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Japan Times
4 days ago
- Business
- Japan Times
Thailand hits Cambodia with F-16s as border clash erupts
Thai F-16 fighter jets struck military sites in neighboring Cambodia as a border dispute between the Southeast Asian nations, stretching back decades, erupted in fresh clashes that killed at least 14 people. Both nations accused each other of starting the worst border violence in about 14 years, which also left dozens injured amid conflict in six locations along their frontier. The eruption Thursday, which included reports of artillery and rocket fire, follows a buildup of tensions since a Cambodian soldier was killed in an exchange of gunfire in May and a chain of political events in Bangkok that has threatened the ruling coalition. Thailand said its fighter jets hit at least three Cambodian army bases near the border in separate airstrikes and reported that rockets fired from Cambodia killed several civilians. An 8-year-old boy was among 14 Thai fatalities, which included one soldier, according to revised health ministry figures released Thursday evening. It added 32 civilians and 14 soldiers were wounded. There was some variance in the figures reported by authorities in Bangkok, and casualties on the Cambodian side remain unclear. Thailand's military operation has been successful but may "take some time,' the army said in a briefing late Thursday. Cambodian Prime Minister Hun Manet asked the United Nations Security Council to convene an urgent meeting, citing "extremely grave aggressions' that it was forced to respond to in self-defense. Army vehicles drive along a road in Buriram province, after Thailand scrambled an F-16 fighter jet to bomb targets in Cambodia following artillery volleys from both sides that killed civilians, in Thailand on Thursday. | REUTERS "The dispute is escalating rapidly and could turn into a serious conflict if left unattended,' said Jayant Menon, a senior fellow at the ISEAS-Yusof Ishak Institute in Singapore. "Although the conflict is unlikely to spread beyond the two countries, it will disrupt trade and people movement, which will negatively affect the regional economy.' The fighting comes as both countries face trade threats from U.S. President Donald Trump's tariff war. The baht, which earlier rose to its highest since February 2022, declined 0.3% to 32.25 per dollar. Thai stocks closed 0.6% lower. The neighbors have a long history of border tensions, although relations have remained largely stable since the 2011 conflict, which left dozens dead. The last major flareup centered on the Preah Vihear temple, a longstanding point of contention dating to French colonial rule. Much of the contemporary border disputes between the neighbors stem from different maps based on the text of Franco-Siamese treaties of the early 1900s that laid out boundaries between Thailand and Cambodia, then part of the French Indochina. There are no bilateral talks with Cambodia yet, acting Prime Minister Phumtham Wechayachai said after a meeting of Thailand's security council, describing the "clashes' as falling short of a full-scale conflict. "This is not a declaration of war,' Phumtham said. Still, Thailand ordered evacuations within 50 kilometers of the border. Malaysian Prime Minister Anwar Ibrahim, the current chair of regional group Asean, said he has spoken with the leaders of both countries and appealed for an immediate ceasefire. "Malaysia stands ready to assist and facilitate this process,' Anwar said in a statement. Both the U.S. and China expressed concern over the violence and sent advisories to their citizens. "The United States urges an immediate cessation of hostilities, protection of civilians, and a peaceful resolution of the conflict,' State Department deputy spokesperson Tommy Pigott told reporters in Washington on Thursday. Chinese Ministry of Foreign Affairs spokesperson Guo Jiakun urged both sides to "properly address issues through dialogue and consultation.' Cambodia's defense ministry spokesperson Maly Socheata condemned the Thai military's action, saying Thailand's use of heavy weapons and deployment of troops "to encroach on Cambodian territory is a clear violation' of international law. Diplomatic downgrade Since the clash in May, both countries have massed troops along the frontier and limited land crossings that are vital trade routes. The fighting Thursday came just hours after Thailand expelled Cambodia's ambassador and recalled its own envoy from Phnom Penh in response to a landmine explosion that injured five Thai soldiers on Wednesday. People wait in line to get food at a shelter following recent clashes along the disputed border between the two countries, according to authorities people have been killed across three border provinces, in Buriram province, Thailand, on Thursday. | REUTERS In retaliation, Cambodia further downgraded diplomatic ties by withdrawing its diplomats and requesting that Thailand do the same, according to Cambodian state media. Thailand, a long-standing ally of the U.S., has a military edge over its neighbor. Cambodia lacks air assets to counter Thailand's advanced jets, Bloomberg Intelligence analysts Eric Zhu and George Ferguson wrote in a note, but the country possesses Chinese-made KS-1C air defense systems. Those have a reported range of as much as 70 km, according to the Missile Defense Advocacy Alliance. As well, Cambodia doesn't have any combat aircraft in its inventory, according to the International Institute for Strategic Studies in London, with its military only flying transport planes and helicopters. Thailand's air force has two squadrons of modern Lockheed Martin Corp. F-16s and a squadron of Saab Gripen C/Ds, according to IISS. Thai politics The dispute has already shaken Thailand's domestic politics. In early July, a court suspended Prime Minister Paetongtarn Shinawatra pending an investigation into allegations of ethical misconduct in her handling of the border issue. Paetongtarn had attempted to defuse tensions in a telephone call with former Cambodian leader Hun Sen, father of the current premier. But the call was leaked, generating a backlash at home and protests demanding her resignation. She has until July 31 to submit her defense in the court case. After the clash in May, Cambodia called for the International Court of Justice in The Hague to help resolve four disputed land areas. Thailand, however, said it does not recognize the court's jurisdiction in the matter.
