Vietnam Betrays Xi, Backs USA: A Shift in Southeast Asian Geopolitics

On April 2025, Vietnam delivered a stunning blow to Chinese President Xi Jinping, aligning itself with the United States amid escalating tensions in the South China Sea (SCS) and beyond. Xi’s diplomatic mission to Southeast Asia, intended to rally allies against U.S. trade pressures, backfired spectacularly as Vietnam not only rejected China’s overtures but actively courted American investment. This strategic pivot, detailed in a recent YouTube analysis titled "Trump Tightens the Net, Xi Faces Ouster as Failures Mount — CCP Splits: Wang Yi vs. Li Qiang"

underscores the mounting challenges Xi faces both at home and abroad, as internal divisions within the Chinese Communist Party (CCP) and global resistance to China’s tactics threaten to undermine his leadership.

Xi’s Southeast Asian Gamble Falls Flat

Xi Jinping embarked on a high-stakes diplomatic tour of Southeast Asia in early 2025, starting with Vietnam, then moving to Malaysia and Cambodia. His goal was clear: create a trade buffer zone to cushion the impact of U.S. tariffs, which President Trump had recently hiked to 145% on Chinese goods. Xi hoped nations like Vietnam would help reroute Chinese exports to the U.S., bypassing the tariffs through transshipment. But Vietnam had other plans. During Xi’s visit, Vietnamese leaders, including General Secretary To Lam and Prime Minister Pham Minh Chinh, rebuffed China’s proposals. Instead, Vietnam’s Deputy Prime Minister Bui Thanh Son led a task force to negotiate directly with the U.S., offering to slash bilateral tariffs to zero and inviting American investment, a move that stunned Beijing.

Vietnam’s actions weren’t just a rejection—they were a strategic play to exploit China’s vulnerabilities. As the YouTube analysis notes, Vietnamese commentator Zhao Shawi observed that Hanoi saw China’s weakening position and seized the opportunity to secure trade advantages while taking a tougher stance on SCS disputes. Deputy PM Bui publicly urged China to “empathize” and resolve maritime conflicts, a clear signal of Hanoi’s unwillingness to bow to Beijing’s pressure. An emergency ASEAN meeting in April 2025 further highlighted the region’s mood, with foreign ministers issuing a joint statement favoring cooperation over trade wars, a subtle rebuke of China’s tactics.

A Unified Resistance in Southeast Asia

Vietnam’s pivot aligns with a broader trend of resistance to China’s expansion in Southeast Asia, as detailed in another recent analysis, "Why China Will Never Win The South China Sea | Explained"

The video argues that China’s aggressive territorial claims and military outposts in the SCS are logistically unsustainable, with bases over 1,000 kilometers from the mainland, making them vulnerable in a conflict]. Vietnam, alongside nations like the Philippines and Japan, has capitalized on this weakness, strengthening ties with the U.S. to counterbalance China’s influence. For instance, Vietnam’s 2024 defense pact with Japan, which includes radar data sharing on the Paracel Islands, reflects this growing coalition, a “unified resistance” that the video predicts will deter China’s ambitions.

CCP’s Internal Strife: A House Divided

Xi’s diplomatic setbacks come at a time of growing unrest within the CCP. The YouTube video highlights a deepening rift between senior diplomat Wang Yi and Premier Li Qiang, reflecting a broader power struggle over how to handle the U.S.-China trade war. Wang Yi’s “wolf warrior” faction, known for its aggressive anti-American stance, has gained the upper hand, pushing hardline policies and propaganda that favor confrontation over negotiation. Li Qiang’s camp, which advocates for dialogue, has lost influence, signaling a shift toward escalation under Xi’s leadership.

Signs of Xi’s weakening grip on power are also emerging. On April 3, 2025, a front-page article in the People’s Daily from the State Council omitted references to Xi’s “core status,” a traditional affirmation of his authority. Reports on recent CCP meetings, including a CPPCC symposium on the Yangtze River Protection, also excluded the phrase “two establishes,” further hinting at a process of “de-Xi-ification”—or vulnerability—within the party, as noted by Chinese-Japanese writer Sherping in a recent article. These omissions, unprecedented in recent years, suggest Xi’s authority is under strain as he grapples with both internal dissent and external failures.

