Nguyen Tan Dung is hell-bent on getting Vietnamese dissidents in line

Today, I read facebooker and blogger Me Nam’s story with a lot of anxiety.

On September 12, 2012, Nguyen Tan Dung declared war on Vietnamese bloggers by issuing a government decree that prohibits government employees from reading blogs Dan Lam Bao, Quan Lam Bao, and Bien Dong.

Blog Dan Lam Bao has been reporting anything that the government aka Vietnamese Communist Party (VCP) forbids, i.e. corruption and dissidence.

Blog Quan Lam Bao started( in July 2012) although reportedly champions for the anti-corruption cause, only reports corruption cases that are related to Nguyen Tan Dung, his son Nguyen Thanh Nghi, his daughter Nguyen Thanh Phuong and her husband (Harvard-trained) Nguyen Bao Hoang.

Blog Bien Dong only discusses about South China Sea disputes, between China and Vietnam, the Philippines. Pictures and videos showing Vietnamese or Filipino demonstrators against China are strictly forbidden by the VCP.

On September 24, 2012, Nguyen Tan Dung, via Saigon’s criminal court, handed out harsh sentences to bloggers Dieu Cay (17 years: 12 years of jail time + 5 years under house arrest), Ta Phong Tan (15 years: 10 years in jail + 5 years under house arrest), and AnhBaSG (7 years: 4 years in jail + 3 years under house arrest). Ta Phong Tan’s mother, Mrs. Dang Thi Kim Lieng died from self-immolation on July 30 to protest her daughter being unjustly jailed. Nguyen Tan Dung accused both bloggers Dieu Cay and Ta Phong Tan of being members of the “terrorist” Viet Tan party, a U.S.-based group that advocates non-violence to affect social changes in Vietnam, without providing any shred of evidence. Both bloggers denied Nguyen Tan Dung’s frivolous charges.

On September 26, 2012, Nguyen Tan Dung, via Nghe An’s appeals court, sentenced democracy activists Chu Manh Son to 30 months in jail, Tran Huu Duc 38 months, and Dau Van Duong 42 months.

All six defendants have one thing in common with other currently-jailed dissidents such as Dr. Cu Huy Ha Vu, Vi Duc Hoi, Le Van Tung, etc. : exercising their freedom of expression and thoughts (1) to fight corruption in the government, and (2) to protest peacefully against China’s illegal occupation of the Paracel and Spratly’s islands, which Vietnam claims absolute sovereignty.

Nguyen Tan Dung is very much fearful of Viet Tan since he and the Politburo believe strongly that Viet Tan is behind all the unrests in Vietnam, from unsanctioned labor strikes to farmers’ protests (against having their tilled land wrongly confiscated by corrupt communist officials) to intellectuals like blogger Me Nam, whose “crime” is to write down on her blog what she thinks.

The reason I read facebooker Me Nam’s Sept. 26, 2012 note with alarms is her chilling account of being interrogated by both national security agents and local police in Nhatrang province.

The chief interrogator, whose name is Nguyen, continuously put blogger Me Nam on a guilt trip by accusing her of being a member of Viet Tan, a pretext to later on get her to spend a long time in jail, similar to what Nguyen Tan Dung has given bloggers Dieu Cay and Ta Phong Tan.

Another accusation that security agent Nguyen made to blogger Me Nam is her close online association with Australia-based blogger Nguyen Xuan Chau, who vouches for blog Quan Lam Bao’s anti-corruption’s reports, and encourages his readers to support Quan Lam Bao in his fight against Nguyen Tan Dung & Co. Blogger Nguyen Xuan Chau is not shy about his ambition: to replace Nguyen Tan Dung as Vietnam’s Prime Minister once the VCP has been swept out of office. Hence, chief interrogator’s Nguyen’s interests in getting further information from blogger Me Nam about Nguyen Xuan Chau.

Furthermore, chief interrogator Nguyen might and will use today’s (Setp. 26, 2012) interrogation session with blogger Me Nam in reference to blogger Nguyen Xuan Chau to charge her with violating the Criminal Act 88 for “being a friend of someone, namely blogger Nguyen Xuan Chau, to overthrow the government”, if charging her of being a Viet Tan party member does not hold up in (international) public court of opinions.

Throughout the interrogation, blogger Me Nam has courageously stood her ground despite being threatened by chief interrogator Nguyen.

Blogger Me Nam did not mention CNN’s interview in her facebook’s note, but she did talk about Front Line Defenders and SEAPAC when queried by chief interrogator Nguyen as to why she had to travel to Thailand to learn about issues that are dear to her heart such as human rights, democracy, and journalism.

Personally, I think blogger Me Nam is about to be arrested anyday now if CNN, SEAPAC, Front Line Defenders choose to remain silent now that Nguyen Tan Dung and his band of thugs and thieves have decided to declare war on all freedom-loving people in the world.

The Bigger Picture
China’s chẹckbook diplomacy has proven to be very successful in Southeast Asia, especially in its “divide-and-conquer” strategy among ASEAN’s members.

Hun Sen, a former Khmer Rouge, wrestled control of Cambodia from China-backed Pol Pot’s regime in 1978 with the help from the VCP. He consolidated his power when relegating Sihanouk’s son and opposition parties (a coaltion backed by the U.S. and China) to the sideline by assassinating, murdering, bribing, intimidating anybody who dared to oppose him.

Sensing the imminent collapse of the Soviet Union and still distrust of the U.S., the VCP’s Politburo decided to normalize with China in 1990 despite getting “couple lessons” from China with the short-but-high-intensity border war in 1979, and losing some islands from the Spratly archipelago in 1988.

Communists use the euphemism “proletarian dictatorship” to silence opposition effectively and efficiently. Resorting to terror, murdering, assassination, etc. to justify the end is the norm, not the exception among communists. Stripped of the politics cover, communists behave exactly like Sicilian mafia, down to observing the Cosa Nostra code.

Hun Sen, at the great risk of getting killed by the VCP’s assassins, decided to test ASEAN’s founding members’ resolve last July when Cambodia, as the host country, declined to issue the standard communiqué to finalize the annual ASEAN meeting, whereas Vietnam and the Philippines asked for and got approval from other ASEAN members to get China to abide the COD as well as to negotiate multilaterally in South China Sea’s disputes. To every “international observer”‘s surprise and to SEATO’s members’ consternation and embarrassment, Hun Sen is still alive – politically and personally – minus some feather ruffling (getting accused of being sold out to China).

Hun Sen is no fool for surviving for so long threading the lines between China and his savior, the VCP. To placate nationalist fervor in Cambodia and Vietnam, both Hun Sen and the VCP, with master China’s blessing, would rhetorically oppose China’s assertiveness in Southeast Asia’s affairs. In return, China would provide safe haven for Hun Sen and the VCP’s leaders if “things go wrong”, i.e. other ASEAN’s members wise up to what China has been up to (thousand-year-old ambition of southward expansion via Vietnam), and they would collectively kick China’s stooges out of the club.

Sorry fates of Tibetans, Urghurs, Mongolians, Manchurians being assimilated into Hans serve as a clear example.

One fourth of the Cambodian population got killed by Pol Pot in less than 3 years is another constant reminder for anybody who toes Beijing’s line.

World War II and six million Jews perished in Nazi’s death camps was allowed to happen when everybody else in the world had the attitude ‘that it could never happen to me’.

China has been a threat for thousand years to Vietnam. Bloggers Me Nam, Dieu Cay, Ta Phong Tan, and Sundays’ demonstrators in Hanoi, Saigon, these Vietnamese know their country’s history valiant fight against Chinese exterminators. They also know about ‘enemies from within’ like Nguyen Tan Dung, Truong Tan Sang, Nguyen Phu Trong, Le Duc Anh, Le Kha Phieu, Nong Duc Manh, Ho Chi Minh, Le Chieu Thong, Tran Ich Tac etc. Their names might be different but they all have the same traitorous characteristics: serving China’s expansionist ambition.

Learning from few above-cited examples, Brunei, Burma, Indonesia, Malaysia, Singapore, and Thailand should unite in their fight against getting their people and culture being assimilated by China.

