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Vietnam is quietly becoming a nexus state

Published: 30 Apr. 2026, 00:04

Hao Nan

The author is a research fellow with the Charhar Institute and a 2025 Korean Peninsula specialist fellow with the National Committee on American Foreign Policy.

In April, Vietnam’s president had barely returned from China before Hanoi rolled out the red carpet for Korea’s president. That sequence captured something larger than routine diplomacy: In 2025, Vietnam upgraded ties with 17 partners and signed nearly 350 cooperation agreements. Its foreign trade surpassed $900 billion for the first time, growing by nearly one-fifth. Quietly, Vietnam is no longer behaving like a peripheral Southeast Asian economy. It is trying to turn itself into a nexus state.

President Lee Jae Myung, left, shakes hands with To Lam, Vietnam's president and Communist Party general secretary, ahead of their bilateral summit at the presidential palace in Hanoi on April 22. [JOINT PRESS CORPS]

The usual description of Vietnam as a “China Plus One” destination is now too narrow. It is true that companies looking to reduce overexposure to China have poured investment into Vietnamese factories. But Hanoi is doing more than passively receiving supply chains displaced by geopolitics. It is building a dense web of trade agreements, strategic partnerships, infrastructure links and domestic reforms designed to make Vietnam indispensable to multiple power centers at once.

The logic is not neutrality; it is functional multi-alignment. The United States offers market access, tariff pressure and technology opportunities. China provides supply chains, intermediate goods and geopolitical reality. The European Union brings high-standard markets and regulatory discipline. Japan and Korea provide capital, infrastructure, technology and manufacturing systems. Russia preserves an older security relationship and now offers nuclear energy cooperation. Asean gives Vietnam regional legitimacy and diplomatic shelter.

This is not hedging in the lazy sense of sitting on a fence. It is a deliberate effort to assign different functions to different partners while avoiding dependence on any single one. Vietnam is not trying to become an American ally, a Chinese satellite or a European rule-taker. It is trying to make all of them stakeholders in its own emergence.

The trade architecture behind this strategy is unusually sophisticated for an emerging economy. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership links Vietnam to high-standard Pacific markets, while the Regional Comprehensive Economic Partnership embeds it in East Asian supply chains. Agreements with the European Union and Britain provide access to advanced markets. Asean provides the regional platform, and the Indo-Pacific Economic Framework for Prosperity keeps Vietnam connected to the U.S. economic security agenda without requiring a formal trade agreement. Newer agreements further extend Vietnam toward the Gulf and Eurasia.

This network gives Vietnam something more valuable than openness alone: optionality. It can source from China, attract Japanese and Korean manufacturers, sell into the United States and Europe and still present itself as a loyal Asean member. Few countries are simultaneously embedded in so many overlapping frameworks. That is the institutional foundation of Vietnam’s nexus-state strategy.

The domestic side matters just as much. Under President To Lam, Vietnam is undergoing a political and administrative restructuring that supports this external ambition. Formally, the old “four-pillar” leadership structure has expanded, while To Lam’s concurrent role as party general secretary and state president has strengthened the political center. This is not simply personal consolidation. It is also an attempt to create a command structure capable of forcing through a faster development agenda.

Vietnam is also streamlining the state. Ministry mergers, provincial consolidation and the move toward a two-tiered local government structure are designed to reduce bureaucratic fragmentation. Hanoi wants fewer administrative layers, faster approvals and larger regional units capable of managing infrastructure, industrial zones and investment flows.

Anticorruption remains central to this process, but its function is evolving. Under Nguyen Phu Trong, the “blazing furnace” campaign was primarily about party discipline and elite accountability. Under To Lam, it is increasingly tied to state performance. The aim is not only to punish misconduct but to rebuild administrative discipline and restore confidence in public decision-making.

Economically, the old model is reaching its limits. For decades, Vietnam grew through low-cost labor, foreign direct investment and export manufacturing. That model still works, but it cannot by itself deliver the ambition of becoming a high-income country by 2045. Wages are rising, electricity demand is surging and infrastructure is under strain. Vietnam can no longer rely only on being cheap.

That is why Hanoi is pushing private-sector development, technology and strategic industries. The new agenda is built around semiconductors, AI, batteries, electric vehicles and green manufacturing. The goal is not autarky but to capture more value inside Vietnam rather than remain a platform for imported components and foreign-owned assembly.

A Samsung Electronics factory in Bac Ninh province, Vietnam, on April 3, 2025 [REUTERS/YONHAP]

This makes the recent diplomatic rhythm significant. The visit to China was about geography and supply chains. The Korean visit was about high technology and advanced manufacturing. Relations with Japan bring infrastructure and industrial upgrading. The European Union brings standards and market diversification. The United States brings both opportunity and pressure through markets and technology politics. Each relationship fills a different slot.

APEC 2027, to be hosted by Vietnam, could become the diplomatic showcase for this strategy. Hanoi can use that moment to present itself not as a battlefield of great-power rivalry but as a platform for supply-chain resilience, green transition and digital trade.

Still, Vietnam’s rise should not be exaggerated. It is not yet a global financial hub, a technology power nor a manufacturing superpower. Its infrastructure remains uneven and its power grid is under pressure. Its export model still depends heavily on Western demand, while its factories rely heavily on Chinese inputs.

But that vulnerability is also the source of Vietnam’s strategic relevance. In a fragmented global economy, the most valuable states are often those that connect systems that others cannot easily connect. Vietnam is becoming one of those states. Its bet is simple: Become useful to everyone, dependent on no one and central enough that no major power can ignore it.

HAO Nan is a research fellow with the Charhar Institute and a Nuclear Futures fellow (2025-2026) with the Ploughshares Fund & Horizon 2045. He previously served at East Asian intergovernmental organizations such as the Trilateral Cooperation Secretariat (for China, Japan and Republic of Korea) in Seoul and the ASEAN-China Centre in Beijing.