Miami Herald
5 days ago
- Business
- Miami Herald
Thailand hits Cambodia with F-16s as deadly border clash erupts
Thai F-16 fighter jets struck military sites in neighboring Cambodia as a border dispute between the Southeast Asian nations, stretching back decades, erupted in fresh violence that killed at least 11 people. Both nations accused the other of starting the worst border violence in about 14 years, which also left dozens injured amid clashes in six locations along their frontier. The eruption Thursday, which included reports of artillery and rocket fire, follows a build up of tensions since a Cambodian soldier was killed in an exchange of gunfire in May and a chain of political events in Bangkok that has threatened the ruling coalition. Thailand said its fighter jets hit at least three Cambodian army bases near the border in separate airstrikes, and reported that rockets fired from Cambodia killed several civilians. An eight-year old boy was among 11 Thai civilian fatalities, while 24 others were injured, the country's health ministry said. Acting Prime Minister Phumtham Wechayachai said one soldier has been killed. There was some variance in the figures reported by authorities in Bangkok, and casualties on the Cambodian side remain unclear. Thailand's military operation has been successful but may "take some time," the army said in a briefing late Thursday. Meanwhile, Cambodian Prime Minister Hun Manet asked the U.N. Security Council to convene an urgent meeting, citing "extremely grave aggressions" that it was forced to respond to in self defence. "The dispute is escalating rapidly and could turn into a serious conflict if left unattended," said Jayant Menon, a senior fellow at the ISEAS-Yusof Ishak Institute in Singapore. "Although the conflict is unlikely to spread beyond the two countries, it will disrupt trade and people movement, which will negatively affect the regional economy." The fighting comes as both countries face trade threats from U.S. President Donald Trump's tariff war, with both expected to see exports to the world's richest consumer market impacted. The baht, which earlier rose to its highest since February 2022, declined 0.3% to 32.25 per dollar. Thai stocks closed 0.6% lower. The neighbors have a long history of border tensions, although relations have remained largely stable since the 2011 conflict, which left dozens dead. The last major flare-up centered on the Preah Vihear temple, a longstanding point of contention dating back to French colonial rule. Much of the contemporary border disputes between the neighbors stem from different maps based on the text of Franco-Siamese treaties of the early 1900s that laid out boundaries between Thailand and Cambodia, then part of the French Indochina. There are no bilateral talks with Cambodia yet, Phumtham said after a meeting of Thailand's security council, describing the "clashes" as falling short of a full-scale conflict. "This is not a declaration of war," Phumtham said. Still, Thailand ordered evacuations within 50 kilometers (31 miles) of the border. Malaysian Prime Minister Anwar Ibrahim, the current chair of regional group Asean, said he aims to speak with the leaders of both countries and called on them to stand down and enter negotiations. "Peace is the only option available," he told reporters Thursday. Both the U.S. and China sent advisories to their citizens about the clash, with Beijing saying it was deeply concerned over the attacks. "Thailand and Cambodia are both China's friendly neighbors and important members of Asean," China's Ministry of Foreign Affairs spokesman Guo Jiakun said in a briefing. Thailand also ordered the evacuation of civilians from at least four border provinces as a precautionary measure, the Interior Ministry said, while its embassy in Phnom Penh advised citizens to leave the country. Cambodia's defense ministry spokesperson Maly Socheata condemned the Thai military's action, saying Thailand's use of heavy weapons and deployment of troops "to encroach on Cambodian territory is a clear violation" of international law. Diplomatic downgrade Since the clash in May, both countries have massed troops along the frontier and limited land crossings that serve as vital trade routes. The fighting Thursday came just hours after Thailand expelled Cambodia's ambassador and recalled its own envoy from Phnom Penh in response to a landmine explosion that injured five Thai soldiers on