As tricky as China or Russia, the U.S. is the only superpower that does not advocate genocide as a national policy.

While China pollutes Africa with abandoned haste, and kills Africans with protracted wars to wipe out the black race (to make room for Hans people), it is stealthily conducting the same strategy in Southeast Asia by crippling ASEAN’s member nations’ infant industries with lower-than-cost toxic-laden products. At the same time, China conducts bilateral talks to further weaken ASEAN’s resolve as a group. No doubt that China’s checkbook diplomacy is most effective in these one-on-one discussions.

Internationalize Human Rights Organizations
It may sound like a broken record, but year after year, human rights organizations such as the Human Rights Watch, Amnesty International, Reporters Without Borders, Frontline Defenders, etc. churn out their annual and periodic reports detailing human rights violations across the globe. And sadly, the world goes on without skipping a beat to the dismay of thousands of human rights activists.

It’s time for the human-rights champion, namely the U.S., to work with countries that support and abide by the U.N. Human Rights Convention to provide this still-unnamed organization with some enforcement tools to get human rights violators such as China, Russia, or Vietnam to play by the rules. Easier said than done ? I doubt it since no country wants to be treated as a pariah in the global community.

Secondly, the U.S. needs to be the change agent in reforming the World Bank, IMF, ADB’s ways of doing business.

Getting dictators addicted to low or free interest loans in the name of nation-building and/or nation-developing costs peoples in poor nations more than benefits them since lending officials, due to their mission-oriented mind, would normally get cozy with dictators and turn a blind eye toward irregularities in infrastructure management. Therefore, developed nations should come up with some lending facility that provides arms-length transactions whereas transparency is the most crucial in the building block.

Vietnam: A Case Study
It’s no surprise to see Bill Gates on the Forbes’s list of America’s 400 richest people year after year since he deserves it for creating a product that the world demands. On the other hand, Nguyen Thanh Phuong (Nguyen Tan Dung’s daughter) became one of the richest people in Vietnam in few short years after getting her MBA in Banking & Finance from a Swiss university. (read: Switzerland is the most-favored country for world money launderers).

If Nguyen Thanh Phuong had inherited a sizable sum of money (hundreds of USD millions) from her father Nguyen Tan Dung, who earns about USD$200 a month as Vietnam’s Prime Minister, and subsequently used that money to invest successfully in Vietnam’s shadowy banking sector, there would not be a case study.

In order to get every Vietnamese equally poor, the VCP changed money three times in the 10-year period (1975-1985), and confiscated everything of marketable values. Every family was allowed to keep a nominal 200 piasters (VND) after every money change. In effect, the VCP was so successful in its campaign of eradicating the middle and upper classes that people who were born during this period suffer many illnesses due to under- or malnourishment since life’s basic necessities such as rice, wheat, sugar, meat, etc. were all rationed, and all production/manufacturing means were ‘managed’ by the VCP: the birth of corruption.

From 1975 onward, the VCP is the only recipient from international largess such as no-string-attached foreigh aids, low or free interest loans from the World Bank, the IMF, the Asian Development Bank, etc. to rebuild Vietnam after the civil war (Vietnam War to Americans, proxy wars to Europeans and overseas Vietnamese’s intellectuals) had ended.

Expatriate remittances (free money for the VCP) in 2010 was 8.7 USD$ billion, 9+ billion in 2011. Oil-production is non-stopped since the end of the war in 1975, and averages 300,000 barrels a day for the 10-year period (2001-2011).

The total ‘infrastructure development’ amount could range from hundreds of millions to hundreds of billions. Giving their peasant life to the ‘Revolution’ during the war, communist cadres found it hard to resist all these ‘evil’ free monies from capitalist donors now that the Politburo has decided to befriend the U.S. and its capitalist ‘lackeys’.

If anybody travels from the tip of China-Vietnam border in the North to Camau, the end of Vietnam to the South, and tallies all new infrastructure buildings or roads or bridges or hospitals etc., he or she would realize immediately that the numbers do not jibe. Buses, cars and trucks still travel on National Route 1, which was originally built by French colonists, and later improved upon by American G.I.s. Many sections of this road are filled with potholes.

Furthermore, one would notice the stark difference between rosy economic figures that the VCP and its partners (i.e. the World Bank) provide, and every Vietnamese’s daily standards of living. Although Vietnam is the world-leader in agricultural exports such as rice, coffee, pepper, cashew nuts, basa fish, shrimps, etc., Vietnamese farmers and fishermen still earn less than one USD a day. 70% of Vietnamese live and work in the countryside.

A visit to any city in Vietnam, one would find, out of 4 businesses, 3 are catered to food, drink, and entertainment services. These businesses are always crowded with able-bodied people – night and day. So much for low employment rates in Vietnam.

The majority of Vietnamese businesses are family-owned since the VCP controls the money printing process, and relies on party members’ loyalty to get a good grip on the population, bloated inefficient and unprofitable SOEs (state-owned-enterprises) is a must-have element in Vietnam’s economy picture.

In the beginning (circa 2000), the VCP maximizes its Doi Moi (Renovation) product to compete for a share of global FDIs (foreign-direct investments) touting highly-educated workforce and cheap labor.

Doing business in a poor country like Vietnam requires one to be an expert in bribery and corruption. Therefore not many American companies want to expand their business in Vietnam due to the RICO & Antitrust’s constraints. Scrupulous short-termers like HSCB, Standard Chartered, JP Morgan, Citigroup, Credit Suisse, etc. and their partners-in-crime Big 4 Accounting firms have been on the news lately about money laundering and corruption. Australia is feeling the boomerang effect with the salacious Securency scandal. Only South Korean, Japanese, and Taiwanese firms shift their manufacturing bases to Vietnam.

Today, 90% of Vietnam’s infrastructure projects are awarded to Chinese companies. Disregard of well-intentioned Vietnamese scientists, Nguyen Tan Dung still allows China to mine bauxite in Vietnam’s strategic Central Highlands. In addition, the VCP let thousands of supposedly Chinese migrant workers to enter Vietnam without so much of a restriction. Chinese cities, villages, shopping centers pop up overnight, and now has become part of Vietnam’s landscape.

Taking a page from his son-in-law Nguyen Bao Hoang, who reportedly got an MBA from Harvard, Nguyen Tan Dung told Nguyen Thanh Phuong to start accepting large sums of monies from corrupt officials, and invest in infrastructure projects that the VCP owns. After a short period, Nguyen Thanh Phuong had enough money of her own to buy a bank.

As a matter of fact, all Vietnamese ‘tycoons’ make their fortunes by conducting/consuming/involving in shadowy transactions like Nguyen Thanh Phuong. Scrupulous investment bankers and auditing firms as mentioned above help transform these dirty monies into legitimate businesses by listing them on well-known stock exchanges such as the NYSE. It’s time for the U.S. Treasury Department and the U.S. Securities Exchange Commission to take ‘unofficial economic advisor to the prime ninister’ Nguyen Bao Hoang and his helpers like Credit Suisse, HSCB, JP Morgan, Ernst & Young, Price Waterhouse, etc. to court to either jail them and/or to levy stiff fines for helping Nguyen Tan Dung and the VCP bankrupt Vietnam through their acts of stealing from national coffer (i.e. converting state-owned banks into public stock-owned companies, and pocketing all proceeds from stock sales), murdering farmers or denying them means of making a living by illegally appropriating farmland and reselling/converting it to privately-owned luxurious homes, condos, shopping malls, etc.

Understandbly, Nguyen Thanh Phuong and the rest of Vietnamese nouveau riche make their money through insider trading, influence peddling, and well-oiled connections within the VCP at the expense of the poor hard-working Vietnamese people who subsist daily on hand to mouth. Any Vietnamese with common sense and an ability to think independently could see through all the wrongdoings by Nguyen Tan Dung and his cohorts in the Politburo.

