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Aidan Jones

It was a gesture that was equal parts diplomacy and theatre: Thai Prime Minister Anutin Charnvirakul coaxing a melody out of a traditional Vietnamese t’rung xylophone at a Hanoi state banquet on Monday.
The real music, however, had been made in the meeting rooms.
Two days of talks between Anutin and his Vietnamese hosts produced a pledge to nearly double bilateral trade to US$25 billion within four years – and eventually to double it again. Supply chains would be stitched together across electronics and semiconductors; trade barriers would fall.
Behind the bonhomie lay a hard-nosed reality: battered by US tariffs, Middle East turmoil and soaring commodity prices, Thailand and Vietnam have decided they are stronger as a pair.

The summit followed Vietnamese President To Lam’s own debut visit to Bangkok barely a fortnight earlier, marking a rare set of back-to-back meetings between the leaders of Southeast Asia’s second and third-largest economies.
“Both countries face a shared external shock,” said economist Pavida Pananond, an international-business professor at Thammasat Business School in Bangkok, citing “the fracturing of the rules-based trading order”, reconfigured global supply chains and intensifying US-China competition.
Closer ties afforded both nations “a degree of strategic hedging that neither can easily achieve alone”, she said.
But the two countries arrived at their partnership from starkly different positions.

Diverging fortunes
Vietnam should be riding high. To Lam, its most powerful leader in decades, is betting his legacy on rapid modernisation – fast-tracking new ports, airports and high-speed rail lines while slashing the red tape that has long frustrated foreign investors and stifled the ambitions of his country’s 100 million people.
He has also reinvented Vietnam’s traditionally taciturn diplomacy, shuttling from Beijing to Washington to New Delhi with a message that his country is, emphatically, open for business.
Thailand, meanwhile, came to the recent summits with a sluggish economy – forecast to grow at a meagre 1.6 to 2 per cent this year – an underskilled workforce and millions of households mired in debt following years of policy drift and political tumult.

Vietnam, which has its mind set on double-digit growth, is now poised to overtake Thailand as the second-largest economy in the Association of Southeast Asian Nations, possibly as soon as this year.
This humbling milestone for Bangkok draws near as Washington’s trade investigators have both countries in their sights over alleged forced-labour violations – accusations critics describe as a pretext for reimposing tariffs by stealth after the US Supreme Court struck down earlier levies.
All the while, the war on Iran that the US and Israel launched in February has unleashed an inflationary wave rippling across oil, gas, fertiliser and feedstock markets that economists say has yet to make its full damage felt.
For all the economic headwinds, however, money is already moving. Bilateral trade between Thailand and Vietnam reached roughly US$8.6 billion in the first four months of this year, fuelling hopes of exceeding 2025’s full-year total of around US$22 billion.
Thailand also ranks second only to Singapore as the top source of foreign direct investment into Vietnam from within Asean, with total registered capital exceeding US$15.4 billion.
Vietnam and Thailand have good reasons to invest more in their own neighbourhood
Nguyen Khac Giang, Vietnamese political scientist
Whereas Thai money once flowed into Vietnamese supermarkets and restaurant chains, the kingdom’s largest companies – SCG, CP Group, Amata and WHA among them – are now sinking capital into manufacturing, industrial infrastructure and professional services.
New industrial zones in north-central Nghe An province are drawing Thai investment; industrial estate developer Amata and SCG – one of Asia’s largest chemicals and cement companies – are expanding across the “Southern Industrial Belt” that includes Ho Chi Minh City; and semiconductors and electronics have taken root in Thai Nguyen, an hour north of Hanoi.
‘’Major Thai groups … are leading this charge,’’ said Jack Nguyen, CEO of InCorp Vietnam, a consultancy that helps foreign companies establish and scale their businesses in the country.
Anutin and To Lam’s twin visits, which both featured senior corporate executives padding out the leaders’ entourages, are about “economics and insurance”, according to Nguyen Khac Giang, a political scientist and visiting fellow at the ISEAS – Yusof Ishak Institute’s Vietnam studies programme.
“Vietnam and Thailand have good reasons to invest more in their own neighbourhood,” he said.
“Vietnam gains from Thai capital, consumer brands and regional business networks. Thailand gains from Vietnam’s growth, its young market and its manufacturing base.”

The Asean test
Yet there are limits to the Mekong neighbours’ partnership. Both economies are chasing the same prize: export market share in the United States and China, and the foreign investment that flows towards whoever captures it first.
When Washington’s “reciprocal” tariffs were announced last year, To Lam called Donald Trump directly to seek a bilateral reprieve, instinctively sidestepping any collective Asean position.
“Vietnam is competing directly with Thailand for export markets and foreign direct investment in precisely the sectors that matter most,” said Thammasat University’s Pavida, citing electronics, vehicle manufacturing and “even data centres”.
What Bangkok and Hanoi are building, then, is a partnership defined as much by mutual anxiety as mutual interest – a bilateral hedge against a world neither can manage alone.
Analysts say that dynamic may carry lessons for Asean as a whole: a grouping long derided for the frequency of its summits and the scarcity of its results.

