Vietnam may still carry a stigma with many in the U.S. dating back to the ’60s and ’70s, but the geopolitical relationship has shifted dramatically even if the ruling political party has not.

And Vietnamese manufacturing coupled with U.S. natural gas could strengthen the bond further in the years to come.

Specifically, ongoing U.S. tensions with China and Russia offer Vietnam an opportunity to boost economic ties with the North American power. That’s if American investors can see past geopolitical smokescreens and invest funds for infrastructure, power and LNG projects. These would power Vietnamese manufacturing, which would, in turn, service the U.S. with its critical minerals needs and more.

Jack Belcher, principal with Washington, D.C,-based Cornerstone Government Affairs, argues that Vietnam’s manufacturing demand is, essentially, demand for energy.

“Vietnam wants to get off of Chinese coal, not just for greenhouse gas-emissions purposes, but because they want to get out from under the thumb of China. All of these things are big drivers for U.S. LNG and Vietnam,” said Belcher, a former staff director for the U.S. House of Representatives Subcommittee on Energy and Mineral Resources. “It’s being able to support the manufacturing sector that’s increasing and being able to meet growing demand.”

American investors have opportunities to fund projects for pipelines, ports and power plants, as well as for LPG, crude oil and LNG. There also is potential in wind projects.

One U.S. company arguably at the forefront of the push to attract American investments in Vietnam is Houston-based Energy Capital Vietnam (ECV), led by David Lewis. Lewis said the biggest headwind for American investors thinking about investing in Vietnam is perception.


Why Investors Should Keep an Eye on Vietnam

In that vein, Vietnam is at a geopolitical crossroads—considering its major trade routes lead to and from the U.S., China and Russia—and Vietnam aims to continue doing business with all of them in a delicate balance. For instance, Russia supplies military goods for Vietnam to protect itself from China. Therein lies the potential conundrum.

Likewise, while Vietnam sides with the U.S. on China, the controlling government in Hanoi is, of course, communist.

But today, Vietnam is the U.S.’ seventh-largest trading partner and, over the last decade, Vietnam’s gross domestic product (GDP) has grown around 109%, including 8% in 2022 alone to about $409 billion. Vietnam’s energy generation capacity is expected to rise roughly 60% by 2030, according to details on ECV’s website.

VNDirect Securities Corp., a Vietnamese financial institution, expects Vietnam’s economic activity to continue growing thanks to fiscal expansion policies, falling domestic interest rates, increased tourism and higher agricultural and manufacturing exports.

VNDirect projects total investment demand for power capacity in Vietnam could reach $98 billion from 2021 to 2030 in a base-case scenario, allocating 30% to gas-fired power and 35% to wind. Solar power also is expected to be a key beneficiary.

The potential is very real, but the geopolitics remain delicate and maybe messy. What happens in Taiwan or Ukraine could easily ripple into Vietnamese relations, despite a total lack of direct involvement. On that note, a glance at a portion of Vietnam’s defense and international partnership policy might serve as a good reference or starting point.

“According to the Vietnam Defense White Paper in 2019, Vietnam is pursuing a non-aligned policy known as ‘four no and one-depend’ which is no military alliances; no siding with one country against another; no foreign military bases or no using Vietnamese territory to oppose other countries; no using force or threatening to use force in international relations,” said the U.S.-based International Trade Administration (ITA) on its website.

“The ‘one-depend’ is presented as ‘depending on certain circumstances, the country will consider developing necessary defense and military relations with other countries at appropriate level,’ which leaves room for military manoeuvre,” according to ITA.

But none of that means there is not plenty of opportunity for U.S. energy investment.

“I think Vietnam is a great place for investment. I think it's a great place for U.S. industry,” Lewis said. “I think it's a great opportunity just for helping to improve security globally.”