Therefore, it’s natural for any Vietnamese to feel the pain of seeing society’s productive citizens like farmers in the countryside, assembly workers in the cities getting under-compensated for their fruit of labor. Furthermore, it’s a matter of national pride for being the only people in the world that defeated Chinese, French, Japanese invaders, and yet, to fail miserably in develop a sound economy. It took Germany, Italy, and Japan less than 20 years after World War II to restore their economy prowess. Almost 40 years has passed, Vietnam still remains one of the poorest country in the world (less than USD$200 per capita is fact; $1,200 per capita is the number ‘cooked’ by the VCP and its partners-in-crime (i.e. World Bank, IMF, ADB) to attract FDIs. (systematic fraud)

Conclusion
‘Where’s the beef ?’ is the question that every concerned Vietnamese citizen asks him/herself when thinking of all the monies (agricultural exports, expat remittances, oil and other mineral exports, and money donated from rich countries + loans from ADB, IMF, World Bank) that have ‘entered’ Vietnam since 1975. More importantly, where have these monies ‘exited’ ?

President Harry Truman ‘let’ Mao Zedong overtake China and ‘stopped’ General McArthur from doing his job (uniting Korea when he chased Kim Il Sung and his Chinese backers back to China in the Korean War) for a reason. President Eisenhower shifted the conflict to Vietnam, also for a reason. Presidents Johnson refused to send troops North of Vietnam or bringing the war to Laos or Cambodia to cut off Vietnamese communists’ supply routes, also for a reason. President Nixon expressed his appreciation to 58,000 American soldiers killed in Vietnam by abandoning South Vietnam, and flew to Beijing to meet Mao Zedong in preparing/re-arranging a New World Order, now that the Soviet Union has outlived its usefulness. Some U.S. President kicked Taiwan out of the U.N. Security Council, and replaced with China. Back to doing business with China after the Tiananmen Square massacre in 1989 for Bush the Senior and Junior. Same friendly conduct for Presidents Clinton, Obama , and successive U.S. Presidents.

Since I’m not working for the U.S. Treasury Department, I cannot ascertain Vietnam’s capital outflow to the U.S. still remains unchanged, increases, or maybe more alarmingly, has decreased since Hu Jintao has iron-cladly assured Nguyen Tan Dung and the Vietnam’s Politburo that their ill-gotten gains are much safer ‘invested’ in China’s national bank since China is the only country in the world that is not under the U.S.’s worldwide financial control.

At any given time, ‘safe havens’ like Switzerland or the Caribbeans can be forced to divulge customers’ account information by ‘tricky’ Americans, and ‘small-time’ thieves like Nguyen Tan Dung would someday be arrested, jailed or killed, properties/assets confiscated whenever these tricky Americans desire. Proofs are how easily Africa’s despots ‘obey’ China, and Vietnam should follow their footsteps if the VCP intends to help China rein in these barbaric Vietnamese and their Southeast Asia cousins.

Before Deng Xiaoping died, he instructed his ‘princelings’ to abide their time, and only attack when China’s enemy is weak. Since Obama’s pivot-to-Asia only exists on paper, Hu Jintao decided to test the water by creating a new city called Sansha in the Vietnam-owned Paracel archipelago, and extend its 200-mile EEZ from Sansha to reach down areas that are close to Indonesia, Malaysia, Brunei, Singapore’s coastlines.

At the same time, China will exert some pressure on Obama (3 trillion of U.S Treasury notes) to get Taiwan to join China in harassing Japan to give up Sensaku and Okinawa (for now). Historical facts show that China owns the entire globe, but it cannot get all of its properties back yet since it is still not as militarily and economically strong enough to subjugate peoples living (rent-free) on China’s ancestral lands. FYI, Japanese are descendants of one of Chinese’s clans. Same for Koreans, and by now, Nguyen Tan Dung and the VCP should know that they were also originally Chinese.

Above narratives may sound far-fetched, but the danger of being the first country in Southeast Asia to be chinanized is very real. All Vietnamese demonstrators – online or in real life – get intimidated, harassed day and night by the VCP’s security agents. Beating up, staging accidental deaths, or outright murdering these ‘anti-China’ protestors is something that the VCP gladly does to appease its masters in Beijing. The Human Rights Watch can supply names and details of incarceration or deaths that the VCP has caused to those who still doubt my portraying of Sino-Vietnam relationship since 1990.

Few words with Hillary Clinton, Obama, and future American leaders
As stated above, U.S. Presidents have served America’s economic interests faithfully, regardless of which party they belong to. Small nations like Korea, Laos, Cambodia, Vietnam, etc. have suffered a great deal as a result of being in the U.S.’s economic orbit. To kill its own people for the benefit of the mass (i.e. few thousand troops in Pearl Harbor to get permission to enter W.W. II; hundreds of thousands killed in Europe, Africa, and Asia’s theaters during World War II; 58,000 troops killed in Vietnam; 3,800 civilians on 9/11/2001 to get permission to invade Iraq) is irreprehensible. But I guess it’s part of the price for ‘doing business’ worldwide.

We’re living in the 21st century, and I’d suggest to do away with resorting to violence (war) to settle economic differences between/among peoples/nations. As the only alternative superpower (comparing to genocidal maniacs like China or Russia), the U.S. should use its might to ‘reason’ with its partners-in-crime China and Russia. American workers rose up during the early 20th century due to unfair and exploited labor conditions. Subsequently violence broke out when workers’ demands were met with Pinkerton thugs and murderers.

Think of Hun Sen, Nguyen Tan Dung, etc. as Pinkerton thugs. When people could no longer tolerate these thugs, they would rise up, and eventually distrust America and its allies. India and the non-aligned nations were products of such distrust. Yet as a whole, they cannot muster enough solidarity to stand up against China, Russia, or the U.S. although they’re well-versed in the ‘divide-and-conquer’ (democracy vs. communism, sunni vs. shia, jews vs. arabs, etc.) strategy. Mistrust seeds have been sowed for too long that it would take a while (i.e. a legally binding framework that’s based on shared information, early conflict awareness, peaceful solutions to disputes) to uproot.

In context of Vietnam, U.S. current leaders should exert some economic pressure on Nguyen Tan Dung & Co. (VCP’s Politburo and its patron China) to lay off harassing bloggers Dieu Cay and Ta Phong Tan’s friends like blogger Me Nam, Nguyen Hoang Vi, Huynh Thuc Vy, Trinh Kim Tien, etc., and other Vietnamese dissidents, to immediately release all prisoners of conscience, to observe the Universal Declaration of Human Rights, to allow other political parties to participate in the governance of Vietnam, and lastly, for China to stop all aggressive activities in East and South China Seas as well as to stop interfering with ASEAN’s affairs if it still wants Tibet, Manchuria, Xinjiang, Yunnan, Guangdong, Guangxi etc. as parts of China.

Please let Nguyen Tan Dung and the VCP know that the Vietnamese are forgivable as a people, and we will all let bygones be bygones like Nelson Mandela has done to Apartheid folks, or like Aung Suu Kyi to her military tormentors. Nguyen Tan Dung has every reason to be fearful of all the wrongs he has done to the Vietnamese people, and I don’t blame him and his cohorts for clinging to power at all costs. He should realize that at some point in time, his life and his daughter and son’s lives will expire. The only lives that still remain are Vietnamese’s lives, and they would not be as forgivable as they are now. 37 years have been wasted by Nguyen Tan Dung & Co. to serve China’s expansion needs. It hasn’t, isn’t, and will not work as long as the U.S. still champions for human rights to everybody on this planet.

Vietnam Dissident Bloggers Warn: We Fight on despite 20-year Jail Threat

Vietnam Prime Minister Nguyen Tan Dung targets three political blogs in further crackdown.

Vietnam's Prime Minister Nguyen Tan Dung adjusts his headphones during the opening ceremony of the World Economic Forum on East Asia in Bangkok (Reuters)

An arrest warrant carrying the threat of a long jail sentence for the people behind three dissident blogs in Vietnam has been issued but bloggers Dan Lam Bao (not his real name) and Tran Hung Quoc said they would not give up - no matter what the government threw at them.

