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U.S. Department of State

Diplomacy in Action

Vietnam (06/03/11)


June 3, 2011

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For the most current version of this Note, see Background Notes A-Z.

PROFILE

Geography

Area: 331,114 sq. km. (127,243 sq. mi.); equivalent in size to Ohio, Kentucky, and Tennessee combined.
Cities (2009): Capital--Hanoi (pop. 6.472 million). Other cities--Ho Chi Minh City (formerly Saigon; pop. 7.163 million), Haiphong (pop. 1.841 million), Danang (pop. 890,500), Can Tho (pop. 1.189 million).
Terrain: Varies from mountainous to coastal delta.
Climate: Tropical monsoon.

People
Nationality: Noun and adjective--Vietnamese (sing. and pl.).
Population (2011): 90 million.
Annual population growth rate (2011): 1.077%.
Ethnic groups (2009): 54 groups including Vietnamese (Kinh) (73.594 million, or 85.7% of the population), Tay (1.89%), Thai (1.8%), Muong (1.47%), Khmer (1.46%), Chinese (0.95%), Nung (1.12%), Hmong (1.24%).
Religions (2008): Buddhism (approx. 50%), Catholicism (8%-10%), Cao Dai (1.5%-3%), Protestantism (0.5%-2%), Hoa Hao (1.5%-4%), Islam (0.1%), and other animist religions.
Languages: Vietnamese (official), English (increasingly favored as a second language), some French, Chinese, and other ethnic minority languages.
Education (2009): Literacy--94%.
Health (2011): Birth rate--17.07 births/1,000 population. Infant mortality rate--20.9 deaths/1,000 live births. Life expectancy--73 yrs. Death rate--5.96/1,000 population.

Government
Type: Single-party constitutional republic (Communist Party).
Independence: September 2, 1945.
New constitution: April 15, 1992.
Branches: Executive--president (head of state and chair of National Defense and Security Council) and prime minister (heads cabinet of ministries and commissions). Legislative--National Assembly. Judicial--Supreme People's Court; Prosecutorial Supreme People's Procuracy.
Administrative subdivisions: 58 provinces, 5 municipalities (Can Tho, Haiphong, Danang, Hanoi, Ho Chi Minh City).
Political party: Communist Party of Vietnam (CPV) with over 3 million members, formerly (1951-76) Vietnam Worker's Party, itself the successor of the Indochinese Communist Party founded in 1930.
Suffrage: Universal over 18.

Economy
GDP (2010): $102 billion.
Real growth rate (2010): 6.8%.
Per capita income (2010): $1,168.
Inflation rate: 9.19% (average monthly Consumer Price Index of 2010, year-on-year); 12.79% (average monthly CPI through first quarter 2011, year-on-year).
External debt (2009): 39% of GDP, $27.93 billion.
Natural resources: Coal, crude oil, zinc, copper, silver, gold, manganese, iron.
Agriculture, forestry, and fisheries (20.58% of GDP, 2010): Principal products--rice, coffee, cashews, maize, pepper (spice), sweet potato, pork, peanut, cotton, plus extensive aquaculture of both fish and shellfish species. Cultivated land--12.2 million hectares. Land use--21% arable; 28% forest and woodland; 51% other.
Industry and construction (41.09% of GDP, 2010): Principal types--mining and quarrying, manufacturing, electricity, gas, water supply, cement, phosphate, and steel.
Services (38.33% of GDP, 2010): Principal types--tourism, wholesale and retail, repair of vehicles and personal goods, hotel and restaurant, transport storage, telecommunications.
Trade (2010): Exports--$71.6 billion. Principal exports--crude oil, garments/textiles, footwear, fishery and seafood products, rice (world’s second-largest exporter), pepper (spice; world’s largest exporter), wood products, coffee, rubber, handicrafts. Major export partners--U.S., EU, ASEAN, Japan, China, and South Korea. Imports--$84 billion. Principal imports--machinery, oil and gas, iron and steel, garment materials, plastics. Major import partners--China, ASEAN, Japan, Taiwan, South Korea, and EU. Exports to U.S. (2010)--$14.3 billion. Imports from U.S. (2010)--$3.7 billion.

PEOPLE
Originating in what is now southern China and northern Vietnam, the Vietnamese people pushed southward over 2 millennia to occupy the entire eastern seacoast of the Indochinese Peninsula. Vietnam has 54 ethnic groups; ethnic Vietnamese or Kinh constitute approximately 85% of Vietnam's population. The next largest groups are ethnic Tay and Thai, which account for 1.89% and 1.8% of Vietnam's population and are concentrated in the country's northern highlands.