Wednesday. In retaliation, Cambodia further downgraded diplomatic ties by withdrawing its diplomats and requesting that Thailand do the same, according to Cambodian state media. Thailand, a long-standing ally of the U.S., has a military edge over its neighbor. Cambodia lacks air assets to counter Thailand's advanced jets, Bloomberg Intelligence analysts Eric Zhu and George Ferguson wrote in a note, but the country possesses Chinese-made KS-1C air defense systems. Those have a reported range of up to 70 kilometers (43 miles), according to the Missile Defense Advocacy Alliance. As well, Cambodia doesn't have any combat aircraft in its inventory, according to the International Institute for Strategic Studies in London, with its military only flying transport planes and helicopters. Thailand's air force has two squadrons of modern Lockheed Martin Corp. F-16s and a squadron of Saab Gripen C/Ds, according to IISS. Thai politics The dispute has already shaken Thailand's domestic politics. In early July, a court suspended Prime Minister Paetongtarn Shinawatra pending an investigation into allegations of ethical misconduct in her handling of the border issue. Paetongtarn had attempted to defuse tensions in a phone call with former Cambodian leader Hun Sen, father of the current premier. But the call was leaked, sparking a backlash at home and protests demanding her resignation. She has until July 31 to submit her defense in the court case. After the clash in May, Cambodia called for the International Court of Justice in The Hague to help resolve four disputed land areas. Thailand, however, said it does not recognize the court's jurisdiction in the matter. Following a landmine incident last week in which a Thai soldier lost his leg, Thailand initiated a diplomatic campaign targeting Cambodia. Bangkok has briefed foreign military attachés and diplomats stationed in the country and is seeking action under the United Nations' Anti-Personnel Mine Ban Convention, while also engaging in bilateral efforts to resolve the dispute. ------------- -With assistance from Jon Herskovitz, Gerry Doyle, Marcus Wong, Kok Leong Chan, James Mayger, Pathom Sangwongwanich and Eduard Gismatullin. Copyright (C) 2025, Tribune Content Agency, LLC. Portions copyrighted by the respective providers.
India.com
19-07-2025
- Business
- India.com
Is China's ‘economic slave' sending troops to Ukraine to support Russia? Not Pakistan or Sri Lanka, it is....
The close partnership between Russia and China is no longer a secret. Despite Western sanctions, China has been very supportive of Russia, which has helped bolster its economy and its military. Now, numerous media outlets are reporting that a nation that is deeply indebted to China may send troops to assist Russia. That nation is Laos, which owes China billions of dollars. A few years back, Laos' vital energy grid was taken over by China after it defaulted on its loans. Laos also has significant military and diplomatic ties to Russia, and there is concern that it may become directly involved in helping bolster Moscow's military efforts. Which country is being called China's 'economic slave' in this context? According to the South China Morning Post(SCMP), Laos state media reported this week that the government rejected recent reports in international media that it would send troops to support Russian military operations in Ukraine. The reports claimed that Moscow was trying to recruit Laotian soldiers and civilians with the promise of financial incentives and Russian citizenship. Reports also claimed that Russia identified Laotian military engineering units to offer support, i.e., mine-clearing support in the Kursk region at the outset. The reports, citing Ukraine's Main Directorate of Intelligence, stated that the Kremlin aims to involve allied states in the war under the 'under the pretext of carrying out humanitarian projects in Russian regions bordering Ukraine.' 