"We have no choice. Twenty years in jail to reclaim our rights as human beings is a price we are willing to pay if that is what it takes," said Dan.

A string of similar cases has already resulted in the death of the mother of one blogger, who set herself on fire in protest at the detention of her daughter in August. Dang Thi Kim Lieng, 64, died on the way to hospital in Ho Chi Minh City.

Her daughter, Ta Phong Tan, a former police officer who wrote a blog on social issues, was arrested in September 2011 on charges of propaganda against the state.

Prime Minister Nguyen Tan Dung has turned up the pressure on bloggers and ordered police to crack down. He specifically targeted Dan Lam Bao, Quan Lam Bao and Bien Dong.

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Nguyen said the bloggers should be seriously punished. "They slandered the country's leadership, fabricated and distorted information, agitated against the party and the state, and caused suspicion and mistrust in society," he said.

According to Enemies of the Internet by international watchdog Reporters Without Borders, Vietnam is the second worst country in the world for internet freedom, just behind China.

Cartoon depicting communist cops and  Vietnam's court system colluding to silence Vietnam's human-rights activists

Arbitrary detention

Human Rights Watch has accused the government of "arbitrarily" detaining dozens of netizens "because of their work as citizen journalists, environmental advocates, anti-corruption crusaders and human rights defenders."

If arrested the bloggers working with Dan Lam Bao (People Doing Journalism), Quan Lam Bao (Officials Doing Journalism) and Bien Dong could add to the growing number behind bars.

Bloggers claim that the government is responsible for even more sinister methods to shut them up. "Policemen close to the PM made death threats to us," said Tran Hung Quoc, editor of Quan Lam Bao.

"[Authorithies] summon bloggers - especially those who are well-known - for interrogation and then threaten them to set an example and intimidate those who may be thinking of supporting the free movement of independent media or joining our independent blogging community," added blogger Dan Lan Bao, who preferred to remain anonymous for security reasons.

The Communist party, which has run the country since the end of the Vietnam War in the mid-70s, finding it harder to control the voices of dissent that are fast spreading across the web.

A report by market research company Cimigo revealed that Vietnam has the fastest growing internet population in southeast Asia. One in three Vietnamese has access to the internet.

Of the three target sites, Dan Lam Bao publishes mainly political articles. Quan Lam Bao has a more sensationalist approach to political news and often targets the PM and his private life. Bien Dong is dedicated to Vietnam's long-standing quarrel with China over territory in the South China Sea.

Before the arrest warrants were issued, the government, whose censorship firewall was easy to breach, said experts, used cyber attacks against dissident blogs.

"We have been attacked continuously through IT technology since a week after we were born," said Tran.

"Authorities employ various means such as DDoS [distributed denial of service attacks], viruses, firewalls and spyware," said Dan.

The campaign against them has backfired, however, and since the arrest warrants were issed, the audience for the three blogs rocketed.

"Thanks to the prime minister's care, we have had more than 1.5 millions views. He elevated us from being an unofficial source to the status of bright star in the web firmament," said.

Prepared to face repression

Dan Lan Bao's daily number of visitors doubled to 500,000 on the day the warrants werer issued, the bloggers claimed.

"[We] are prepared to face repression and imprisonment rather than lead the life of a dumb muzzled dog that dares not to bark and remains subservient to those who abuse their power," was one comment posted on the Dan Lan Bao page.

"No one can stop us fighting against the corrupt organisations that rule our country," echoed Tran.

They urged Western governments to help their campaign.

"No one can win a battle alone. We need the West to do more and more to help freedom of speech in Vietnam," said Tran.

"This government does not care about how much suffering it inflicts on our people but it does care much about foreign investments, economic deals and trade with third countries. Possible diplomatic and economic sanctions imposed by the West for human rights' violations are a big deal to authorities," Dan said.

The crackdown on the blogs might be a consequence of the stock market tumble that followed the arrest of tycoon Nguyen Duc Kien, the founder of one of Vietnam's largest banks, said observers.

Kien was arrested in August for suspected economic violations.

Dan Lan Bao had speculated that Kien's detention was not due to financial wrongdoings but because he fell victim to a power struggle at the top of government.

The prime minister is reportedly at odds with President Truong Tan Sang and the PM's daughter is said to be close to the arrested banker.

"The prime minister's order against us is a sign of victory for our struggle for free expression and independent media as we must have been touching the right spots to trigger this reprisal," said Dan.

Tran added: "If we have to die for a better Vietnam, we would be ready for it."

Umberto Bacchi

Danlambao’s Editorial Letter in Response to the Prime Minister’s Gag Order 7169

On September 12, 2012 the Office of the Prime Minister, Nguyen Tan Dung, issued an administrative order of sanction - file number 7169 - accusing “Danlambao” of “publishing information that is false, fabricated and untruthful to slander the leadership of the nation, to agitate the people against the Party and the State, to cause doubts and create bad publicity reducing the people’s trust in the state leadership”. The Order also directs the Ministry of Public Security and the Ministry of Information Communication and Media to focus on investigations, and strictly discipline any organizations, groups or individuals who affiliate or in contact with Danlambao.

This accusation is nothing new and expected by Danlambao. We are awaiting to see how the Ministry of Public Security, together with the Ministry of Information Communication and Media would utilize their army of staff and the state’s powerful machinery, funded by our people’s tax money, to lawfully, transparently and publically prove on state-controlled media all the accusations contained in the Prime Minister’s Order no. 7169. 

However, this administrative order also directs all ministries, state agencies, local officials, and public servants “not to read, to use, to spread nor to disseminate any information from Danlambao...” This particular order is a direct violation of the freedom of expression enshrined in our constitution and a violation of the international human rights convention that Vietnam is a signatory member. All public officials, Ministries’ staff members, and public servants, first of all are citizens of Vietnam, and secondly are the people’s representatives within the system. In order to fulfil efficiently and effectively their public duties, all state members must be entitled to the rights to access and assess freely all multi-dimensional information about the state and its system of which they are a component. These rights would enable them to recognize which criticism or proposal is right so that they could correct and improve in the public interests. After all, it is their public duty to listen to the people and their aspirations. 

Danlambao does not accept and will not succumb to any state order aimed at muffling our mouth, blindfolding our eyes, and deafening our ears. No government or any political party in power has the right to choose and to decide for the people what information they can read, listen and exchange. Therefore Danlambao will continue to provide information and multi-dimensional views of all the people, and to create a forum where it is our readers who will report news, and inform and represent their own perspectives, and be heard over matters of concern which affect their daily lives. As readers and also citizen reporters, we at Danlambao, will not continue to allow our own opinion and thoughts to be “filtered”, “distorted”, “replaced”, “dripped” or “blocked” by any “sieve”, “sifter”, “net”, “funnel”, “megaphone” or “mouthpiece” or “gag order” of the State. That is the commitment from our community members of news blog, Danlambao, to each other. 

Danlambao does not side with any faction within the Party nor allows ourselves to be influenced by any “foreign” or “hostile” forces -as accused in the Prime Minister’s order-. In choosing “which side” to represent, Danlambao decides to stand with the people. Danlambao chooses the public interests to guide its editorial philosophy. And it is in the best interests of our nation that Danlambao operates and establishes its guiding principles. We do not condone any group of political elite or power to influence or control Danlambao. It is the nation that we serve, not any political party. This is Danlambao’s second commitment to our readership. 

Since the gag order 7169, which was publically broadcasted on state-controlled television and other state media in Vietnam, the number of pageviews on our news blog has soared to 500,000 pageviews the following day. In response to this apparent failure to threaten people to stop accessing and reading Danlambao, the authorities increased maximum firewalls in all regions and at all times. This measure succeeded in bringing down the number of pageviews back to 280,000 on average per day. 

In the coming days, Danlambao is calling upon all our contributors, readers, news gatherers and supporters to continue sending a clear message to the Prime Minister that we are committed to our mission for freedom of expression and will not allow the State to abuse their power to deprive us of our human right by each of us: 

- introducing a new friend to our community collective news blog, Danlambao. 

- helping someone who does not yet know how to circumvent firewall. 

