Beyond Bamboo Diplomacy: Vietnam’s Shrinking Room for Manoeuvre

For years, Vietnam’s foreign policy has been described as “bamboo diplomacy”: flexible roots, firm principles, and careful balance among major powers. In practice, this has meant maintaining working relations with competing powers while avoiding overdependence on any single one. It remains a useful framework. But under the leadership of Communist Party of Vietnam (CPV) General Secretary and President To Lam, it no longer fully explains how Hanoi is navigating a more constrained environment.

Vietnam’s evolving posture — particularly its deepening engagement with China — is often interpreted as a response to intensifying US–China competition and growing trade uncertainty. This view captures part of the picture, but misses something more fundamental. Vietnam’s room for manoeuvre is becoming more constrained – not only because of intensifying US-China competition, but also because domestic constraints are increasingly shaping which forms of external engagement are politically manageable and institutionally feasible.

Under growing domestic pressure, external partnerships are increasingly judged not only by strategic value, but also by whether they can be politically managed and implemented within a more risk-sensitive system. This is what might be described as “governance-first diplomacy”.  

The shift begins at home. During much of the 2010s, Vietnam benefited from strong growth, relatively predictable administrative processes, and high investor confidence. This gave policymakers room to balance externally. That room has since narrowed. The anti-corruption campaign has tightened discipline, but it has also slowed approvals, increased risk aversion, and contributed to uneven implementation. Foreign policy is increasingly shaped by what can realistically be executed within a more risk-sensitive system. The leadership itself appears increasingly aware of these constraints. In May 2026, newly appointed Prime Minister Le Minh Hung ordered ministries and agencies to cut 30 per cent of administrative procedures, reflecting growing concern over bureaucratic paralysis and implementation bottlenecks. External partnerships are now judged not only by strategic value, but also by whether they can be implemented without generating excessive political or institutional risk.

This logic can be seen in preliminary signals under To Lam. His April 2026 visit to Beijing — shortly after he assumed the presidency — placed notable emphasis on political trust and institutional coordination. While Vietnam-China ties have always had both economic and political dimensions, the framing appeared to place greater emphasis on aspects of the relationship aligned with internal priorities of control and stability.

China illustrates both the opportunities and limits of governance-first diplomacy. It expands Vietnam’s room for manoeuvre in some areas because cooperation in party-to-party ties, internal security and infrastructure coordination can proceed without political conditionality. Projects such as railway standardisation along the Lao Cai-Hanoi-Haiphong corridor align with the leadership’s need to reduce logistical bottlenecks and sustain export competitiveness. Cooperation with China in these areas also requires fewer politically sensitive regulatory adjustments than many US-linked technology initiatives. Yet China also narrows Vietnam’s room for manoeuvre politically. Persistent anti-China sentiment means that closer engagement risks nationalist backlash, as seen during the 2018 protests over Special Economic Zones. China may support regime stability institutionally, but it remains politically sensitive domestically.

Foreign policy is increasingly shaped by what can realistically be executed within a more risk-sensitive system.

The US presents a different kind of constraint. Vietnam wants access to US markets, semiconductors and advanced technology, but deeper cooperation in areas such as digital infrastructure, data governance and strategic supply chains also creates domestic governance concerns. The anti-corruption campaign has made officials more cautious about politically sensitive or procedurally complex projects, particularly in sectors such as digital infrastructure, semiconductor supply chains and data governance that require sensitive regulatory changes and expose officials to greater political and accountability risk.

The constraint on deeper US engagement, therefore, is not simply external pressure from Washington, but Hanoi’s own effort to manage technological openness without loosening political control. Delays and uncertainty around areas such as approvals for liquefied natural gas (LNG) projects, data localisation regulation and digital governance have become recurring concerns for American investors despite strong political support for the Comprehensive Strategic Partnership. In May 2026, the Nghi Son LNG bidding round was reportedly cancelled for a third time because of insufficient dossiers, highlighting how procedural complexity and regulatory caution continue to slow implementation in strategically important sectors.

Regional economies such as Japan, South Korea and Singapore function as an implementation safety valve within Vietnam’s foreign policy. Their projects are easier to implement because they rely on established regulatory and investment frameworks that have already been politically vetted by the leadership. Partnerships such as the Vietnam-Singapore Industrial Parks (VSIP) provide infrastructure, manufacturing investment and technology transfer with relatively low political friction. They are also easier to frame as economic development, less likely to trigger nationalist backlash than China-linked initiatives, and less strategically sensitive than US-linked technology cooperation.

Ultimately, external partnerships cannot compensate for internal constraints. The anti-corruption campaign has made officials more cautious and slowed down decision-making, even as the new leadership has recently sought to accelerate approvals and administrative reform. To Lam’s background in public security also suggests a governing instinct oriented toward control and risk containment. The result may be a more selective system: faster in areas receiving clear political backing, but still cautious where regulatory, political or implementation risks remain high. Different external partnerships may therefore become increasingly uneven in how easily they can be advanced and executed.

Vietnam is unlikely to abandon bamboo diplomacy. But under To Lam, different external partnerships may increasingly progress at different speeds depending on their domestic political and regulatory implications. Relationships that align with existing institutional structures and political priorities — such as infrastructure cooperation with China or industrial partnerships with Singapore and Japan — may move more smoothly than partnerships requiring politically sensitive regulatory change or greater technological openness.

The result may be a Vietnam that remains outwardly pragmatic, but increasingly uneven in how quickly and confidently it engages different partners under this more governance-driven approach to foreign policy.

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