With a population of more than 900,000, Vietnam's Chinese community has historically played an important role in the Vietnamese economy. Restrictions on economic activity following reunification of the north and south in 1975 and a general deterioration in Vietnamese-Chinese relations caused increasing anxiety within the Chinese-Vietnamese community. As tensions between Vietnam and China reached their peak in 1978-79, culminating in a brief but bloody war in February-March 1979, some 450,000 ethnic Chinese left Vietnam by boat as refugees (many officially encouraged and assisted) or were expelled across the land border with China.

Other significant ethnic minority groups include central highland peoples (formerly collectively termed Montagnards) such as the Gia Rai, Bana, Ede, Xo Dang, Gie Trieng, and the Khmer Krom (Cambodians), who are concentrated near the Cambodian border and at the mouth of the Mekong River. Taken collectively, these groups made up a majority of the population in much of Vietnam's central highlands until the 1960s and 1970s. They now compose a significant minority of 25% to 35% of the provinces in that region.

Vietnamese is the official language of the country. It is a tonal language with influences from Thai, Khmer, and Chinese. Since the early 20th century, the Vietnamese have used a Romanized script introduced by the French. Previously, Chinese characters and an indigenous phonetic script were both used.

HISTORY
Vietnam's identity has been shaped by long-running conflicts, both internally and with foreign forces. In 111 BC, China's Han dynasty conquered northern Vietnam's Red River Delta and the ancestors of today's Vietnamese. Chinese dynasties ruled Vietnam for the next 1,000 years, inculcating it with Confucian ideas and political culture, but also leaving a tradition of resistance to foreign occupation. In 939 AD, Vietnam achieved independence under a native dynasty. After 1471, when Vietnam conquered the Champa Kingdom in what is now central Vietnam, the Vietnamese moved gradually southward, finally reaching the agriculturally rich Mekong Delta, where they encountered previously settled communities of Cham and Cambodians. As Vietnam's Le dynasty declined, powerful northern and southern families, the Trinh and Nguyen, fought civil wars in the 17th and 18th centuries. A peasant revolt originating in the Tay Son region of central Vietnam defeated both the Nguyen and the Trinh and unified the country at the end of the 18th century, but was itself defeated by a surviving member of the Nguyen family, who founded the Nguyen dynasty as Emperor Gia Long in 1802.

French Rule and the Anti-Colonial Struggle
In 1858, the French began their conquest of Vietnam starting in the south. They annexed all of Vietnam in 1885, governing the territories of Annan, Tonkin, and Cochin China, together with Cambodia and Laos, as French Indochina. The French ruled Cochin China directly as a French colony; Annan and Tonkin were established as French "protectorates." Vietnam's emperors remained in place in Hue, but their authority was strictly limited as French officials assumed nearly all government functions. In the early 20th century, Vietnamese intellectuals, many of them French educated, organized nationalist and communist-nationalist anti-colonial movements.

Japan's military occupation of Vietnam during World War II further stirred nationalist sentiment, as well as antipathy toward the French Vichy colonial regime, which took its direction from the Japanese until the Japanese took direct control in March 1945. Vietnamese communists under Ho Chi Minh organized a coalition of anti-colonial groups, the Viet Minh, though many anti-communists refused to join. The Viet Minh took advantage of political uncertainty in the weeks following Japan's surrender to take control of Hanoi and much of northern Vietnam. Ho Chi Minh announced the independence of the Democratic Republic of Vietnam on September 2, 1945.

North and South Partition
France's determination to reassert colonial authority in Vietnam led to failed talks and, after armed hostilities broke out in Haiphong at the end of 1946, an 8-year guerrilla war between the communist-led Viet Minh on one side and the French and their anti-communist nationalist allies on the other. Following the French defeat at Dien Bien Phu in May 1954, France and other parties, including Britain, China, the Soviet Union, the United States, and representatives of the Viet Minh and Bao Dai governments convened in Geneva, Switzerland for peace talks. On July 29, 1954, an Agreement on the Cessation of Hostilities in Vietnam was signed between France and the Democratic Republic of Vietnam. The United States observed, but did not sign, the agreement. French colonial rule in Vietnam ended.