- posting a positive and constructive comment to encourage others to hope for the best of our nation. 

- scribbling the address of our blogspot <danlambaovn.blogspot.com> on Dong (Vietnam currency) bills (so that it can be exchanged and reaches other potential readers far and wide across our country). 

- writing it on any walls, back-alleys or corner of the streets. 

- drawing our Danlambao symbols: white pigeon (for peace) and green heart (for love) on tables at coffee shops, restaurants, public walls, sidewalks etc. 

Together, we affirm that Danlambao is yours. Danlambao is ours. And together WE will walk the challenging journey with other free, independent journalists and bloggers to bring the truth and uncensored news with integrity and credibility to all. 

Danlambao Editorial Team 

Related Links: 

http://abcnews.go.com/International/wireStory/vietnam-pm-orders-fresh-crackdown-bloggers-17223472 - .UFIVdRhhMy5

http://www.ibtimes.co.uk/articles/385003/20120917/vietnam-bloggers-arrest-jail-dan-lam-bao.htm

http://danlambaovn.blogspot.com/2012/09/cam-ket-cua-danlambao-gui-en-cac-ban.html - .UFd_XRhhNBp (in Vietnamese) 

Vietnam Prime Minister lashes out at political blogs

HANOI: Vietnam’s Prime Minister Nguyen Tan Dung has ordered those responsible for three “slanderous” blogs, which have publicised a recent string of high-level corruption scandals, be “seriously punished”.

The hugely-popular Vietnamese-language websites Dan Lam Bao — or Citizen  Journalists — and Quan Lam Bao have been running a series of articles  detailing an intensifying factional battle within the communist country’s  ruling elite.

They have “slandered the country’s leadership, fabricated and distorted  information, agitated against the party and the state, and caused suspicion and  mistrust in society,” a report on the government website said late Wednesday.

The blogs are “villainous ploys of hostile forces,” the report, quoting the  Prime Minister, said, calling for “serious punishment” for those behind the  sites and ordering civil servants not to read them.

Vietnam, which does not allow private media and all newspapers and  television channels are state-run, routinely uses charges of spreading  anti-state propaganda to prosecute dissidents.

The rise of online blogs has vexed censors and prompted repeated crackdowns  on bloggers, many of whom are currently languishing in jail. However, blogs  remain a hugely-popular news source in the heavily-censored country.

Dan Lam Bao said in an online post that after the Prime Minister’s comments  were broadcast on state television their site recorded a record 32,000 hits in  an hour.

Over the last three months, the sites, in particular Quan Lam Bao — which  translates as “Senior Officials working as Journalists” — have been publishing  highly-sensitive information about political infighting.

They ran detailed, first-hand accounts of the August arrest of one of  Vietnam’s top banking tycoons, flamboyant multi-millionaire Nguyen Duc Kien,  and the detention of the ex-head of the bank Kien founded.

Kien is seen as being aligned with Prime Minister Dung and became the  subject of intense speculation on the blogs over his business dealings with  Dung’s daughter.

Experts have interpreted the arrest as the latest play in a long-running  battle between the Prime Minister and his rivals, chiefly party leader Nguyen  Phu Trong and President Truong Tan Sang.

Sang and Trong’s anti-corruption efforts have been given prominent coverage  on the blogs.

Both Sang and Trong are out of the country, attending an APEC summit and on  an official visit to Singapore respectively.

AFP

Vietnam Loses Glow as a Market Darling

Bad Bank Loans Cloud Country's Outlook; Talk of Bailout

The landscape in Vietnam is littered with stalled construction projects. Above, unfinished villas in Hanoi.

Until a few years ago, Vietnam was one of the world's hottest emerging markets.

Now it faces an urgent task: fix a beleaguered banking system or watch its economy continue to slip behind faster-growing neighbors.

Piles of bad loans following the financial crisis have dragged down growth in Vietnam and left banks weakened and reluctant to lend.

The government recently acknowledged that nonperforming loans—many made to inefficient state-owned companies—could be as high as 10% of the banking system, substantially higher than reported by individual banks. Fitch Ratings analysts think the number is as high as 15%.

A record number of firms are declaring bankruptcy, and in the sprawling urban areas encompassing Hanoi and Ho Chi Minh City, the landscape is littered with stalled construction projects as builders run out of cash or put on the brakes as demand for condominiums and office space dries up.

Laborers a year ago worked at a Hanoi construction site, but the real-estate market has worsened since then.

Vietnam fought off rumors in recent days that it was seeking an International Monetary Fund bailout for its banking system. An IMF spokeswoman said no requests for aid had been made. State Bank of Vietnam Deputy Gov. Le Minh Hung said in a statement on the government's website that the country had no intention of seeking a rescue.

However, the IMF and others have been advising Vietnam on how to implement a domestically financed bailout that would restore its banks to health. In its latest economic review the fund said that "quick and comprehensive action" was needed to solidify weak banks and put the economy on more solid ground.

Fears over Vietnam's banks intensified in August when one of the country's most prominent tycoons, Nguyen Duc Kien, was arrested for allegedly improperly lending money to real-estate projects. Efforts to reach Mr. Kien, who now runs a number of private investment funds and owns Hanoi's main professional soccer club, have been unsuccessful. Stocks dropped in the days following the arrest, and the Ho Chi Minh Stock Index is down 18% since the beginning of May.

Vietnam shares fell 2.2% Monday, led by selling in property-related stocks after state media reports suggested real-estate developers are trying to cut prices to boost sales of apartments.

Song Da Thang Long Joint Stock Co. is among the local developers that have struggled. In July it secured an additional loan of 300 billion dong, or around $14 million, from the state-owned Bank for Investment and Development of Vietnam to help complete its sprawling, 13-tower U-Silk City development in Hanoi's suburbs. The project began in 2009 at the height of Vietnam's property boom but quickly fell victim to the subsequent property slump and soaring interest rates.

Some question whether this cash injection is enough to keep the project alive, and Song Da Thang Long's stock price has fallen about 60% in the past six months. Chairman Nguyen Tri Dung has said the firm is trying to arrange additional credit lines with other lenders. He couldn't be reached for comment.

Economists warn that Vietnam has entered a dangerous cycle where banks, saddled with bad debts, are unwilling to lend, making it harder for businesses to invest. That feeds into slower growth, which in turn makes it harder for companies to pay back loans, again harming the banks.

The result is that Vietnam's economy is likely to grow below its potential for years to come, unless stronger steps are taken to clean up the banks, economists say.

"I don't think there's any quick fix to a problem like this, as you see in the West. It takes time to work through a solution" to a banking crisis, says Gareth Leather, an economist at Capital Economics. He figures Vietnam's economy will grow at closer to a 5% rate in coming years than the 8% the country enjoyed through much of the previous decade. Although higher than growth rates in the West, 5% is considered slow for a developing Asian country like Vietnam and might not be fast enough to generate sufficient jobs to keep its growing population employed.

The government this month revised its forecast for 2012 growth down to 5.2% from 6% previously.

Vietnam's leaders have acknowledged that a fix is needed. Prime Minister Nguyen Tan Dung in March approved a three-year restructuring plan for the banking sector designed to strengthen the country's largest banks and encourage a series of mergers among smaller lenders, but officials appear uncertain about how to put the blueprint into effect.

Plans to launch a "bad bank" to buy up distressed assets have been discussed, but a foreign investor familiar with government discussions say implementing such a solution is being delayed by Hanoi's lack of expertise in managing a modern banking system.

People familiar with government plans say there are proposals to let foreign banks increase stakes in domestic banks from the current cap of 20% in some instances to as high as 49%. Another plan would allow majority stakes, but with a time limit of five years, after which the foreign banks would have to divest.

Government officials didn't respond to requests for comment.

It isn't clear if foreign banks will be interested in increasing their commitments without having the influence of being a permanent majority owner. There are more than a dozen foreign banks with stakes in domestic banks, including HSBC Holdings PLC, Australia & New Zealand Banking Group Ltd. and Société Générale.

