On March 5, the Nimitz-class aircraft carrier USS Carl Vinson (CVN-70) made a port call in Da Nang, Vietnam. Sailors from the Carl Vinson engaged in training alongside personnel from the Vietnamese Navy, as well as onshore cultural activities. That’s perfectly normal. What wasn’t normal was the prestige of the visitor and the destination—though US Navy ships have made port calls to Vietnam since relations were normalized in 2004, the Vinson’s visit marked the first time an American aircraft carrier has docked in Vietnam since the end of the war more than 40 years ago.
“We continue building on the robust partnership that we actually already have,” said Vice Admiral Phillip Sawyer, commander of the US 7th Fleet based in Yokosuka, Japan. “When we talk about what’s in the future, recognize that we have done quite a bit already: we have a continuing engagement with the people here, it’s called Pacific Partnership, that we’ll do again this year. So I look forward to talking with my Vietnamese counterparts to discuss what else we can do going into the future.”
The aircraft carrier’s port call has been planned since President Trump’s state visit to Vietnam last November, but why? One word: trade. Although Trump pulled the United States out of the controversial Trans-Pacific Partnership—but said last week he would reconsider if the U.S. got a “substantially better” deal—he has, by and large, continued the extensive Pacific engagement of previous administrations. That engagement includes strong diplomatic efforts on behalf of American businesses as well as a stepped-up military presence to reassure allies about North Korean missiles and Chinese encroachment on the South China Sea.
Asia-North America trade flows are shifting. The China of the 21st century is no longer the China of the 1980s, when the country’s newly minted membership in the World Trade Organization suddenly opened its dirt-cheap labor force to international capital. Chinese labor costs have risen and firms are looking further abroad to emerging markets for better margins—according to research by the McKinsey Global Institute, the average daily wage for a Vietnamese manufacturing worker is $10.60, while in China that number is now $34.40.
The Economist reported last week that China’s share of global and Asian exports is falling: this process began in 2016, when China’s share of global exports slipped from 13.9% to 13.5%. In 2017, it dropped below 13%. China’s share of Asian exports dropped 2.6% in the same period. The reasons for this are complex: China’s shrinking workforce and shift to a service economy play a role, as do its wealthier competitors like Taiwan, South Korea and Japan, who were better positioned to exploit productivity gains from automation and robotics.