The 1954 Geneva agreement provided for a cease-fire between communist and anti-communist nationalist forces, the temporary division of Vietnam at approximately the 17th parallel, provisional northern (communist) and southern (noncommunist) zone governments, and the evacuation of anti-communist Vietnamese from northern to southern Vietnam, as well as the movement of a smaller number of former communist-led Viet Minh anti-colonial fighters to the north. The agreement also called for an election to be held by July 1956 to bring the two provisional zones under a unified government, a provision that the South Vietnamese Government refused to accept, arguing that conditions for free elections throughout Vietnam were not present. On October 26, 1955, South Vietnam declared itself the Republic of Vietnam.

After 1954, North Vietnamese communist leaders consolidated their power and instituted a harsh agrarian reform and socialization program. During this period, some 450,000 Vietnamese, including a large number of Vietnamese Catholics, fled from the north to the south, while a much smaller number, mostly consisting of former Viet Minh fighters, relocated north. In the late 1950s, North Vietnamese leaders reactivated the network of communist guerrillas that had remained behind in the south. These forces--commonly known as the Viet Cong--aided covertly by the north, started an armed campaign against officials and villagers who refused to support the communist reunification cause.

American Assistance to the South
In December 1961, at the request of South Vietnamese President Ngo Dinh Diem, President Kennedy sent U.S. military advisers to South Vietnam to help the government there deal with the Viet Cong campaign. In the wake of escalating political turmoil in the south after a November 1963 generals' coup against President Diem, which resulted in his death, the United States increased its military support for South Vietnam. In March 1965, President Johnson sent the first U.S. combat forces to Vietnam. The American military role peaked in 1969 with an in-country force of 534,000. The Viet Cong's surprise Tet Offensive in January 1968 weakened the Viet Cong infrastructure and damaged American and South Vietnamese morale. In January 1969, the United States, governments of South and North Vietnam, and the Viet Cong met for the first plenary session of peace talks in Paris, France. These talks, which began with much hope, moved slowly. They finally concluded with the signing of a peace agreement, the Paris Accords, on January 27, 1973. The Accords called for a ceasefire in place in which North Vietnamese forces were permitted to remain in areas they controlled. Following the Accords, the South Vietnamese Government and the political representatives of the communist forces in the South, the Provisional Revolutionary Government, vied for control over portions of South Vietnam. The United States withdrew its forces, although reduced levels of U.S. military assistance continued, administered by the Defense Attaché Office.

Reunification
In early 1975, North Vietnamese regular military forces began a major offensive in the south, inflicting great damage to the south's forces. The communists took Saigon on April 30, 1975, and announced their intention to reunify the country. The Democratic Republic of Vietnam (north) absorbed the former Republic of Vietnam (south) to form the Socialist Republic of Vietnam on July 2, 1976.

After reunification, the government confiscated privately owned land and forced citizens to adopt collectivized agricultural practices. Hundreds of thousands of former South Vietnamese government and military officials, as well as intellectuals previously opposed to the communist cause, were sent to study socialist doctrine in re-education camps, where they remained for periods ranging from months to over 10 years.

Expectations that reunification of the country and its socialist transformation would be condoned by the international community were quickly dashed as the international community expressed concern over Vietnam's internal practices and foreign policy. Vietnam's 1978 invasion of Cambodia in particular, together with its increasingly tight alliance with the Soviet Union, appeared to confirm suspicions that Vietnam wanted to establish a Soviet-backed hegemony in Indochina.

Vietnam's invasion of Cambodia also heightened tensions that had been building between Vietnam and China. Beijing, which backed the Khmer Rouge regime in Cambodia, retaliated in early 1979 by initiating a brief, but bloody border war with Vietnam.

Vietnam's tensions with its neighbors, internal repression, and a stagnant economy contributed to a massive exodus from Vietnam. Fearing persecution, many ethnic Chinese in particular fled Vietnam by boat to nearby countries. Later, hundreds of thousands of other Vietnamese nationals fled as well, seeking temporary refuge in camps throughout Southeast Asia.

The continuing grave condition of the economy and the alienation from the international community became focal points of party debate. In 1986, at the Sixth Party Congress, there was an important easing of communist agrarian and commercial policies.

GOVERNMENT AND POLITICAL CONDITIONS
A new state constitution was approved in April 1992, reaffirming the central role of the Communist Party of Vietnam (CPV) in politics and society, and outlining government reorganization and increased economic freedom. Though Vietnam remains a one-party state, adherence to ideological orthodoxy has become less important than economic development as a national priority.