Many of the foreign banks are dealing with troubles at home, and are said to be reluctant to double-down without assurances of more control over local partners. One foreign banker said at least some of the foreign banks are looking to exit Vietnam at the right price, rather than put more money in.

While the banking situation has deteriorated, Vietnam has tackled other problems by taming double-digit inflation and stabilizing its currency, in part through interest-rate increases. Vietnam has relatively little foreign debt and its trade deficit has shrunk this year.

Some think the government might be able to afford to run a bailout of its banks by itself. The government's debt-to-GDP ratio is about 44%, and the annual budget deficit has fallen to less than 4% of GDP last year from 9% in 2009, well below levels of financially strained economies in Europe.

But because of the large role the state plays in industry, the government has so-called contingent liabilities to back up debt in state-owned institutions. Fitch Ratings figures those liabilities equal an additional 10% of Vietnam's $125 billion GDP.

In the meantime, investors are waiting for more action to resolve the banking situation. Louis Nguyen, chief executive of Saigon Asset Management, which invests in a broad range of Vietnamese companies, said his firm tried to launch a fund last year in conjunction with a large Vietnamese bank to invest in problem loans.

But the fund was put on hold when he found the banks were unwilling to acknowledge problems on their books and sell loans at any sort of discount to their face value.

WSJ

Corruption crackdown in Vietnam bodes well for investors

A number of high-profile arrests in recent weeks demonstrate the government’s determination to bring corporate governance up to international standards.

Vietnam is on track to be one of the next emerging market success stories, according to locally based experts, despite explosive political events in recent weeks.

The Vietnamese market was one of the fastest risers in the early part of this year, with the MSCI Vietnam index gaining 30.41 per cent between January and March.

However, on 20 August the president of the Asia Commercial Bank was taken into custody amid allegations of corruption, with further arrests following soon after. As a result, the market tanked by 10 per cent in a matter of days.

Performance of index over 6 months

Source: FE Analytics

It seemed to confirm investors’ worst fears about emerging markets – that they lack transparency and are prone to corruption – but Min-Hwa Hu Kupfer, chairman of the Vietnam Holding investment company, says this is far from the truth.

"The government is stepping up its anti-corruption drive, which is a positive," he said. "They recognised the damage that was being done to the image of the country as a place to invest in and they are reacting to it."

"As overseas investors, we think if they are moving against corruption it is very good news and we welcome it."

Juerg Vontobel, founder of Vietnam Holding, adds that overseas investors have actually reacted positively to the developments, adding to their positions, while it has largely been domestic investors who have wavered.

"The market hasn’t actually reacted violently; it lost an initial 15 per cent and then a further 5 per cent, so relatively modest falls. Foreign investors have seen it as a positive overall," he explained.

Marc Djandji, senior vice president at Indochina Capital, which runs privately managed portfolios in the region, says that the crisis changes nothing about the country’s potential.

"The demographics are good, the country is opening up to foreign investment, and it fits well into a China plus-one strategy – these are all factors that support Vietnam from the point of view of foreign investors," he said.

Djandji explains the country is the world’s largest exporter of pepper and the second-largest exporter of rice. It also exports huge amounts of coffee and seafood.

He cites the low correlation of the country to major international markets as extremely attractive for investors.

"It has not been within the same cycle as the world economy, it is still a domestic-driven, retail-driven economy. Foreign investors represent only 20 per cent of trading."

Data from FE Analytics shows that the MSCI Vietnam index has a low correlation to the FTSE All Share, MSCI Asia Pacific ex Japan and MSCI Emerging Markets indices.

Correlation of indices over 3-yrs
Name FTSE All Share MSCI AC Asia PacifiC ex Japan MSCI EM (Emerging Markets) S&P 500
MSCI VIETNAM -0.07 0.24 0.21 0.04
Source: FE Analytics

Djandji also says that the recent arrests should not deter investors.

"Our view is ‘let the market panic’; it’s positive if the government is getting a handle on corruption," he said.

Thomas McMahon

Vietnamese journalist who exposed police corruption sentenced to 4 years in jail for bribery

HANOI, Vietnam — A Vietnamese journalist who bribed a police officer as part of an undercover investigation into corruption was sentenced to four years in prison on Friday, while the officer who accepted the money got a five-year sentence, state-controlled media reported.

Hoang Khuong

Relatives and colleagues of Hoang Khuong stood up and cheered after he made a statement to the court proclaiming his innocence, according to a report by his paper, Tuoi Tre. The reaction appeared to be a rare, albeit modest, show of public defiance toward the state and its Communist rulers, who critics say are launching a renewed crackdown on the media.

All media in Vietnam is tightly controlled, but free speech activists say enforcement is getting tougher by a government that fears that hard-hitting journalism and social media are eroding its grip over the people. There are currently at least five journalists and 19 bloggers being held on various charges in Vietnam, according to the international watchdog Reporters Without Borders.

Khong, who has been in jail since February, gave a police officer a bribe of $710 in June last year in order to get an impounded motorbike returned.

The 37-year-old paid the bribe as part of reporting on police corruption and later wrote two articles about it that appeared in Tuoi Tre, triggering public anger at the police. Judges at the two-day trial in southern Ho Chi Minh city sentenced him to four years in jail, and the officer who took the money to five, according to a report in Tuoi Tre. Four other people were also sentenced to prison terms in connection with the case, including Khuong’s brother-in-law.

In a speech before his sentence was handed down, Khuong said he “had honest motives in detecting and fighting corruption in line with party and state policies” and that while he may have committed a journalistic error he had done nothing criminal.

Representatives of Tuoi Tre were not permitted to give evidence at the trial. The paper’s editors declined comment.

Editors and journalists in Vietnam do not have to submit everything they print or broadcast to state censors, but are well aware of which topics they are to avoid. In 2008, a journalist for Thanh Nien newspaper was sentenced to two years in prison for his coverage of a high-profile corruption case at the transport ministry.

Washington Post

Vietnam Arrests Ex-Shipping Boss Amid Economic Backlash

Vietnam said police arrested the former chief of a debt-laden state shipping company, the latest of several executives detained amid public furor at the nation's faltering economy.

Duong Chi Dung

Duong Chi Dung fled Vietnam in March, when police began investigating allegations of corruption at Vietnam National Shipping Lines and detained several top executives.

Vietnam's economy has stumbled badly after a decade of rapid growth, prompting the country's Communist leaders to reassess the role played by its state-owned enterprises.

The arrest comes after a pair of high-profile detentions last month. Banking mogul Nguyen Duc Kien was arrested Aug. 21 for alleged improper lending at three small private-investment firms he runs.

That was followed by the arrest of Ly Xuan Hai, the chief executive at Asia Commercial Bank, which was founded by Mr. Kien in the 1990s but which he left in 2010. Mr. Kien and Mr. Hai couldn't be reached to comment.

The arrests partly reflect growing pressure on Prime Minister Nguyen Tan Dung from within the Communist Party to clamp down on businesses, especially state-owned firms, which were perceived as ignoring management rules during Vietnam's boom years, according to diplomats and policy observers.

Figures such as President Truong Tan Sang "have sought to curtail some of [Prime Minister] Dung's freewheeling ways, including promotion of high growth rates with little attention to costs," said Carlyle A. Thayer, a professor at the Australian Defense Force Academy, where he specializes in Vietnam and Asia security issues.

In late 2010, Premier Dung defeated a leadership challenge in part by admitting his role in allowing the mismanagement of state-owned firms, particularly shipbuilder Vinashin, which nearly collapsed under debt of about $4.5 billion.

Nine Vinashin executives were sentenced this year to prison terms of up to 20 years on charges of mismanaging state resources. Since then, Premier Dung and other top leaders have attempted to accelerate their efforts to modernize the country's state sector, which accounts for around 40% of Vietnam's economy.

Progress has been slow, however, and the sense of crisis pervading what was once one of Asia's most promising new emerging markets was reinforced by the central bank's admission last month that nonperforming loans had nearly doubled this year, to about 10% of total lending.

Duong Chi Dung fled from his home just before investigators arrived, prompting widespread accusations that he had been tipped off. Local police quickly obtained an international warrant for Mr. Dung's arrest.