“The real problem in Asean is not too much bilateral cooperation, but too little meaningful connectivity,” Giang said.
“If Vietnam and Thailand can build a stronger economic corridor, that can become one of the building blocks for a more integrated Asean.”
Pavida agreed that the ripple effects of two major Southeast Asian economies aligning more closely could produce an “Asean-plus” effect, pulling other members towards deeper integration at a moment when the bloc faces mounting pressure to prove its worth.
Or it could produce an “Asean-minus” outcome, she said – just another bilateral deal that flatters its participants while leaving the broader regional architecture no stronger.
“The former would make it genuinely significant,” Pavida said. “The latter would make it one more ceremonial bilateral deal in an already crowded field.”


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Thailand

Thailand, Vietnam team up in an Asean ‘plus or minus’ gamble

Thai Prime Minister Anutin Charnvirakul welcomes Vietnam’s President To Lam to Bangkok’s Government House complex on May 28. Photo: Sopa Images/Zuma Press Wire/dpa

Anutin Charnvirakul smiles after playing a traditional Vietnamese “t’rung” xylophone at a state banquet in Hanoi on Monday in this still from a social media video. Photo: Facebook

A woman rides a bicycle on a street in Hanoi on June 3. Vietnam is aiming for double-digit economic growth this decade. Photo: EPA

Staff attend to a handbag concession at a shopping centre in Bangkok last month. Thailand expects to record economic growth of around 2 per cent this year. Photo: EPA

Vietnam’s President To Lam and Thai Prime Minister Anutin Charnvirakul clap next to a logo celebrating the 50th anniversary of the two countries’ diplomatic relations in Bangkok on May 28. Photo: EPA

Asean leaders pose for a group photo during the opening ceremony of the bloc’s most recent summit in Cebu, the Philippines, on May 8. Photo: Reuters

Beyond bamboo: Vietnam’s To Lam mounts a diplomacy offensive

Vietnam’s To Lam waves after shaking hands with Indian Prime Minister Narendra Modi before their meeting at Hyderabad House in New Delhi on May 6. Photo: EPA

Vietnam’s top leader To Lam (left) receives a bouquet from Chairman of National Assembly Tran Thanh Man after swearing in as the country’s president in Hanoi last month. Photo: via AP

Workers at a garment factory in Vietnam’s Thai Nguyen Province. President To Lam wants Vietnam to be formally recognised as a high-income nation by 2045. Photo: AFP

Vietnam’s President To Lam (left) and India’s Prime minister Narendra Modi attend a joint press statement after their meeting at Hyderabad House in New Delhi, India on May 6. Photo: EPA

An electric car in Hanoi. Vietnam’s economy is forecast to grow at more than 7 per cent this year. Photo: AFP

Chinese President Xi Jinping (left) holds a welcome ceremony for Vietnamese President To Lam outside the Great Hall of the People in Beijing last month. Photo: AP

Vietnam’s To Lam seeks to ‘re-energise’ Thai ties with trade, Ho Chi Minh’s legacy

Thailand’s Prime Minister Anutin Charnvirakul (left) and Vietnam’s President To Lam review a guard of honour at Government House in Bangkok on Thursday. Photo: Reuters

Vietnam’s President To Lam visits the Ho Chi Minh memorial site in Udon Thani, Thailand. Photo: Facebook/thailandprd

Chinese President Xi Jinping (left) holds a welcome ceremony for his Vietnamese counterpart To Lam in Beijing last month. Photo: Xinhua

To Lam’s blueprint for a rising Vietnam: build fast, grow rich

Illustration: Huy Truong

An artist’s impression of the golden, drum-shaped Trong Dong Stadium in Hanoi. Photo: Handout 

A worker installs an advert for 14th congress of Vietnam’s Communist Party in Hanoi on January 9. Photo: AFP

Labourers work at a construction site in Hanoi, Vietnam, in January. Photo: EPA

To Lam (second from right) looks on as a member of Vietnam’s armed forces carries a portrait of Nguyen Phu Trong during the former party chief’s funeral in Hanoi, Vietnam, in July 2024. Photo: AP 

Eric Trump, the US president’s son, speaks at the groundbreaking ceremony for Trump International Hung Yen, a tourism and golf complex in To Lam’s home province, in May 2025. Photo: VNA/AP

Customers drink at a East West Brewing Company bar in Vietnam. Photo: Handout 

Tourists take photos as a train passes along the track on the popular Train Street in Hanoi on February 13. Photo: AFP

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Southeast Asia’s second- and third-largest economies opt for bilateral insurance over reliance on the regional bloc


Southeast Asia’s second- and third-largest economies opt for bilateral insurance over reliance on the regional bloc.


Thailand, Vietnam team up in an Asean ‘plus or minus’ gamble

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Southeast Asia’s second- and third-largest economies opt for bilateral insurance over reliance on the regional bloc

Southeast Asia’s second- and third-largest economies opt for bilateral insurance over reliance on the regional bloc