The most important powers within the Vietnamese Government--in addition to the Communist Party--are the executive agencies created by the 1992 constitution: the offices of the president and the prime minister. The Vietnamese President functions as head of state but also serves as the nominal commander of the armed forces and chairman of the Council on National Defense and Security. The Prime Minister of Vietnam heads a cabinet composed of deputy prime ministers and the heads of ministries and agencies, all confirmed by the National Assembly.

Notwithstanding the 1992 constitution's reaffirmation of the central role of the Communist Party, the National Assembly, according to the constitution, is the highest representative body of the people and the only organization with legislative powers. It has a broad mandate to oversee all government functions. Once seen as little more than a rubber stamp, the National Assembly has become more vocal and assertive in exercising its authority over lawmaking, particularly in recent years. However, the National Assembly is still subject to Communist Party direction. More than 90% of the deputies in the National Assembly are party members. The assembly meets twice yearly for 7-10 weeks each time; elections for members are held every 5 years, although its Standing Committee meets monthly and there are now over 100 "full-time" deputies who function on various committees. In 2007, the assembly introduced parliamentary "question time," in which cabinet ministers must answer often-pointed questions from National Assembly members. There is a separate judicial branch, but it is still relatively weak. There are few lawyers and trial procedures are rudimentary.

The Politburo, selected during the Party Congress of the Communist Party of Vietnam and headed by the Communist Party General Secretary, determines government policy; its Secretariat oversees day-to-day policy implementation. In addition, the Communist Party's Central Military Commission, which is composed of select Politburo members and additional military leaders, determines military policy.

A Party Congress meets every 5 years to set the direction of the party and the government. The most recent Party Congress, the Eleventh, met in January 2011. The Central Committee is elected by the Party Congress and usually meets at least twice a year. The most recent Central Committee Plenum also met in January; principal government officials and members of the Politburo were announced the same month.

Principal Government Officials
President--Nguyen Minh Triet
Prime Minister--Nguyen Tan Dung
National Assembly Chairman--Nguyen Phu Trong (also Communist Party General Secretary)
Deputy Prime Minister and Minister of Foreign Affairs--Pham Gia Khiem
Ambassador to the United States--Nguyen Quoc Cuong
Ambassador to the United Nations--Le Luong Minh

Vietnam maintains an embassy in the U.S. at 1233 20th Street, NW, #400, Washington DC 20036 (tel. 202-861-0737; fax 202-861-0917); Internet home page: www.vietnamembassy-usa.org. There is a consulate general in San Francisco, located at 1700 California Street, Suite 430, San Francisco, CA 94109 (tel. 415-922-1707; fax 415-922-1848); Internet homepage: http://www.vietnamconsulate-sf.org. There also is a consulate general in Houston, located at 5251 Westheimer Rd, Suite 1100, Houston, Texas 77056 (tel. 713-850-1233; fax 713-810-0159); Internet homepage: http://vietnamconsulateinhouston.org.

ECONOMY
Following economic stagnation after reunification from 1975 to 1985, the 1986 Sixth Party Congress approved broad economic reforms (known as "Doi Moi" or renovation) that introduced market reforms, opened up the country for foreign investment, and dramatically improved Vietnam's business climate. Vietnam became one of the fastest-growing economies in the world, averaging around 8% annual gross domestic product (GDP) growth from 1990 to 1997 and 6.5% from 1998-2003. From 2004 to 2007, GDP grew over 8% annually, slowing slightly to 6.2% in 2008 and 5.3% in 2009, and then recovering to 6.78% in 2010. Viewed over time, foreign trade and foreign direct investment (FDI) have improved significantly. The average annual foreign investment commitment has risen sharply since foreign investment was authorized in 1988, although the global economic crisis affected FDI in 2009. In 2010, disbursed FDI capital totaled $11.0 billion, up 10% compared to 2009. Registered FDI (including new and additional capital) was $18.6 billion in 2010, a fall of about 20% compared to 2009. In 2010, actual disbursed FDI was $11 billion and registered FDI was $18.6 billion. From 1990 to 2005, agricultural production nearly doubled, transforming Vietnam from a net food importer to the world's second-largest exporter of rice. In 2010, Vietnam’s exports ($71.6 billion) were up by 25%. Vietnam’s imports ($84 billion) were up by 22% from 2009, and the country was still running a structural trade deficit, reaching $12.4 billion in 2010.

