Brotherly support: economic aid to Vietnam during the American war (1954-1975)

The history of the American War (1954–1975) 1 was the dominant research topic on the relationship between Vietnam and its allies, especially the Union of Soviet Socialist Republics (USSR) and the People's Republic of China (PRC), which were “elder brothers” of the socialist bloc. There is a substantial volume of studies on Cold War history examining relations between the Democratic Republic of Vietnam (DRV) and the USSR as well as the PRC in English, Chinese, Russian, and Vietnamese. Based on Chinese documents, Zhai Qiang argued that the Chinese aid to Vietnam was a result of Mao's theory to weaken the influence of the United States of America (US) and the USSR in Southeast Asia [Zhai Qiang, 2000]. The opening of Soviet archives led to an examination of Moscow's aid to Hanoi from the Soviet leaders' perspective. Russian historian I. V. Gaiduk used Soviet party archival documents to show that the USSR sought to strengthen its position in Southeast Asia by providing its allies in Hanoi with substantial aid while worrying about the breakdown of détente [Gaiduk, 1996; 2003]. M. Olsen also argued that Moscow provided the DRV government “with the necessary assistance to strengthen the democratic system” [Olsen, 2006]. Ang Cheng Guan, Nguyen Lien-Hang, and P. Asselin draw on Vietnamese archival materials to examine the internal and external affairs of Hanoi's leaders [Ang Cheng Guan, 1997; 2002; Nguyen Lien-Hang, 2012; Asselin, 2002; 2013; 2018]. Also, Nguyen Thi Mai Hoa and Pham Quang Minh are leading Vietnamese historians who put Vietnam in the triangle relationship between the USSR and PRC to consider the war in the context of a global confrontation [Nguyen Thi Mai Hoa, 2013; Pham Quang Minh, 2015]. There are excellent studies written on Soviet and Chinese military aid to Vietnam during the American War, however, it seems that the topic of economic support received less attention in these papers.

Drawing on materials from the Vietnamese National Archives, which contain important memoranda exchanged between the Prime Minister's office, the Vice Prime Minister, and the Foreign Trade Ministry, as well as reports and recommendations during negotiations and meetings between Vietnamese officials and leaders of other socialist countries, this paper examines economic aid from the socialist countries to the DRV during the entire period of the American War (1954–1975). From these analyses, this article shows that economic aid from the USSR and PRC was a strategic calculation that communist superpowers used to contend with the US during the Vietnam War.

Hanoi’s diplomatic strategy to attract more allies’ aid

The establishment of a diplomatic relationship between Vietnam and other socialist countries in 1950 opened the door to economic contacts 2. Soviet aid streamed into Vietnam after Ho Chi Minh made a formal request [Vietnamese Communist Party, 2001, p. 11]. From 1950 to 1954, Vietnam received 21.517 tonnes of commodities valuing approximately 54 million rubles from the USSR and PRC, mostly Soviet weapons [Nguyen Thi Mai Hoa, 2013, p. 72]. It is noticeable that before 1954, there was no official economic aid agreement between the USSR, PRC, and Vietnam.

Immediately after the Resistance War against French colonialism, Vietnam had to cope with many challenges, and risk massive starvation in North Vietnam [Ho Chi Minh, 2011, p. 273]. The Hanoi authorities had only ten years to recover and heal the wounds of the first Indochina War. At the end of 1964, US forces started to expand their air and naval raiding operations against North Vietnam.

During the three years of Operation Rolling Thunder (1965–1968), the US Air Force used aircrafts to hit targets in North Vietnam. It was estimated that about 30,000 tonnes of bombs were dropped on North Vietnam in 1965, and this number increased to 255,000 tonnes in 1966 before reaching a peak of 352,000 tonnes in 1967 3. During the period of 1965–1968, the US Air Force bombarded almost all towns in the North, of which 12 provincial towns and 52 townlets were utterly demolished. The Americans released more than one million tonnes of bombs on North Vietnam, i.e., double the amount of bombs they had used in the whole Pacific battle during the Second World War. Within those years, on average, each square kilometre of North Vietnam was forced to withstand 7 tonnes of bombs; around 50 kilograms per inhabitant. Significantly, just in two weeks at the end of 1972, during the Christmas bombing, the US Air Force dropped over 36,000 tonnes of bombs, surpassing the tonnage dropped during the entire period of 1969–1971, leading to the deaths of thousands of innocent inhabitants [Vietnam General Statistics Office, 2004, p. 243].