China’s Economic Retaliation Backfires

China’s response to U.S. tariffs has been aggressive but self-defeating. In retaliation for Trump’s policies, Beijing froze deliveries of Boeing aircraft to Chinese airlines and banned purchases of U.S.-made parts, grounding 10 Boeing 737s in China. While this move aimed to hurt American industry, it has crippled China’s own aviation sector, which relies heavily on Boeing planes for parts and maintenance. Even China’s C919 jet project depends on U.S. technology, making the retaliation a “self-inflicted wound,” as the Wall Street Journal described it. The YouTube video points out that this strategy risks burning bridges while China still needs American spare parts, portraying Xi’s tactics as chaotic and counterproductive.

The economic fallout is already evident. Major banks like UBS, Goldman Sachs, and Citi have slashed China’s 2025 GDP growth forecasts to as low as 3.4%, reflecting the severe impact of the trade war. Chinese ports are seeing sharp drops in cargo volume, with exports to the U.S. in freefall, according to the Wall Street Journal. Meanwhile, China’s shadow banking sector is in crisis, with Zhongrong Trust facing bankruptcy and liquidation, impacting over 30,000 investors and casting doubt on the $3.7 trillion trust industry’s future.

Tightening the Net at Home: The Cloud Cage

Amid these external setbacks, Xi is doubling down on domestic control. The CCP has rolled out the “cloud cage,” a massive surveillance network that uses AI and big data to monitor citizens 24/7. Building on systems like Skynet and Sharp Eyes, the cloud cage integrates facial recognition, shopping records, travel routes, and social media posts into China’s social credit system. One wrong move—say, a critical comment online—and citizens can be blacklisted, unable to book flights, rent apartments, or access loans. The YouTube video notes that China spends more on domestic surveillance than on its military, suggesting the CCP views its own people as the real threat [Web ID: 28]. This “digital Leninism” not only stifles dissent but is also being exported to authoritarian regimes in Africa and Latin America, spreading China’s model of control globally.

A Global Struggle for Influence

The U.S.-China trade war has evolved into a broader contest for global dominance, as the YouTube video emphasizes. Trump has framed the CCP as a “systemic threat,” targeting its economic practices like intellectual property theft and currency manipulation, which have fueled China’s military expansion. White House Deputy Chief of Staff Steven Miller declared, “The days of China pillaging America are over,” reflecting a U.S. strategy to decouple from China through tariffs, investment scrutiny, and a revived China Initiative to combat espionage. On the military front, Defense Secretary Pete Hegseth told NATO allies in April 2025 that deterring CCP aggression in the Pacific is the Pentagon’s top priority, backed by a proposed $1 trillion defense budget.

Vietnam’s alignment with the U.S. fits into this larger struggle. By promising to crack down on transshipment fraud and aligning with Trump’s policies, Vietnam has not only pressured China but also raised its own geopolitical value, hitting “three targets” as the video describes: pressuring China, pleasing the U.S., and boosting its strategic importance. This move echoes the unified resistance seen across the region, where nations like Japan and the Philippines are also deepening ties with the U.S. to counter China’s influence.

Conclusion: Vietnam’s Pivot Reshapes the Region

Vietnam’s decision to back the U.S. over China marks a turning point in Southeast Asian geopolitics, exposing the cracks in Xi Jinping’s leadership. As Xi grapples with internal divisions, economic missteps, and a tightening surveillance state at home, his failure to rally allies abroad has left China increasingly isolated. Vietnam’s strategic betrayal—choosing American investment over Chinese transshipment—highlights the growing resistance to China’s dominance, a trend that could reshape the balance of power in the Indo-Pacific. For Xi, the message is clear: the net is tightening, and his vision of regional control is slipping away, one ally at a time.