of Conduct within the framework of the Declaration on Conduct of Parties in the South China Sea (DOC) on the basis of consensus. In other words there will be no major change from present Chinese policy on this matter. The most important outcome of this visit will be the private discussions between Premier Li and Prime Minister Dung, plus the shorter discussions he will hold with party Secretary General Nguyen Phu Trong, President Truong Tan Sang and Chairman of the National Assembly Nguyen Sinh Hung. Vietnam will learn more about Chinas current policies under President Xi Jinping especially towards ASEAN and Southeast Asia. Vietnamese leaders will be better able to gauge Chinese intentions. This visit could also result in an invitation for further high-level visits.

2 Suggested citation: Carlyle A. Thayer, Vietnam: Chinese Premier Li Keqiang to Visit, Thayer Consultancy Background Brief, October 13, 2013. All background briefs are posted on Scribd.com (search for Thayer). To remove yourself from the mailing list type UNSUBSCRIBE in the Subject heading and hit the Reply key. Thayer Consultancy provides political analysis of current regional security issues and other research support to selected clients. Thayer Consultancy was officially registered as a small business in Australia in 2002.

Thayer Consultancy
ABN # 65 648 097 123

Background Brief Vietnam: Chinese Premier Li Keqiang to Visit - 2 Carlyle A. Thayer October 11, 2013

[client name deleted] Q. Next week, Chinese Premier Li Keqiang will visit Vietnam, from 13-15 October. We request your assessment in advance of the premiers visit on the likely issues to be discussed and possible outcomes. ANSWER: China has timed its diplomacy in Southeast Asia to coincide with the major ASEAN-led summits held this time of year. In addition, China is paying special attention to bilateral relations. Premier Li Keqiang and his counterparts in Indonesia and Malaysia, respectively, have agreed to raise their bilateral relations to comprehensive strategic partnerships. Premier Li has also offered to sign with ASEAN a Treaty of Good Neighbourliness, Friendship and Cooperation. China and Vietnam have already raised their bilateral relations to a comprehensive cooperative partnership. Premiers Lis visit is in accord with cooperative agreements signed in 1999 and 2000, and subsequently, to continue high-level exchanges. Premier Li will use his visit to explain Chinas new diplomatic approach to Southeast Asia and solicit Vietnamese support. No doubt he will press Vietnam to enter into joint development in the South China Sea in order to reassure other Southeast Asian countries of Chinas peaceful intentions. Most basically, Vietnam has emerged as an important strategic player in Southeast Asia and China cannot afford to neglect its relations with Vietnam. More generally, Chinas new conciliatory approach to Southeast Asia appears to be the product of its new leadership, especially President Xi Jinping and Foreign Minister Wang Yi. China is trying to reassure Southeast Asia of its peaceful rise and overcome the negative reaction to Chinas assertiveness in the South China Sea in recent years. China wants to give priority to economic relations and keep the South China Sea from harming these relations. Lis proposal on a Treaty of Good Neighbourliness, Friendship and Cooperation is an initiative that contains an element of exclusivity China and ASEAN. It is an attempt to demonstrate that China is part of the region and, without saying so, that the United States is an outside power. Chinas overriding concern is to see Southeast Asia stable and peaceful. China has enormous interests in access to the regions natural resources. China needs to shore

2 up and cement good political relations with all Southeast Asian countries as an antidote to U.S. presence and influence. In order to achieve this objective China must work with Southeast Asia multilaterally through ASEAN and bilaterally including Vietnam.

Suggested citation: Carlyle A. Thayer, Vietnam: Chinese Premier Li Keqiang to Visit 2, Thayer Consultancy Background Brief, October 11, 2013. All background briefs are posted on Scribd.com (search for Thayer). To remove yourself from the mailing list type UNSUBSCRIBE in the Subject heading and hit the Reply key. Thayer Consultancy provides political analysis of current regional security issues and other research support to selected clients. Thayer Consultancy was officially registered as a small business in Australia in 2002.

Thayer Consultancy
ABN # 65 648 097 123

Background Brief Chinas Premier Li Keqiang Visits Vietnam 3 Carlyle A. Thayer October 13, 2013

[client name deleted] We request your assessment of the following issues: Q1. Could you please assess Chinese Premier Li Keqiang's state visit to Vietnam? ANSWER: Premier Le Keqiang is visiting a number of countries in Southeast Asia including Brunei, Indonesia, Malaysia and Vietnam. His visit to Vietnam is part of a long-standing agreement between the two countries to exchange high-level visits in order to keep developing bilateral relations and to address outstanding issues. Q2. What's the significance of Premier Lis state visit to Vietnam for Sino-Vietnam relations? ANSWER: Vietnam will accord Premier Li red carpet treatment. He is due to hold talks with Prime Minister Nguyen Tan Dung and then pay courtesy calls on the top leadership including party Secretary General Nguyen Phu Trong, state President Truong Tan Sang, and Chairman of the National Assembly Nguyen Sinh Hung. The significance of his visit is that he will reassure Vietnam of Chinas intention to promote peaceful relations. Q3. What impact will Premier Lis visit have on China-ASEAN relations? ANSWER: Premier Lis visit is primarily to advance bilateral relations. It is taken in t he context of the comprehensive strategic partnership between China and ASEAN. China-ASEAN relations have been taken a step further with the visit of President Xi Jinping to Brunei, Indonesia and Malaysia. Premier Li will be able to promote the treaty of friendship and cooperation proposed by President Xi. Q4. What progress can we expect from Premier Li's state visit to Vietnam regarding the Code of Conduct in South China Sea (COC)? ANSWER: China-ASEAN consultations on the Code of Conduct are being undertaken primarily at the working group level with the next meeting scheduled for early next year in Thailand. Premier Li can be expected to provide reassurances that China is willing to consult on the COC within the framework of the Declaration on Conduct of Parties on the basis of consensus. In other words Premier Li is not expected to undertake any new initiative. In private discussions he is likely to suggest past proposals for joint development. He may also lobby Vietnam not to support the

2 Philippines and its legal action before the UN Arbitral Tribunal. Premier Li and his host can be expected to discuss progress in government level talks on the waters forming the mouth of the Gulf of Tonkin (Beibu). Q5. What results can we expect from this visit? ANSWER: Premier Li and Prime Minister Dung will sign an important document that is likely to list goals across a number of areas to advance their bilateral relations, including economic relations. Q6. Why did Premier Li choose Vietnam as the final stop in his visit to Southeast Asia? ANSWER: Vietnam is an important emerging strategic country in Southeast Asia. China and Vietnam have already adopted a clear framework for their bilateral relations. This is an opportunity for Premier Li to visit in his new capacity and to meet with his Vietnamese counterpart. No doubt geography played a role. While Vietnam is the last stop and old English language expression is last but not least. Premier Lis visit recognizes Vietnams importance in regional affairs.

Suggested citation: Carlyle A. Thayer, Chinas Premier Li Keqiang Visits Vietnam 3, Thayer Consultancy Background Brief, October 13, 2013. All background briefs are posted on Scribd.com (search for Thayer). To remove yourself from the mailing list type UNSUBSCRIBE in the Subject heading and hit the Reply key. Thayer Consultancy provides political analysis of current regional security issues and other research support to selected clients. Thayer Consultancy was officially registered as a small business in Australia in 2002.