The shift away from a centrally planned economy to a more market-oriented economic model has improved the quality of life for many Vietnamese. Per capita income rose from $220 in 1994 to $1,168 in 2010. Year-on-year inflation increased to 11.75% in 2010 from 6.52% in 2009. Experts doubt that the Vietnamese Government can reach its 2011 Consumer Price Index (CPI) target of 7%, given that inflation has remained above target for 4 straight months and April CPI was more than 9%. The average Vietnamese savings rate is about 25% of GDP. Unemployment remains low, but has been rising in recent years. Unemployment was 2.88% in 2010--a slight decline from 2.9% in 2009, but up from 2.4% in 2008--with urban unemployment being higher (4.43% in 2010) than rural (2.27% in 2010).

The Vietnamese Government still holds a tight rein over major sectors of the economy through large state-owned economic groups and enterprises. The government has plans to reform key sectors and partially privatize state-owned enterprises, but implementation has been gradual and the state sector still accounts for approximately 40% of GDP. Greater emphasis on private sector development is critical for job creation.

The 2001 entry-into-force of the Bilateral Trade Agreement (BTA) between the U.S. and Vietnam was a significant milestone for Vietnam's economy and for normalization of U.S.-Vietnam relations. Bilateral trade between the United States and Vietnam has expanded dramatically, rising from $2.91 billion in 2002 to $17.9 billion in 2010. The U.S. is Vietnam's second-largest trade partner overall (after China).

Implementation of the BTA, which includes provisions on trade in goods and services, enforcement of intellectual property rights, protection for investments, and transparency, fundamentally changed Vietnam's trade regime and helped it accede to the World Trade Organization (WTO) in 2007.

Vietnam was granted unconditional normal trade relations (NTR) status by the United States in December 2006. To meet the obligations of WTO membership, Vietnam revised nearly all of its trade and investment laws and guiding regulations and opened up large sectors of its economy to foreign investors and exporters.

A U.S.-Vietnam Trade and Investment Framework Agreement (TIFA), a bridge to future economic cooperation, was signed in 2007 during President Triet's visit to the United States. The first TIFA Council occurred in December 2007 in Washington, and there have been five TIFA meetings since then. During Prime Minister Dung's June 2008 visit, the United States and Vietnam committed to undertake Bilateral Investment Treaty (BIT) negotiations, and have completed three rounds of talks since then.

Agriculture and Industry
As in the rest of Asia, farms in Vietnam tend to be very small, and are usually less than one hectare (2.5 acres) each. Rice and other farm outputs are quite profitable, on a per-kilogram basis, but the total income from these small operations is increasingly insufficient to cover daily household needs. Off-farm income is necessary, and growing in importance. Due to its high productivity, Vietnam is currently a net exporter of agricultural products. Besides rice, key exports are coffee (robusta), pepper (spice), cashews, tea, rubber, wood products, and fisheries products. In 2010, Vietnam was ranked 17 among all suppliers of food and agricultural products to the United States, a strong indicator of Vietnam’s growing importance as a global supplier of key agricultural commodities. Agriculture's share of economic output has declined, falling as a share of GDP from 42% in 1989 to 21% in 2010, as production in other sectors of the economy has risen.

Vietnam's industrial production has also grown. Industry and construction contributed 41% of GDP in 2010, up from 27.3% in 1985. Subsidies have been cut, though state enterprises still receive priority access to resources, including land and capital. The government is also continuing the slow process of "equitizing" a significant number of smaller state enterprises--transforming state enterprises into shareholding companies and distributing a portion of the shares to management, workers, and private foreign and domestic investors. However, to date the government continues to maintain control of the largest and most important companies.

Trade and Balance of Payments
To compensate for drastic cuts in Soviet-bloc support after 1989, Vietnam liberalized trade, devalued its currency to increase exports, and embarked on a policy of regional and international economic re-integration. Vietnam has demonstrated its commitment to trade liberalization in recent years, and integration with the world economy has become one of the cornerstones of its reform program. Vietnam has locked in its intention to create a more competitive and open economy by committing to several comprehensive international trade agreements, including the Association of Southeast Asian Nations (ASEAN) Free Trade Area (AFTA) and the U.S.-Vietnam Bilateral Trade Agreement (BTA). Vietnam's accession to the World Trade Organization further integrated Vietnam into the global economy. In November 2010, Vietnam officially joined the Trans-Pacific Partnership (TPP).

As a result of these reforms, exports expanded significantly, growing by as much as 20%-30% in some years. Exports accounted for about 70% of GDP in 2010. Imports have also grown rapidly, and Vietnam has maintained a structural trade deficit, reaching $12.4 billion in 2010. Vietnam's total external debt, amounting to 39% of GDP in 2009, was estimated at around $27.93 billion.

