Vietnam Greets Putin in Boost to Ties, Ignoring US Criticism

(Bloomberg) -- Vietnam welcomed Russian President Vladimir Putin, underlining its decades-old relationship with Moscow in the face of US criticism over the Kremlin’s invasion of Ukraine.

Most Read from Bloomberg

Putin arrived in Hanoi on Thursday from North Korea, where he signed a comprehensive strategic partnership with Kim Jong Un who vowed to “unconditionally” support Russia in the war.

“The visit demonstrates that Vietnam actively implements its foreign policy with the spirit of independence, self-reliance, diversification, multilateralism,” according to a statement on Vietnam’s government website.

Vietnam and Russia have ties going back decades to the Soviet Union. Hanoi is brushing aside Western criticism of its invitation to Putin, who last visited Vietnam in 2017 when it hosted the Asia-Pacific Economic Cooperation Summit.

The US Embassy in Hanoi, in a statement Monday, said “no country should give Putin a platform to promote his war of aggression and otherwise allow him to normalize his atrocities.”

Russia’s Novatek PJSC plans liquefied natural gas projects in Vietnam, Putin wrote in the country’s Communist Party newspaper Nhan Dan ahead of his visit, without providing details. He also mentioned an initiative to establish a center for nuclear energy and technologies with the support of Russia’s state nuclear corporation Rosatom.

The company also wants to cooperate with Vietnam in wind power development, the Southeast Asian nation’s government reported on its website after a meeting between the firm’s CEO Alexey Likhachev and Vietnam Prime Minister Pham Minh Chinh.

Putin said nearly 60% of trade transactions between the two countries were in rubles and Vietnamese dong. Russia relies on alternative payment settlement systems since its banks are cut off from the international payments system SWIFT.

The Russian president is expected to participate in a wreath-laying ceremony at the Ho Chi Minh Mausoleum and meet officials including Communist Party chief Nguyen Phu Trong, Chinh and President To Lam, according to Vietnam’s Ministry of Foreign Affairs.

The nation has long relied on Russia for weapons, including aircraft and submarines. Since Russia’s February 2022 invasion of Ukraine, though, Vietnam has refrained from Russian arms procurements because of concerns over Western sanctions, said Carl Thayer, emeritus professor at the University of New South Wales in Australia.

Hanoi will seek reassurances that Russia’s increasingly close ties with China are “not going to be at the expense of Vietnam,” Thayer said.

While not a major trading partner — Vietnamese exports to Russia last year amounted to less than $2 billion compared to $97 billion to the US — Moscow is viewed as a counterbalance to both Beijing and Washington. The US is seen as an ideological “opponent” by Hanoi, while China’s claims to waters off Vietnam’s coast threatens its sovereignty, said Alexander Vuving, an Asia expert at the Daniel K. Inouye Asia-Pacific Center for Security Studies in Hawaii.

“Russia can alleviate pressure from both the US and China by giving Vietnam support,” Vuving said. “They can get arms from Russia. State-owned Russian companies for many years have been at the forefront of Vietnam’s efforts to protect its sovereignty in the South China Sea.”

Vietnam has used the backing of Russian firms to explore and drill for oil and gas in the South China Sea, often in the face of Chinese aggression.

In 2019, China repeatedly sent coast guard ships and a survey vessel to an energy block off Vietnam’s coast operated by Russia’s state-owned Rosneft PJSC. The previous year, PetroVietnam ordered Spain’s Repsol SA to halt work on a project off Vietnam’s southern coast, in what Bloomberg Intelligence called “an unexpected capitulation to geopolitical pressure applied by China.”

“The Russians have stood their ground” in the South China Sea, Vuving said.

State-owned Vietnam Oil and Gas Group, or PetroVietnam, has also signed a deal with Russia’s state energy giant Gazprom PJSC for oil drilling and exploration. Vietsovpetro, a joint venture between Vietnam and Russia, runs the Southeast Asian country’s largest oil field.

Vietnam, among nine Southeast Asian countries that abstained from condemning Russian violence in Ukraine last year, has taken a neutral stance on the war, calling for diplomacy to resolve the conflict.

Putin, in his article, thanked Vietnam for its “balanced position” toward Ukraine and for promoting “a pragmatic path to solve the crisis through peaceful means.”

Vietnamese Premier Chinh met with Ukrainian President Volodymyr Zelenskiy last year on the sidelines of the Group of Seven summit in Hiroshima. Many Vietnamese government officials and business executives have studied in Ukraine and Russia. Some 60,000 Vietnamese live in Russia, according to Vietnam’s government.

While hosting Putin is “risky” for Vietnamese officials, Vuving said, “they have to take the risk and stay loyal to Russia.”

--With assistance from Nguyen Xuan Quynh, Philip J. Heijmans, Linh Vu Nguyen, Mai Ngoc Chau and Jon Herskovitz.

(Updates the story with Putin article beginning in the sixth paragraph and appreciation for Vietnam’s stance on Ukraine war in the 18th paragraph.)

Most Read from Bloomberg Businessweek

©2024 Bloomberg L.P.