Vietnam wants to join the BRICS! Why not look for the United States? Is the economic crash looking for a lifeline?

Recently, Vietnamese officials have made clear their desire to join the BRICS, which has been interpreted as an urgent search for economic recovery. President Biden even visited the country himself last year, could not that be one of his solutions to the problem? Participating in the BRICS will undoubtedly form a significant divergence from the United States, the boss it previously relied on. It is worth noting that against this background, Vietnam's behavior is anomalous, they no longer try to rely on hegemony for their own interests, so what is the reason for this shift?

At a regular press conference, Vietnamese Foreign Minister Pham Thu Thanh clearly stated Vietnam's ardent desire to become a member of the BRICS organization. This statement marks the first time that the Vietnamese government has publicly expressed such a will. Back in April this year, China Global Network reported that the Vietnamese Embassy in Russia had revealed to the media that Vietnam was cautiously exploring the feasibility of joining the BRICS and exploring ways of cooperation.

It is worth noting, however, that Vietnam's position has changed significantly over the past month. The pace of change from the previous relative ambiguity to the current clear and positive stance is remarkable. This begs the question, does Vietnam think that it can easily join the ranks of BRICS countries based on statements and commitments alone?

In fact, more than a dozen countries are currently lining up for the opportunity to join the BRICS. Vietnam is not the only country in Southeast Asia that is willing to do so, and Indonesia has taken a more active stance on this issue.

To put it bluntly, Vietnam's request to join the BRICS at this time seems to be a bit lagging behind, even a little surprising. The reason why we feel this way is that during the visit of the mainland's high-level leaders to Vietnam in December last year, the Vietnamese side did not mention this matter, nor did it express any relevant intentions. This performance shows that Vietnam's enthusiasm for joining the BRICS is not as high as expected.

According to public information, during his trip to Vietnam in early September last year, US President Joe Biden not only established deep diplomatic relations with Vietnam, but also pushed the relationship to a new height through a series of commitments and preferential measures. However, despite Vietnam's efforts to maintain close ties with the United States, the U.S. policy of friendly shore outsourcing over the past few years, which explicitly targets Vietnam and India, has complicated and delicate its stance on seeking U.S. cooperation and assistance.

As the U.S. prepares for the presidential election, political strife and uncertainty make it difficult to distract from other issues, and the U.S. is unable to make clear commitments to Vietnam's expectations and needs. Against this backdrop, it is interesting why Vietnam is eager to seek membership in the BRICS organization.

Behind this decision, it not only reflects Vietnam's strategic position in the Association of Southeast Asian Nations, but also highlights the complexity and volatility of the current international situation. More importantly, Vietnam is facing a severe financial and economic crisis, and its domestic economic situation is on the verge of collapse. In order to tide over this difficult situation, Vietnam is in dire need of external assistance and support, so it has set its sights on the BRICS organization, hoping to find a way to solve its economic difficulties with the help of this international platform.

Vietnam's anxiety is not unfounded, and one of the root causes of Vietnam's economic woes is the impact of U.S. policies. In the face of such severe economic challenges, Vietnam has to speed up its pace and seek more opportunities for cooperation and development space to cope with the current crisis.

Recently, the situation in Vietnam has become more serious than ever, mainly due to the intertwined effects of the two types of events. First of all, an extremely urgent and influential issue is that the current US dollar has shown extremely strong purchasing power in financial markets, resulting in the continuous severe depreciation of currency values in many parts of the world, including Asia, especially the Vietnamese dong. The pressure on the Vietnamese dong in this market volatility can be imagined.

As investors chose to sell such assets to preserve their value or reduce risk, the exchange rate of the Vietnamese dong fell sharply, and according to the latest statistics, the value of the country's currency fell to a historic low of 25,455 on May 10. It is worth noting that from the beginning of this year to the present, the exchange rate of the Vietnamese dong against the US dollar has experienced a significant depreciation, with a cumulative depreciation of about 5%. This depreciation is second only to the Japanese yen and the Thai baht in the Asian region, making Vietnam the third most depreciated currency in the region.

A closer look at this phenomenon shows that Vietnam's dollar harvesting dilemma may be more severe than Japan's. This judgment is not groundless, and its root cause lies in the huge hidden danger that the United States has already buried a large amount of dollar debt in Vietnam. The existence of this debt makes Vietnam more vulnerable to US dollar fluctuations and the value of its currency is more vulnerable to shocks, and Vietnam's current economic situation is indeed worrying.

The reasons why Vietnam is saddled with a large dollar debt are deep strategic and economic considerations. Years ago, the U.S. actively pushed Vietnam to join the strategic layout of de-sinicization and onshore outsourcing, aiming to shape Vietnam as a new global manufacturing leader, a potential replacement for China. To achieve this goal, the United States provided substantial financial assistance, while Vietnam contributed to rapid economic growth with its abundant labor resources and large-scale construction of export-oriented enterprises.

Behind this rapid growth, however, is Vietnam's high accumulation of US dollar debt. Vietnam's total external debt now exceeds US$2,000 billion, or 70% of its GDP, which is more than twice as much as its foreign exchange reserves. This means that even if the US dollar interest rate remains unchanged, it will be difficult for Vietnam to repay such a large debt with its existing foreign exchange reserves alone.

The risks of dollar debt are now well understood. When U.S. interest rates fluctuate, U.S. dollar bonds are like a financial nuclear bomb that often bears the brunt of the impact. In the event of a default on dollar bonds, the United States could use this opportunity to increase the pressure and push Vietnam's economy to the brink of collapse, leaving Vietnam unable to repay its debts and passively accepting loans from the United States, which are often accompanied by onerous asset-backed conditions, putting Vietnam in a more passive position.

Although Vietnam has realized the seriousness of the problem and began trying to repair relations with China last year, it has unfortunately been late. Vietnam must seriously face the current debt dilemma and seek effective solutions to ensure economic stability and development.