Chancellor calls for closer trade ties with Vietnam – The Diplomat

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Germany will try to deepen its energy and trade relations with Vietnam, said Chancellor Olaf Scholz during a visit to the country on Sunday, the first stop on his three-country trip through Southeast Asia.

Scholz’s trip to Vietnam, which preceded a stopover in Singapore and his attendance at this week’s G-20 summit in Indonesia, saw him received with military honors by Prime Minister Pham Minh Chinh before he met Nguyen Phu Trong, the Vietnamese Communist leader. met party (VCP).

The Russia-Ukraine war was perhaps inevitable in the talks, with Scholz urging his Vietnamese hosts to take a “clear position” on the conflict, Deutsche Welle reported. “The point is that the Russian war of aggression is a breach of international law with a dangerous precedent. Small countries can no longer be safe from the behavior of their larger, more powerful neighbors,” said the German Chancellor at a joint press conference with Chinh.

However, the fact that Scholz was accompanied to Hanoi by a 12-strong business delegation shows how much the economy was the focus of the trip.

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At a joint press conference with Chinh, Scholz said Berlin hopes for deeper trade ties with Hanoi and will support the country’s transition to a greener economy. He also mentioned that Germany would help expand Hanoi’s stalled metro system. in one tweet yesterdayScholz wrote that his country wanted to “expand our sales markets, sources of raw materials and production facilities” in order to become “more independent of individual states”.

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The trip reflected both the increasingly important place Vietnam is occupying in global supply chains and the newfound interest of many German companies in expanding their presence beyond China amid rising tensions between Beijing and the West.

Indeed, Scholz’s trip, the first by a German leader to Vietnam in more than a decade, quickly followed his visit to China last week, the first by a Western leader since the start of the COVID-19 pandemic. After the war in Ukraine exposed the folly of his predecessor Angela Merkel’s careless policy towards Russian energy imports, the trip sparked criticism from many Western observers that economic interests prevented Berlin from recognizing the threat posed by Xi Jinping’s China.

Politico quoted critics as saying that Scholz was making “exactly the same mistakes of over-relying on China that Berlin previously made with Russia.” For his part, the chancellor said Germany would seek a middle ground. In a recent op-ed, he argued that “in a multipolar world, new centers of power are emerging and we aim to build and expand partnerships with all.”

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He said Berlin has “no interest in seeing new blocs emerge in the world” and that China’s growing power and influence “does not justify calls by some to isolate China, nor the pursuit of Chinese hegemonic dominance, or even a Sinocentric world order.”

Against this background, the focus on Vietnam makes sense – for the federal government and German industry alike. Vietnam is Germany’s most important trading partner in Southeast Asia. According to Reuters, around 500 German companies are now active in the country, 80 of which have production facilities there. At the same time, Germany is Vietnam’s second largest trading partner after the Netherlands among the member states of the European Union.

The head of the German Chamber of Commerce in Vietnam, Marko Walde, told Reuters that more and more German companies are trying to diversify some of their operations away from China. More than 90 percent of companies planning such a move see Southeast Asia as their preferred choice, with Vietnam and Thailand among the leading options in the region.

Certainly, as in its relations with Beijing, Berlin will be forced to refine apparent tensions between its business interests and professed commitment to human rights principles. In addition to the generally repressive political climate, which has seen scores of Vietnamese dissidents and political activists arrested in recent years, the brazen kidnapping of Trinh Xuan Thanh, a fugitive Vietnamese state enterprise employee, from a Berlin park in 2017 caused a cold in Vietnam-Vietnam relations and Germany.

For Vietnam, the increased attention from Germany has some downsides. Over the past five years, the country’s economy has benefited as Western companies have sought to reduce their economic reliance on China-centric supply chains – a process that is only set to continue given the current slowdown between Xi’s China and the West. This is another reminder that while Vietnam’s crushing geographic, political and economic proximity to China poses great risks, the rewards can also be significant.