FOREIGN RELATIONS
During the second Indochina war (1954-75), North Vietnam sought to balance relations with its two major allies, the Soviet Union and China. Tensions with China began to grow during the Chinese Cultural Revolution, and by 1975, Beijing had become increasingly critical of Hanoi's growing ties with Moscow. Over the next 4 years, Beijing's growing support for Cambodia's Khmer Rouge, which in 1978 initiated bloody attacks across its border with Vietnam, reinforced Vietnamese suspicions of China's motives.

Vietnam-China relations deteriorated significantly after Hanoi instituted a ban in March 1978 on private trade, which had a particularly large impact on southern Vietnam's ethnic Chinese community. Following Vietnam's December 1978 invasion of Cambodia, China in February 1979 launched a month-long retaliatory incursion over Vietnam's northern border. Faced with severance of Chinese aid and strained international relations, Vietnam established even closer ties with the Soviet Union and its allies in the Council for Mutual Economic Assistance (Comecon). Through the 1980s, Vietnam received nearly $3 billion a year in economic and military aid from the Soviet Union and conducted most of its trade with that country and with other Comecon countries. However, Soviet and East bloc economic aid declined during the perestroika era and ceased completely after the breakup of the Soviet Union.

Vietnam did not begin to emerge from international isolation until it withdrew its troops from Cambodia in 1989. Within months of the 1991 Paris Agreements, Vietnam established diplomatic and economic relations with ASEAN, as well as with most of the countries of Western Europe and Northeast Asia. China reestablished full diplomatic ties with Vietnam in 1991, and the two countries began joint efforts to demarcate their land and sea borders, expand trade and investment ties, and build political relations.

Over the past decade, Vietnam has recognized the increasing importance of growing global economic interdependence and has made concerted efforts to adjust its foreign relations to reflect the evolving international economic and political situation in Southeast Asia. The country has begun to integrate itself into the regional and global economy by joining international organizations. Vietnam has stepped up its efforts to attract foreign capital from the West and regularize relations with the world financial system. In the 1990s, following the lifting of the American veto on multilateral loans to the country, Vietnam became a member of the World Bank, the International Monetary Fund, and the Asian Development Bank. The country has expanded trade with its East Asian neighbors as well as with countries in Western Europe and North America. Of particular significance was Vietnam's acceptance into the Association of Southeast Asian Nations (ASEAN) in July 1995. In recent years, Vietnam's influence in ASEAN has expanded significantly; the country took over as Chairman of ASEAN in January 2010, a position it held through the calendar year. In addition, Vietnam joined the Asia-Pacific Economic Cooperation forum (APEC) in November 1998 and hosted the ASEAN summit in 2001 and APEC in 2006. In December 2009, Vietnam completed a 2-year term as a non-permanent member of the United Nations Security Council.

While Vietnam has not experienced war since its withdrawal from Cambodia, tensions have periodically flared between Vietnam and China, primarily over their overlapping maritime claims in the South China Sea. Vietnam and China each assert claims to the Spratly and Paracel Islands, archipelagos in the potentially oil-rich area of the South China Sea. Malaysia, the Philippines, Brunei, and Taiwan also claim all or part of the South China Sea. Over the years, conflicting claims have produced small-scale armed altercations in the area; in 1988, 70 Vietnamese sailors died in a confrontation with China in the Spratlys. China's assertion of "indisputable sovereignty" over the Spratly Islands and the entire South China Sea has elicited concern from Vietnam and its Southeast Asia neighbors. Tensions escalated in the latter half of 2007 as, according to press reports, China pressured foreign oil companies to abandon their oil and gas exploration contracts with Vietnam in the South China Sea, including pressuring U.S. firm ExxonMobil to drop an exploration agreement with Vietnam in July 2008 in the same waters. Vietnamese students staged several anti-China demonstrations in response, prompting a warning from the Chinese Foreign Ministry spokesman that Hanoi's failure to quell the demonstrations was harming relations. China's efforts in the summer of 2009 to strictly enforce its unilateral fishing ban in disputed waters led to the detention for several weeks of more than two dozen Vietnamese fishermen.

In contrast, Vietnam has made significant progress with China in delineating its northern land border and the Gulf of Tonkin, pursuant to a Land Border Agreement signed in December 1999, and an Agreement on Borders in the Gulf of Tonkin signed in December 2000. The two sides completed demarcation of their land border in December 2008 and have reached understanding on maritime boundaries in the mouth of the Tonkin Gulf.