The US bombardments caused severe consequences for North Vietnam. Many factories, industrial bases, hospitals, and schools were destroyed. The economy of the North suffered heavy losses. The devastation of the US bombardment led to a massive demand for resources for the Vietnamese economy, along with necessary goods for its inhabitants. Therefore, Hanoi’s government depended much more on foreign aid to sustain its economy. For the DRV, the requirements for economic construction and development in the North as well as providing resources for the struggle in the South were set as pivotal goals for the Vietnamese Workers' Party (VWP). In order to cope with a potential enemy with greater economic and military strength, the DRV aimed to concentrate on domestic resources as well as call for economic aid to Vietnam from other socialist countries. This task was considered “an indispensable condition for the national construction and final victory for the unification of our country” [Vietnamese Communist Party, 2002a, p. 794]. The DRV mainly focused on strengthening “friendly solidarity with the USSR, PRC, and other socialist countries” 4 to gain more support for their national building in the North as well as the military forces in the South. In 1955, the first year after the North was peaceful, Ho Chi Minh directly led a state-level Vietnamese delegation to visit the USSR, PRC, and Mongolia to seek support from these countries. In April 1965, the first VWP Secretary Le Duan led a high-ranking delegation of the VWP to the

USSR. The visit achieved great results beyond the Vietnamese leaders' expectations. Many economic aid agreements during this period were signed⁵. In its official statements, the VWP always highlighted “ strengthening brotherhood with the Soviet Union, China, and other socialist countries ” [Vietnamese Communist Party, 2002a, p. 786]. The Vietnamese government's foreign policies focused on “contributing to strengthening the Soviet Socialist Party's socialist forces, strengthening unity, and consolidating of friendship. Had nothing shifted Vietnam and other socialist countries relationship” [Vietnamese Communist Party, 2002b, p. 103].

Quantities and composition of assistance

Economic assistance from socialist countries to the DRV during the period of 1954–1975 took two forms: grants and loans. The first type was free, and the Vietnam government did not have to return the money or equipment provided by socialist countries to Hanoi. The loans were long-term borrowings at low interest.

According to documents from Vietnamese archives, Vietnam received tremendous economic aid from socialist countries. According to data compiled from the Collection of the Vietnamese Prime Minister’s Office, from 1955 to 1973, these countries provided Vietnam with a total capital of 5,000 million rubles, of which 2,930 million were non-refundable aid and 2,070 million were long-term loans without interest. The amount of 1,430 million rubles in loans was forgiven in 1973. Therefore, the remaining debt was only 640 million rubles, including 227 million rubles and 300 million renminbi borrowed from the PRC during the first five-year plan (1961–1965). Among the 5,000 million rubles of economic aid, 1,500 million rubles was used to buy equipment and build nearly 900 factories and infrastructure for other economic sectors⁶. The remaining amount (3,500 million rubles) and capital from exporting local products (about 1,080 million rubles) were used to import raw materials, extras, vehicles, food, clothing, and other essential consumer goods.

Table 1

Communist economic assistance, 1955–1974 (in Mill. Rubles) 7

Countries	Total	Grants	Loans
	5749	4844	950
Soviet Union	1831	1365	466
China	2872	2577	295
Others	1091	902	189

In terms of the Soviet Union, across all years from 1955 to 1971, the USSR provided a non-refundable aid of 213 million rubles and a long-term loan of 1,000 million rubles to Vietnam. The amount of 1,213 million rubles was spent on importing equipment (445 million rubles for imported raw materials and food and 768 million rubles for other consumer goods) 8. The number of grants and loans from the USSR was divided into the following periods:

• •   From 1955–1960: 123 million rubles (90 million in grants and 33 million in long-term loans).

• •   From 1961–1965: 195 million rubles (6 million in grants and 189 million in long-term loans).

• •   From 1966–1969: 594 million rubles (114 million in grants and 480 million rubles in long

term loans).

• •    From 1970–1971: 301 million rubles (3 million in grants and 298 million in long-term loans)^.

The USSR mainly provided agricultural machinery, mineral fertilisers, lubricants, fuels, and other materials. Between 1965–1967, about 70 % of Soviet economic aid to Vietnam was for the development of industrial bases, of which 30 % was for the construction of power plants as well as for developing the energy industry. In June 1971, Vietnam suffered a terrible flood that engulfed more than 5,000 hectares of land. In an urgent situation, Prime Minister Pham Van Dong asked the Soviet government for help. Responding to Vietnam's request, the Soviet government sent Vietnam 30 tonnes of aid including milk, blankets, clothing, tents, medicine, and wheat 9. After that, in 1972, the USSR provided 239.5 million rubles to Vietnam 10 .