A government statement said he was extradited and taken into custody Tuesday, while state-run media said he was initially detained in an unidentified neighboring country.

Mr. Dung couldn't be reached to comment.

If convicted, Mr. Dung potentially faces a lengthy prison term. Police have accused Vietnam National Shipping Lines, or Vinalines, officials of mismanaging the state firm's resources by spending $5 million on a floating dock.

Government inspectors said in May that the firm also had defaulted on five loans for a total of $1.1 billion, and racked up millions more dollars in losses by buying substandard, aging foreign vessels.

Nguyen Anh Thu

Vietnam, China lurch towards crisis

The economies of the People's Republic of China (PRC) and Vietnam are both lurching into crisis, creating new opportunities for friction between the two hostile neighbors and bringing the prospect of intensified geopolitical migraine for the United States.

Certainly, the geostrategic foundations for conflict have been laid.

In a few years, Wikipedia might have an article like this:

The PRC ... was ... growing increasingly defiant against the United States. On November 3, 2018, the United States and Vietnam signed a 25-year mutual defense treaty, which made Vietnam the "linchpin" in the United States' "drive to contain China." 

On January 1, 2019, Xi Jinping [having taken over from Hu Jintao as party general secretary in 2012] declared that China planned to conduct a limited attack on Vietnam. The reason cited for the attack was the mistreatment of Vietnam's ethnic Chinese minority and the Vietnamese occupation of the Spratly Islands (claimed by the PRC). ... 

In response to China's attack, the United States sent several naval vessels and initiated a US arms airlift to Vietnam. However the United States felt that there was simply no way that they could directly support Vietnam against the PRC; the distances were too great to be an effective ally ... Vietnam was important to US policy but not enough for the Americans to go to war. When Washington did not intervene, Beijing publicly proclaimed that the United States had broken its numerous promises to assist Vietnam.

The punch line is, this Wikipedia article on the Sino-Vietnamese War already exists, with minor edits. [1] For the United States, just substitute "the Soviet Union" and for "2019" pencil in "1979".

It isn't clear who "won" the 1979 war - a subject that is still debated today by partisans on Internet message board with the civility and detachment typical of most discussions concerning Sino-Vietnamese issues. [2]

The bloody campaign revealed numerous shortcomings of the People's Liberation Army in its late-Mao/post Cultural Revolution incarnation, and the hardened, motivated, and well-equipped Vietnamese units gave a good account of themselves.

However, if it was Deng Xiaoping's intention to demonstrate to Vietnam that it would have to confront China alone and without significant assistance from the Soviet Union, he succeeded.

It is safe to say that the United States would very much prefer not to be forced into the same predicament as the Soviet Union, ie called on to make good militarily on its contain-China commitments in Asia in the case of Chinese aggression against Vietnam.

The ideal scenario for conflict-averse leaders in Beijing, Washington, and Hanoi would be for surging economic growth to create division of labor, shared prosperity, and a win-win outcome in the region.

However, thanks to the mis-steps of the North Atlantic financial combine in 2008-2009, political roadblocks to stimulus in the United States, and the German-driven austerity fad sweeping Europe, surging economic growth simply isn't on the agenda.

Dee Woo, a columnist and provocateur from the pro-panda side of the street, contended in a column that war between China and Vietnam was "inevitable" since the PRC would find the temptation to give Vietnam a military comeuppance irresistible, and the United States and the international oil companies would see no alternative to abandoning Hanoi for the sake of joint development of South China Sea oil resources. [3]

Indeed, as the bad news stacks up, the stresses on the export-reliant economies of China and Vietnam mean that competition, beggar-thy-neighbor policies, jingoism and, when necessary, confrontation are more likely to appear on each country's agenda.

Nevertheless, the signs are that the PRC and Vietnam are responding independently to their shared economic difficulties in complementary ways, giving hope that the mutual temptation to make political and nationalistic mischief will be trumped by a shared desire by each party to keep its own economy on track.

Because of its massive economic footprint, China's travails attract the most international attention. But Vietnam is experiencing severe growing pains of its own.

Prime Minister Nguyen Tan Dung's ambitious plan of nurturing chaebol-style privatized industrial and service conglomerates manifested itself in a program of indiscriminate bank lending to politically-connected cronies and creaky state-run behemoths. The program's first fruits included growth and inflation; as inflation was tamed, the world economy hit the wall, exports have slowed and corporate profits have sagged, and the problems of non-performing loans and dodgy bank liquidity have emerged.

Aggregate non-performing loans are rumored to reach 10% of loans outstanding. In a normal banking environment, that translates into insolvency. For Vietnam's small buccaneer banks, bad loans may account for a 50% share.

Nguyen Duc Kien

Bad banking news was compounded by the arrest of high-profile Vietnamese banking tycoon Nguyen Duc Kien on August 21 for murkily defined economic crimes - perhaps a pyramid scheme to obtain hundreds of millions of dollars of bank funding on dubious collateral - followed by a run on his Asia Commercial Bank.

The Vietnamese government pumped $900 million in liquidity into the banking system to make sure no anxious depositor would go home empty-handed. Vietnam's stock index, heavily weighted toward financial companies, sagged 9%.

These recent developments were contemplated with remarkable equanimity by the international analytic and pundit community. Kien's detention was viewed as a consequence of a power struggle between his economic godfather, Prime Minister Dung, and the more old-school communists clustered around the President, Truong Tan Sang, rather than a harbinger of impending economic collapse.

Apparently, Leninist rigor counts for more than free market discipline with emerging-market financiers.

Kien's arrest - following a management purge at Vietnam's particularly inept state-owned shipbuilder, Vinashin, and the government mediated merger of a faltering bank with a stronger rival - was seen as the culmination of a process of political correction meant to ensure social and economic order.

Perhaps international optimism contains a dash of wishful thinking attributable to capitalist blue chip Standard Charter's 15% share in Kien's flagship bank, ACB, and the eagerness of foreign financiers to participate in the restructuring of Vietnam's banking industry as investors and/or M&A overlords. Standard & Poor's decided that the government had a handle on the banking situation and contagion - a pervasive loss of confidence and evaporation of liquidity that characterized the Wall Street crisis of 2008 - was unlikely, at least for now. [4]

With price/earnings ratios down to 9.4 as a result of the collapse of the price of equities, Vietnamese stocks turned into a modest buying opportunity.

Perhaps attitudes within the ruling circles of the Vietnamese Communist Party are less blase. Dropping the hammer on Kien involved sizable expenditure of cash to prop up the banking system just for the day; a certainpercentage of that cash turned into private gold holdings (Vietnam reportedly has the highest per capita holdings of gold in the world) that probably won't come back into the banking system as deposits any time soon.

If, as news reports imply, Kien was running a pyramid scheme involving trillions of dong in cash obtained from Vietnamese banks through loans or bond sales based on dodgy assets, it would also appear to be untenable for banks not to write down their losses and they will have to be recapitalized largely at government expense. [5]

It isn't as if vibrant economic performance and elite unity made this a good time to clear out the financial and political deadwood and undertake an expensive overhaul of the banking system. As Agence France-Presse reported from Hanoi, things aren't going particularly well:

[W]ith economic growth now just 4.4% year-on-year in the first half of 2012, foreign direct investment down nearly 30% in the same period and toxic debt in the fragile banking system at "alarming levels" according to the central bank, there has been increasingly vocal criticism of Dung. 

"Never has Vietnamese society faced so many unheavals which weaken the Party's leadership and threaten the survival of the whole political regime," a retired National Assembly deputy told AFP. "Some party leaders have lost patience, and feel it is time to act to eliminate these potential threats and regain public confidence," he added, speaking on condition of anonymity. 

In a scathing op-ed on Thursday, President Truong Tan Sang - one of Dung's main political rivals - said that "Vietnam is now under not insignificant pressure because of broken state-owned enterprises."

This is a degree of economic, social, and political difficulty that does not automatically translate into a "let bygones be bygones" atmosphere between Prime Minister Dung and his critics in the Politburo, especially if public dissatisfaction turns militant.

