As tensions in the South China Sea rise, Vietnam needs calmer seas.

Hanoi stockbroker Mai Xuan Huu is a member of Vietnam’s upwardly mobile middle class, whose fortunes are tightly bound to the country’s political stability – and economic growth that’s been averaging a brisk 4.5 per cent annually.

But the 33-year-old now harbours concerns for his homeland, which has benefited in recent years from companies relocating their supply chains outside China to skirt US tariffs arising from the pair’s damaging trade war.

leadership transition in Hanoi, marked by an unprecedented blizzard of corruption allegations within the ruling Communist Party, briefly stirred concerns over the very continuity that has fuelled Vietnam’s rise. Looming over this uncertainty is the combustible South China Sea, where Beijing’s sweeping claims butt up against those of Hanoithe Philippines and Malaysia – among others.

“I am very concerned that these aggressive Chinese acts could escalate into conflict, especially when Vietnam has just lost a talented party chief,” Huu said. “I hope the Vietnamese government will always make the right decisions to live peacefully with other countries and still protect our sovereignty.”

But Huu need not fret too much – at least for now. Vietnam, analysts note, wields a potent diplomatic tool to avoid escalation: its “bamboo diplomacy”. This approach of careful neutrality is expected to continue under the nation’s new General Secretary To Lam, who used his first trip abroad since taking power in July to visit China and reinforce ties with Hanoi’s largest trading partner and the region’s dominant economic, military and political force.

“The fact that you have come to China on your first visit … reflects the great importance you attach to relations between the two parties and countries,” Xi Jinping told his Vietnamese counterpart in Beijing, according to comments carried by Chinese state media on Monday – adding that he looked forward to establishing a “good working relationship and personal friendship” with Lam.

Bamboo, known for its ability to bend without breaking, lends its name to Vietnam’s diplomatic approach – reflecting the flexibility at the heart of the nation’s foreign policy.

Indeed, Lam’s diplomatic balancing act extends beyond China. Next month, he is scheduled to visit New York for the UN General Assembly, where he is expected to meet US President Joe Biden on the sidelines. This dual outreach – bolstering ties with both Beijing and Washington – exemplifies the deft manoeuvring that has kept Vietnam’s economy humming even as geopolitical tensions have risen around it.

“The reality is that bamboo diplomacy, with the country’s studious neutrality, has been very successful for it, so why would you change it?” said Zachary Abuza, a Southeast Asian security expert at the National War College in Washington. “I think you’re going to see very much what we’ve seen the past couple of years.”

Tensions have flared in recent months, with Manila accusing China of attempting artificial island-building at Sabina Shoal, which lies about 140km (87 miles) off the Philippine island of Palawan.

In response, the Philippines dispatched its coastguard to the area, drawing the attention of Chinese patrol boats tasked with enforcing Beijing’s claims to the mostly underwater feature. This confrontation came to a head on Monday, when Chinese and Philippine coastguard ships collided near the shoal, sparking a new round of finger-pointing.

Vietnam, too, has antagonised China in recent weeks by submitting a request to the UN to expand its own claims to a continental shelf. However, analysts say this move was likely aimed more for domestic political consumption than as an overt challenge to Beijing.

At the end of Lam’s recent three-day visit, China and Vietnam issued a joint declaration reaffirming their commitment to managing and resolving South China Sea disputes through “friendly consultations” – signalling that the loss of Vietnam’s former general secretary, the influential Nguyen Phu Trong who died last month, is not expected to dramatically alter Hanoi’s cautious approach.

“Vietnam is required to be resolute in principle to protect sovereignty, while also requiring flexibility and ingenuity in the negotiation process,” explained Le Dang Doanh, a retired senior economic adviser to five Vietnamese prime ministers.

In other words, Hanoi will continue to firmly assert its territorial claims, but do so through discrete diplomacy rather than confrontation.

This contrasts with the more assertive posture of the Philippines, noted the National War College’s Abuza.

“[Vietnam’s] strategy is largely based on condemning Chinese actions with very little in the means of raising the costs for China,” he said. “I think the Philippines understands that if no costs are imposed, why would China ever stop what they’re doing? And that’s just something the Vietnamese are not willing to do.”

In general, it refrains from escalating minor incidents, he said. Though Hanoi did become more assertive after 2014, when a major diplomatic row erupted over a Chinese oil rig moored off Vietnam’s central coast.

“Before then, Vietnam focused mostly on self-help efforts to modernise its navy and coastguard, while detaching the disputes from the overall bilateral relationship with Beijing to take advantage of close economic ties,” said Tran Bich, an adjunct fellow at the Centre for Strategic and International Studies in Washington.

The 2014 incident prompted Vietnam to seek out new security partners, intensifying maritime cooperation with the United StatesAustraliaIndia and Japan. It has also diversified its military imports, moving away from its historic reliance on Russia. However, Hanoi has still been treading lightly, scrapping offshore drilling projects with Spanish company Repsol and Russian state oil firm Rosneft in recent years following Chinese pressure.

The lifting of a US arms embargo in 2016 – a relic of the Vietnam war – has so far only resulted in a trickle of American military equipment, focused primarily on maritime assets for the country’s coastguard rather than major weapons systems.

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