U.S.-VIETNAM RELATIONS
President Bill Clinton announced the formal normalization of diplomatic relations with the Socialist Republic of Vietnam on July 11, 1995. Subsequent to President Clinton's normalization announcement, in August 1995, both nations upgraded their Liaison Offices opened in January 1995 to embassy status. As diplomatic ties between the nations grew, the United States opened a consulate general in Ho Chi Minh City, and Vietnam opened a consulate general in San Francisco. In 2009, the United States received permission to open a consulate in Danang; in 2010, Vietnam officially inaugurated a consulate general in Houston.

U.S. relations with Vietnam have become increasingly cooperative and broad-based in the years since political normalization. A series of bilateral summits have helped drive the improvement of ties, including President George W. Bush's visit to Hanoi in November 2006, President Triet's visit to Washington in June 2007, and Prime Minister Dung's visits to Washington in June 2008 and April 2010. The two countries hold an annual dialogue on human rights, which resumed in 2006 after a 2-year hiatus. Vietnam and the United States signed a Bilateral Trade Agreement in July 2000, which went into force in December 2001. In 2003, the two countries signed a Counternarcotics Letter of Agreement (amended in 2006), a Civil Aviation Agreement, and a textile agreement. In January 2007, Congress approved Permanent Normal Trade Relations (PNTR) for Vietnam. In October 2008, the U.S. and Vietnam inaugurated annual political-military talks and policy planning talks to consult on regional security and strategic issues. In August 2010, the U.S. Department of Defense and Vietnam’s Ministry of Defense held the first round of annual high-level defense talks, known as the Defense Policy Dialogue. Bilateral and regional diplomatic engagement has expanded at ASEAN, which Vietnam chaired in 2010, and continues through APEC.

Vietnam's suppression of political dissent has continued to be a main issue of contention in relations with the United States, drawing criticism from successive administrations, as well as from members of Congress and the U.S. public. Since October 2009, Vietnam's government has convicted more than 24 political dissidents, and has arrested an additional 15 others. The government has continued to further tighten controls over the Internet, press, and freedom of speech. In 2009, two journalists were arrested and convicted in connection with their reporting on high-level corruption, and several journalists and editors at leading newspapers have been fired. Several Internet bloggers were also arrested, jailed, and convicted after writing about corruption, and protesting China's actions in the disputed Spratly and Paracel Islands and Chinese mining of bauxite in the central highlands.

In contrast, Vietnam has continued to make progress on expanding religious freedom, although significant issues remain. In 2005, Vietnam passed comprehensive religious freedom legislation, outlawing forced renunciations and permitting the official recognition of new denominations. Since that time, the government has granted official national recognition or registration to a number of new religions and religious groups, including eight more Protestant denominations, and has registered hundreds of local congregations particularly in the central highlands. As a result, in November 2006, the Department of State lifted the designation of Vietnam as a "Country of Particular Concern," based on a determination that the country was no longer a serious violator of religious freedoms, as defined by the International Religious Freedom Act. This decision was reaffirmed by the Department of State in 2007, 2008, and 2009. Nevertheless, there is room for further progress. The government's slow pace of church registration, particularly in the northwest highlands, and harassment of certain religious leaders for their political activism, including leaders of the unrecognized United Buddhist Church of Vietnam and Hoa Hao faith were an ongoing source of U.S. concern. Violence against the Plum Village Buddhist order at the Bat Nha Pagoda in Lam Dong and Catholic parishioners in Con Dau parish outside of Danang and outside of Hanoi at Dong Chiem parish at the hands of the police and organized mobs was particularly troubling.

As of November 12, 2010, the U.S. Government listed 1,711 Americans unaccounted for in Southeast Asia, including 1,310 in Vietnam. Since 1973, 935 Americans have been accounted for, including 661 in Vietnam.

Additionally, the Department of Defense has confirmed that of the 196 individuals who were "last known alive" (LKA) in Vietnam, the U.S. Government has determined the fate of all but 25. The Joint POW/MIA Accounting command (JPAC) conducts four major investigation and recovery periods a year in Vietnam, during which specially trained U.S. military and civilian personnel investigate and excavate hundreds of cases in pursuit of the fullest possible accounting. Unrestricting areas previously denied to JPAC personnel has been a recent highlight of cooperation by the Socialist Republic of Vietnam, as was the first-ever turnover of POW/MIA-related artifacts from the Vietnam Military History Museum, apparently a reciprocal action in response to U.S. turnovers of Vietnamese war artifacts. In June 2009, a coastal search mission by the oceanographic survey ship USNS Heezen was the first of its kind, creating the potential to recover hundreds of underwater crash sites. The U.S. would still like to see the provision of archival documents related to U.S. losses along the wartime Ho Chi Minh Trail, as well as more openness in general with regard to Vietnam’s wartime archives. The United States considers achieving the fullest possible accounting of Americans missing and unaccounted for in Indochina to be one of its highest priorities with Vietnam.