As a prominent Vietnamese economist told the New York Times:

The problem in Vietnam is a very toxic cocktail from the European debt crisis, the stagnation in the US economy plus a very critical situation in the domestic economy. It's a very dangerous mixture. [6]

Economic crisis, corruption, public discontent, and a leadership split were the ingredients for near catastrophe for the Chinese Communist Party in 1989. If all those conditions apply to Vietnam in 2012, it will be a difficult time for the Vietnamese Communist Party and foreign investors as well.

At the same time, it appears the Vietnamese government is ill-equipped to deliver another round of crowd-pleasing stimulus without reigniting inflation, reinflating its real estate bubble, or digging a deeper hole for its banks with more non-performing loans.

The regime may well decide the best way to keep people in the factories and off the streets is to crank up the export engine through another devaluation of the dong, even in the face of slackening global demand.

Up north, China is facing a similar situation, without as much political heartburn. Having dealt summarily with loose cannon Bo Xilai, the disgraced Chongqing municipality party party chief, the party appears committed to maintaining party unity in the run-up to the leadership transition. The PRC is also trying to wean itself off its reliance on exports.

The impulse to correct imbalances in the Chinese economy is represented by the reformists advising Premier Wen Jiabao. The reformists' optimistic scenario involves China renouncing the easy gratification of infrastructure spending, export processing, and indiscriminately shoveling money into the maw of state-owned industries for the sterner pleasures of modernizing the Chinese economy through increased private investment and public consumption.

When international economic growth slowed (and the inflationary overhang of the 2008-2009 stimulus militating against another massive injection of cash into the Chinese economy), Wen's team seek to turn lemons into lemonade by using the current challenges as an impetus to reform.

However, gliding up the value chain and avoiding the middle income trap is neither a quick nor easy process, while the degradation in global demand has been rapid and unforgiving. According to China's July trade figures, exports to the United States flatlined year-on-year, while exports to the EU collapsed, 16.2% lower than last July.

The bad news was compounded by confirmation of a prolonged underperformance in consumption and disappointing profits or losses reported by consumer goods producers and retailers. If the Chinese government had any hopes of decoupling domestic consumption from the vagaries of the export market, they have been put paid by the simultaneous pricking of the real estate bubble, flabbiness in the stock market, and attendant losses among the asset-trading classes.

Per Bloomberg:

Passenger-vehicle sales trailed analysts' estimates in July. Sportswear seller Li Ning Co shut 1,200 stores in the first half and department-store chain Parkson Retail Group Ltd's same-store sales rose at less than a quarter the pace of a year earlier. Gome Electrical Appliances Holding Ltd. (493) said it would report a first-half loss on lower sales. 

"The pressure on retail sales is growing bigger and bigger," said Shen Jianguang, Hong Kong-based chief Asia economist at Mizuho Securities Asia Ltd. "When exports are fragile and investment is weak, if companies started to reduce their production or workforce, how can it be possible for consumer spending to stay strong? 

"Consumer spending is decided critically by income, and as we can see, China's industrial profits are falling at a faster speed in July, which means more headwinds for employee compensation, wages and bonuses," said Zhang Zhiwei, chief China economist at Nomura Holdings Inc. in Hong Kong. "For non-wage income such as investment income from property and stock markets, you don't have to be an expert to tell that most people are actually losing money, so overall consumer disposable income is actually very weak." [7]

The specter of China failing to reach its annual export target of 10% growth (and thereby missing its GDP growth target of 7.5%) was apparently enough to send Wen Jiabao, essentially the PRC's apostle of doing something other than exporting, to the nation's export powerhouse, Guangdong, with words of encouragement.

However, depreciating the yuan, the only export-promotion quick-fix method with a hope of efficacy, is apparently the trade policy that dares not speak its name, perhaps because a combination of weak international demand and European and US protectionism stand ready to slam the door on this particular economic escape hatch.

Therefore, when describing what exporters should do when faced with slack international demand, increasing labor costs, and a strong currency, all Wen could do was nibble around the edges with empty exhortations to innovate and promises of regulatory relief. To put it cruelly, he sounded just like an American or European politician beating the hollow trade promotion drum:

Wen urged authorities to continue to implement and improve export policies, including fast-tracking tax rebates, expanding export credit insurance scale, bettering services to facilitate trade, cutting inspection directory and canceling unreasonable fees to ease burdens on enterprises. 

He said China should guide financial institutions to increase supply of currency hedge products to prepare for market changes. Meanwhile, Wen encouraged foreign trade enterprises to cultivate more self-developed brands, and build up international sales network. He said China should properly cope with trade frictions to minimize their negative impacts on the economy while improving investment climate for foreign capital. 

Wen noted that China's recent fine-tuning policies, especially those created since May, had produced noticeable effects in boosting market confidence and lift the economy. These pro-growth measures include more aggressive tax reduction, issuing subsidies to support enterprises' technology upgrades, and opening state-run sectors to private investors. [8]

The markets seem to be relying on expectations that the Chinese government will forget about reformism and incremental measures, turn its back on devaluation, and eventually roll out the big gun: stimulus to keep factories humming and move goods out of warehouses.

The euphemism for this expectation appears to be "confidence", a state of mind Wen repeatedly invoked on his trip to Guangdong. As Simon Rabinovitch put it in the Financial Times' Beyondbrics blog in a whistling-past-the-graveyard post that seems to embody the same kind of anxious hopefulness displayed by Westerners trying to will away the problems of the Vietnamese economy:

Wen Jiabao, China's premier ... has issued a rallying cry for "confidence". Sure, talk can be cheap. But have a look at the premier's track record when he calls for confidence in the government's economic policies. He doesn't dish the word out lightly. 

The first time was in September 2008, shortly after the collapse of Lehman Brothers. "Confidence is more important than gold and money," he said ... Weeks later, the government launched a mammoth stimulus package that powered the economy through the global financial crisis. 

Over the following three years, Wen has mentioned confidence several times - it is a hard word for a national leader to avoid. But yesterday was the first time since the news conference in March 2009 that he made confidence such a dominant theme in a speech. ... 

If history is any guide, Wen might just know what he's talking about. [9]

It appears that foreign and domestic stimulus junkies may have to wait for their "confidence" fix until early next year, as the Chinese government hopes against hope that international demand picks up, and tries to forestall inflation and a return to the blind craze of investing in real estate and other fixed assets in favor of a new kind of restructuring.

However, Wen's agenda of targeted and delayed stimulus is a hostage to circumstances: the dismal international economic outlook, the economic and political costs of a painful restructuring of China's labor-intensive export industries, and the strength of politically and ideologically motivated opposition to his agenda in the Politburo.

If Wen can't pull it off, the prognosis is for a more profligate and forgiving version of stimulus and some oblique form of currency devaluation, perhaps in the form of quantitative easing.

Even so, the fundamentals of the Chinese economy, the potential for a complementary trade and economic relationship with Vietnam, and the fraught circumstances of US-China relations in an election year still make significant, overt currency devaluation, a trade war with ASEAN competitors, and the prospects of a real war with Vietnam thankfully more distant.

Notes:
1. Sino-Vietnamese War, Wikipedia.
2. A Self Humiliation For China (China-Vietnam War 1979), YouTube. 3. Why A War Between China And Vietnam Is Inevitable, Business Insider, Jul 22, 2011.
4. S&P Says Vietnam Banks' Risks Highlighted; Contagion Unlikely, Reuters, Aug 28, 2012.
5. What tactics Kien used to do illegal business?, Vietnam Net, Aug 24, 2012.
6. Vietnam faces economic meltdown - Columnist - New Straits Times Vietnam faces economic meltdown, NST.com, Aug 25, 2012.
7. China Retailers Lose Steam, Deepening Wen's Challenges, Bloomberg, Aug 29, 2012.
8. Premier urges targeted, effective efforts to stabilize export growth, Xinhua, Aug 25, 2012.
9. Wen Jiabao, the confidence man, Financial Times, Aug 26, 2012.


Peter Lee