'Laos is the latest country Russia is attempting to pull into the war,' the agency noted. Which major country provides economic and diplomatic support to Russia without condemning its actions? With the country's strong ties with Moscow and demining expertise, concerns about the Southeast Asian nation playing a role in the conflict seemed reasonable. Laos said the allegations were baseless and were intended to confuse and damage the country's international reputation. Laos stressed there was no evidence to support the allegations, characterising them as a 'deliberate distortion of the truth' to create confusion in the world community. The Thongloun Sisoulith government also announced that it has no policy or intention to dispatch military personnel or citizens to intervene in any other countries' internal conflicts, the report mentioned. According to Ian Storey, a senior fellow at the Singapore-based ISEAS-Yusof Ishak Institute, these claims originated from Ukraine's military intelligence, which has 'a track record of false or exaggerated claims'. 'However, the story was somewhat plausible given the good relations between Laos and Russia,' Ian Storey, senior fellow at the ISEAS-Yusof Ishak Institute based in Singapore, was quoted as saying by the South China Morning Post. The two nations' close historical ties began in the Cold War situation, with the Soviet Union supplying essential support to the Laotian Communist Party. Ian Storey, author of Putin's Russia and Southeast Asia: The Kremlin's Pivot to Asia and the Impact of the Russia-Ukraine War, notes that Vientiane is thankful to Moscow and has not condemned Russia's full-scale invasion of Ukraine in 2022.
The Diplomat
15-07-2025
- Politics
- The Diplomat
Ian Storey on Russia's Turn to Southeast Asia
Over the past decade, under President Vladimir Putin, Russia has taken steps to expand its economic, political, and security relations with Southeast Asia. This has involved efforts both to build upon the historical influence of the Soviet Union in the region, particularly in Indochina, and to forge new partnerships with rising middle powers such as Malaysia and Indonesia. In a new book, 'Putin's Russia and Southeast Asia: The Kremlin's Pivot to Asia and the Impact of the Russia-Ukraine War,' Ian Storey charts the course of this policy toward Southeast Asia and ASEAN since Putin was elected president in 2000, and especially since the beginning of his third presidential term in 2012. The first major study of Russia-Southeast Asia relations since the end of the Cold War, Storey's book examines both the causes and outcomes of Russia's increasing engagement with Southeast Asia, and the impact that the invasion of Ukraine in 2022 has had on this trajectory. Storey, a senior fellow at the ISEAS-Yusof Ishak Institute in Singapore and the co-editor of its journal 'Contemporary Southeast Asia,' spoke with The Diplomat's Southeast Asian Editor Sebastian Strangio about how the Kremlin's policy has shifted during Putin's long tenure, and the sources and limits of Russian influence in Southeast Asia. In the Introduction to your book, you write that Russia has 'the smallest economic footprint in Southeast Asia, the least geopolitical influence, and the lowest strategic significance,' which accounts for the dearth of academic writing on Russia's relations with the region since the end of the Cold War. What made you decide to study this topic in depth? As I argue in the Introduction, while Russia is not a major player in the region, it is a player nevertheless and has some undeniable strengths that make it worthy of scholarly attention. While Russia cannot be considered a great power in Southeast Asia, most of the ASEAN member states recognize that at the global level, it does have certain great power attributes, including its size, population, nuclear arsenal and vast natural resources. Moreover, from a geopolitical perspective, Russia is a member of the U.N. Security Council and is an influential player in many regions of the world, including the post-Soviet space (especially Central Asia), Europe, the Arctic, the Middle East and Africa. Moscow also has an increasingly consequential strategic partnership with China, retains some influence on the Korean Peninsula and, since 2022, has reinvigorated its alliance with North Korea. Until the mid-2010s, Russian defense companies sold billions of dollars of equipment to regional states, including Vietnam, Malaysia, Indonesia and Myanmar. Russia has important energy interests in Southeast Asia, including in the South China Sea, and is a major exporter of food and fertilizers to the region. Russia is also a dialogue partner of ASEAN, albeit a problematic one at times (it has tried to block Western countries from becoming observers to the ASEAN Defense Ministers' Meeting Plus observer groups). In sharp contrast with the West, Russia has a relatively benign image in Southeast Asia, isn't perceived as a threat by any country, and