Since entry into force of the U.S.-Vietnam Bilateral Trade Agreement on December 10, 2001, increased trade between the U.S. and Vietnam, combined with large-scale U.S. investment in Vietnam, evidence the maturing U.S.-Vietnam economic relationship. In 2009, the United States exported $3.1 billion in goods to Vietnam and imported $12.3 billion in goods from Vietnam. Similarly, U.S. companies continue to invest directly in the Vietnamese economy. During 2009, the U.S. private sector committed $9.8 billion to Vietnam in foreign direct investment. Another sign of the expanding bilateral relationship is the signing of a Bilateral Air Transport Agreement in December 2003. Several U.S. carriers already have third-party code sharing agreements with Vietnam Airlines. Direct flights between Ho Chi Minh City and San Francisco began in December 2004. The Bilateral Air Transport Agreement was amended in October 2008 to fully open markets for cargo air transportation. Vietnam and the United States also signed a Bilateral Maritime Agreement in March 2007 that opened the maritime transport and services industry of Vietnam to U.S. firms.

Vietnam remains heavily contaminated by explosive remnants of war, primarily in the form of unexploded ordnance (UXO) including extensive contamination by cluster munitions dating from the war with the United States. The United States is the largest single donor to UXO/mine action. The Department of State continues to assist Vietnam in detecting and clearing unexploded ordnance, educating the public on the risks of UXO and providing assistance to the victims of UXO. Since 1993, U.S. has contributed over $50 million in clearance, education, and victims’ assistance programs.

While legacy issues such as UXO/demining, MIA accounting, and Agent Orange provided the foundations for the U.S.-Vietnam defense relationship, mutual interest in addressing the challenges of humanitarian assistance/disaster relief, search and rescue, and maritime security have allowed the defense relationship to accelerate in the past 3 years, with Vietnam participating in U.S.-provided capacity-building training in these areas. Many of these topics are discussed in annual bilateral defense discussions. In April 2009, a delegation of senior Vietnamese Navy and Air Force officers participated in a fly-out to the USS John C. Stennis in international waters off the coast of Vietnam. During August 2010, another delegation of government and military officials participated in a fly-out and tour aboard the USS George Washington just prior to the USS John S. McCain visit to Danang, Vietnam.

Two years after its first visit to Vietnam, the hospital ship USNS Mercy paid a port call to Quy Nhon in June 2010, where it provided medical and dental treatment to thousands; the USNS Mercy's June 2008 visit to Nha Trang reached over 11,000 Vietnamese patients. Other U.S. Navy visits in 2010 included the USNS Richard E. Byrd for maintenance and repair. Vietnam continues to observe multinational exercises such as the Cooperation Afloat Readiness and Training (CARAT) organized by the U.S. Pacific Fleet and the yearly GPOI CAPSTONE exercise organized by the U.S. Pacific Command. An active partner in nonproliferation regimes, Vietnam also takes full advantage of expertise, equipment, and training available under the Export Control and Related Border Security (EXBS) program and signed a memorandum of understanding with the United States to initiate a program--known as Megaports--to help Vietnam detect and identify weapons of mass destruction and their components at its commercial ports. Vietnam recently agreed to join the Global Initiative to Combat Nuclear Terrorism, and Prime Minister Dung was an active participant in President Barack Obama's April 2010 Nuclear Security Summit in Washington.

Principal U.S. Embassy Official
Charge ď Affaires--Virginia E. Palmer

The U.S. Embassy in Vietnam is located at 7 Lang Ha, Ba Dinh District, Hanoi, Socialist Republic of Vietnam (tel. 84-4-3850-5000; fax 84-4-3850-5010).

Principal U.S. Consulate General Official
Consul General--An T. Le

The U.S. Consulate General in Ho Chi Minh City is located at 4 Le Duan, District 1, Ho Chi Minh City, Socialist Republic of Vietnam (tel. 84-8-3520-4200; fax 84-8-3520-4244).



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