people have a generally positive impression of President Putin. In some parts of Southeast Asia, Putin's image is that of a strongman standing up to the West, and this resonates well. Interestingly, despite its brutal war in Chechnya, Russia is perceived by the Muslim-majority countries in Southeast Asia as being Islamic-friendly, largely due to its long-standing support for Palestinian statehood. Yet despite these factors, not one single-authored book on Russia and Southeast Asia had been published since the end of the Cold War. In 2021, I decided to close that important gap in the academic literature. In February 2022, Russia invaded Ukraine and that event, and how Southeast Asian countries responded to it, made the task all the more timely and important. How did Russia's influence in, and approach toward, Southeast Asia evolve between President Vladimir Putin rise to power in 2000 and his invasion of Ukraine in February 2022? Where, and in which countries, do you think Russia made the most significant inroads? When Putin became president in 2000, he felt that his predecessor, Boris Yeltsin, had neglected Southeast Asia, especially Russia's Cold War allies Vietnam and Laos. He put bilateral relations with both of those countries back on track, and encouraged Russian defense companies to sell more arms to regional states. Under Putin, Russia also sought a closer relationship with ASEAN even though it was not seen as a very important multilateral forum. But the real change came in 2012, when Putin began his third term as president and introduced his 'Turn to the East,' or Asia Pivot. Although China remained at the center of the Kremlin's Asia policy, Russia did make some important gains in Southeast Asia over the next decade: two-way trade with the ASEAN-10 began to grow, Russia started to attend the East Asia Summit and ASEAN-Defense Ministers' Meeting Plus, persuaded Vietnam and Singapore to sign free trade agreements with the Russian-led Eurasian Economic Union (EAEU) and appeared on the verge of winning some major defense contracts, including with U.S. allies, the Philippines and Thailand. After the military coup in Myanmar in 2021, Russia forged close ties with the junta. But as I argue in the book, from the mid-2010s, it began to lose ground: two-way trade with the ASEAN-10 peaked, its arms sales dropped off a cliff due to Western sanctions and its vaccine diplomacy during the COVID-19 pandemic was a flop. Then came the war. You began working on this book prior to the Ukraine invasion, an event that you write 'would complicate my endeavor, but make it much more interesting, timely, and relevant.' How has the war changed Putin's view of Southeast Asia and his policy towards it? Since Russia's full-scale invasion of Ukraine, Southeast Asia's importance to Russia has increased significantly. In terms of regional responses to the invasion, I think the Kremlin can be fairly satisfied with the region's responses. While only Myanmar endorsed the invasion, Singapore was the only country that condemned Russia by name and imposed financial sanctions. All of the other ASEAN states took an essentially neutral position. Russia's closest friends in the region, Vietnam and Laos, abstained on votes at the United Nations General Assembly (UNGA) which condemned the attack on Ukraine, while the other ASEAN states (and Timor-Leste) more or less voted consistently in support of the resolutions but went no further. Western attempts to portray Russia as an international pariah have clearly failed in Southeast Asia, as since February 2022, six regional leaders have met with Putin in person, and in June 2024, the Russian leader paid a state visit to Vietnam. In addition, the Russia-Ukraine War has barely impacted Moscow's dialogue partnership with ASEAN, even though the invasion violated all of ASEAN's core principles, which are enshrined in the Treaty of Amity and Cooperation and which Russia endorsed in 2004. Putin must also have been pleased that Indonesia, Thailand, Malaysia and Vietnam all became BRICS partners in 2024 during Russia's chairmanship. The biggest hit Russia has taken in Southeast Asia has been to its arms sales, which in some ways was its most lucrative interest in the region. As Western countries tightened sanctions against Russia, Southeast Asian countries began to question Moscow's reliability as an arms seller. Consequently, sales have fallen from a peak of $1.4 billion in 2014 to less than $100 million last year. It's highly doubtful if Russia's defense sector can recover in Southeast Asia, as regional states can buy from traditional suppliers in the U.S. and Europe, and newcomers such as South Korea and Turkey. Given Moscow's pariah status in the West since 2022 (and to some extent since 2014), what do you think explains the decision of so many Southeast Asian governments to maintain, even to deepen (in the case of Malaysia, Indonesia, and others) their relations with Russia since 2022? What does this say about Southeast Asian strategic inclinations, and their views of how the United States and other Western countries have sought to frame the Ukraine war? As I mentioned earlier, most Southeast Asian countries have adopted a neutral position towards the Russia-Ukraine War for several reasons. They don't want to get embroiled in the disputes of the major powers, especially over an issue in which they do not believe their own interests are directly at stake. There is also a degree of empathy towards the Russian narrative that it was provoked into attacking Ukraine due to NATO's eastward expansion, and that Ukraine is simply a proxy of the U.S. More importantly, perhaps, a number of Southeast Asian countries, and especially the Muslim-majority states Indonesia and Malaysia, have accused the West of hypocrisy, pointing out that the U.S. invaded Afghanistan and Iraq in the early 2000s. These accusations of double standards have been greatly amplified since Israel invaded Gaza in October 2024. Political leaders in Indonesia and Malaysia have asked why it is that the West was so quick to condemn Russian atrocities in Ukraine, but less keen to do so when it comes to Israel's actions. Most Southeast Asian countries voted in support of the UNGA resolutions, which condemned Russia, but that is the limit of their actions against Russia. The majority of ASEAN member states want to move on and engage Russia on issues that they consider important, especially trade, despite Moscow's shallow economic footprint in the region. Indonesia and Malaysia, in particular, seem keen to strengthen their countries' professed non-aligned stance by pursuing a more balanced foreign policy, and especially closer ties with both Moscow and Beijing. That may include arms purchases from Russia and China. Indonesia is looking to Russia to help improve its food security, including stepping up imports of Russian wheat, cooking oil and fertilizers. Several Southeast Asian countries, such as Myanmar, Vietnam, and Indonesia, are considering partnering with Russia to establish civilian nuclear power programs. In a nutshell, what is Putin's 'pitch' to the region? Putin's pitch to the region is sixfold. First, Russia is a great power and no problem in any part of the world can be resolved without it. Second, in the escalating strategic rivalry between the U.S. and China, Moscow represents a 'third pole' of equal rank to Washington and Beijing. Third, Russia is a valuable source of advanced technology (especially nuclear power, weapons, and space). Fourth, Russia's Greater Eurasian Partnership (GEP) can provide a beneficial framework of cooperation among the EAEU, the Shanghai Cooperation Organization, and ASEAN. Fifth, Russia can help promote the voices of the Global South through platforms such as BRICS. And sixth, among the great powers, only Russia and China truly respect ASEAN centrality. But in many respects, Russia's pitch is hard to sell to Southeast Asian leaders. Few ASEAN member states perceive Russia to be a great power in the region because trade links are insubstantial and Moscow cannot provide significant investment or developmental assistance. Nor is it a major security provider. As such, no Southeast Asian leader places Russia on a par with the US and China. ASEAN as an organization has been lukewarm towards the idea of a free trade agreement with the EAEU as well as the GEP because, unlike China's BRI, there's no money supporting the initiative. When it comes to arms, nuclear power and space cooperation, Southeast Asian states have many other countries they can choose to partner with, and Russia is seldom their first choice (except for Myanmar, which basically has to choose between either Russia or China). And while four Southeast Asian countries have joined BRICS, and three others have expressed an interest in joining, the main motivation is China's economic heft, not Russia's.
Mint
14-07-2025
- Business
- Mint
Your next lawn chair is coming from Vietnam, but it's still kind of Chinese
In May, hundreds of workers at a furniture factory here got a nice surprise. Their Chinese bosses were giving them a nearly 45% raise. Factory owner Ren Li said so many other Chinese factories were moving to Vietnam to avoid high U.S. tariffs that he needed to give his workers a big increase to keep them from getting poached. 'They just flood in," Li said of Chinese companies. 'And that will cause a tsunami." For factory owners, the economic logic is simple. Goods made in China generally face tariffs of 40% to 50% when imported into the U.S. Vietnam is a relative bargain after President Trump this month announced a new tariff rate of 20%, upholding expectations that Vietnam would get more-lenient treatment. Western buyers such as Lowe's and Hasbro have promised to cut their exposure to China. The rush to produce in Vietnam and other lower-tariff countries, far from wiping China off the map, keeps Chinese companies at the center of the export trade. Chinese businesspeople typically have the edge when it comes to building factories anywhere in the world—even in the U.S. 'They have all the technology, all the know-how," said Le Hong Hiep, a senior fellow at Singapore's ISEAS-Yusof Ishak Institute think tank. 'It will take them less time to set up factories in Vietnam than for local companies to develop their own capabilities." Outdoor furniture awaits shipment in Thai Nguyen. The factory's Chinese owner counts some of America's biggest retailers among its customers. The Hanoi airport on a recent visit was clogged with Chinese workers and managers coming to collect their visas. For Trump administration officials, that isn't exactly the desired outcome of a trade war. In trade talks, the U.S. has called on Southeast Asian nations to take a hard line on economic ties with China, including by stopping Chinese companies from setting up manufacturing and export operations in their countries. The goal is to reduce U.S. dependence on Chinese companies regardless of where they are located. But for the first half of this year, China—including Hong Kong—was responsible for more than 800 new investment projects in Vietnam, far more than any other country. Much of the investment was concentrated in manufacturing. Li is the founder of Letright Industrial, one of China's largest outdoor-furniture manufacturers with a customer list that includes Walmart and Lowe's. His factory in Thai Nguyen, near Hanoi, first opened in 2021 and today employs around 1,200 workers making lounge chairs, coffee tables and sofas. A set of six pieces can retail at American stores for around $700 to $2,000. Teams of U.S. buyers have visited recently to tour the factory and review their products. On the factory floor, laborers use laser-welding tools to construct sofa frames. Others hunch over waist-high tables, hand-weaving wicker chairs. With faux-natural materials popular in the U.S. this season, a team of workers uses brown spray paint to make metal chairs resemble wooden ones. Workers at the Vietnam facility have received training from their Chinese counterparts as production moves across the border. At the company's testing center, a machine slams a heavy weight into the seat of a finished chair more than 10,000 times, to prove its durability. Anticipating demand from U.S. clients, the company is building a second factory here a 10-minute drive away and is hiring hundreds more workers while trimming the workforce at its home base in Hangzhou, China. Teams of Chinese welders and weavers have been dispatched to train the Vietnamese. The company's ambitious goal: move 100% of U.S.-bound production to Vietnam this year, up from 30% last year. But getting work done in Vietnam is tougher than in China, and the first factory has yet to turn a profit. The intense heat and humidity of the region saps worker productivity, especially because furniture factories don't have high enough margins to use air conditioning in their high-ceilinged factories, says Li. 'The hot weather makes them very sleepy," said Li of his workers. He said they also don't have air conditioning at home, so they don't rest well during Vietnam's summers. The work culture in Vietnam is different from China. Chinese workers are known to show up at 7 a.m. in the hopes of getting started early and earning extra commissions. In Vietnam, workers tend to stick to standard hours. Employees at the Thai Nguyen complex have benefited from wage hikes as rival Chinese companies seek to ramp up hiring in the area. Luke Lu, who heads the company's North American sales, said the company's Vietnamese workers operate at a more deliberate pace when weaving wicker furniture. The company recently introduced extra pay for highly efficient workers, but Vietnamese workers remain about 30% less productive than Chinese workers, Lu said. In China, every raw material can be easily acquired. But in Vietnam, materials such as certain metal pipes used in chairs and fabrics for seat cushions need to be imported from China. When ports fill up, parts can be trucked over the Chinese border, five hours away. Trump has pledged a double tariff rate of 40% on foreign goods, including Chinese goods, transshipped through Vietnam, without specifying what counts as transshipment. Lu said some 70% of the materials that go into the company's Vietnam-made furniture are sourced locally, and it is working to find Vietnamese producers for the rest. Li said not all companies operating abroad should be considered transshippers. 'He has to separate the good people from the bad people," Li said of Trump. Overall Lu estimates that it is about 10% to 15% more expensive to produce outdoor furniture in Vietnam compared with China—which gives Vietnam the edge for U.S. exports, assuming Trump doesn't throw any more tariff curveballs. 'We already invested a lot here, and expanded production," said Lu. 'We just want things to be stable." Li said he was better off than some fellow Chinese manufacturers because he started planning the shift in Trump's first term. He recalled attending an Asia-Pacific leaders' summit in 2017 in Da Nang, Vietnam, where Trump took the stage and unleashed a fiery speech accusing China of cheating the U.S. on trade. 'Trust between the U.S. and China is getting less and less," Li said. Write to Jon Emont at