In terms of the PRC, across all years from 1955 to 1971, Chinese aid to North Vietnam was valued at 1,775 million rubles, of which the non-refundable aid amounted to 6,447 million renminbi and 10 million rubles, while 300 million renminbi and 227 million rubles were long-term loans without interest ¹¹ [Prime Minister’s Office, file 8964]. Compared with the total amount of economic aid from other countries to Vietnam (3,820 million rubles), the PRC accounted for 46% of the total (1,775 million rubles out of 3,820 million rubles), with 71 % being non-refundable aid (1,480 million rubles out of 2,080 million rubles). Only from 1955 to 1959 did the PRC provide the highest level of aid among communist countries, including 900 million yuan , of which 640 million yuan was economic aid. This amount of aid was “equal to the Vietnamese domestic revenue budget of the years 1955, 1956, and 1957” ¹². Chinese aid mainly helped Vietnam restore the railway system, repair roads, and build textile factories and a paper mill. Chinese equipment played a crucial role in building infrastructure, developing industry, transportation, and communication systems. Particularly in the industrial sector, imported Chinese equipment provided facilities to restore, expand, and build hundreds of new factories and firms in northern Vietnam.

The communist economic aid to Vietnam was quite large and helped Vietnam deal with the urgent needs of each period, especially during the bloody war. Vietnam used these grants and loans to meet the demands of restoring and building economic development, in addition to spending part of it to pay trade deficits and logistics costs. The aid played a crucial role in building infrastructure, developing industries, transportation, and communications systems. Particularly in the industrial sector, equipment aid was used to restore, expand, and build hundreds of new factories in the North. From 1955 to 1961, economic aid contributed to the construction of more than 30 projects in the North such as the Sao Vang Rubber Factory, the Rang Dong Light Source and Vacuum Flask Fac- tory, the Thai Nguyen Iron and Steel Factory, the Viet Tri Chemical Factory 13. According to Vietnamese Prime Minister Phạm Văn Đồng, these projects played an important role in building up the initial material and technical foundation of socialism in Vietnam [Vietnamese Ministry of Foreign Affairs, 1985].

Features of economic aid

Starting with the First Indochina War, both the USSR and PRC assisted Vietnam in gaining Vietnamese independence. Then, during the American War, both the USSR and PRC continued to aid Vietnam against the US and its allies. However, the assistance of the USSR and PRC during this period took place in a new context, unlike the period of the First Indochina War. The spirit and attitude of the socialist countries that supported Vietnam had different characteristics. The trend of the economic assistance of the communist bloc, in general, was continuous. However, economic aid to North Vietnam fluctuated over time and depended on the relationship between the superpowers. When the American War became a large-scale war and the first US combat troops arrived in South Vietnam in 1965, both the USSR and PRC increased economic aid to Vietnam to express its position in the strategic battle with the US in the East-West confrontation. Thus, in the period 1965– 1972, the level of intervention by the superpowers was pushed to the highest level. Therefore, the American War became increasingly fierce and imprinted on the East-West conflict, and the international character of the American War became more clearly visible. The US, Chinese and USSR’s involvement in the Vietnam War reflected the complex relationship between the superpowers and had a profound impact on the nature and progress of the war.

Grants only reached their peak in the period of the First US Destructive War (1965–1968 with about 2,640 million rubles) 14. Notably, the period in which Vietnam received the highest amount of economic aid was also the period in which US combat troops in Vietnam were at their highest level. The number of American forces in South Vietnam increased dramatically, from 184,300 soldiers in 1965 to 536,100 soldiers in 1968 15. In the period between 1965–1968, the level of communist economic aid was pushed to its highest level, and the massive US bombardment was the basis for the DRV to receive more aid than in other stages of the war.

During other periods, the communist countries reduced the level of grants and switched to longterm loans 16. By 1973–1975, socialist countries were oriented towards economic cooperation on the principle of mutual benefit and facilitated the repayment of loans.

Rifts within the communist bloc

The support and assistance from socialist countries for Vietnam during the American War (1954–1975) was great and undeniable. Both the PRC and USSR increased economic aid to Vietnam due to their concern about a rising security threat in Southeast Asia as well as their position in the strategic competition in the socialist bloc. However, because of the competition to win influence in the socialist bloc in general and Vietnam in particular, the USSR and PRC had policies and ac- tions that led to cracks within this solidary bloc. Although both countries were in the socialist camp and helped Vietnam against the US, there were profound contradictions.

The USSR's assistance to Vietnam during the first phase of the war was characterised as 'an observation'. The Soviet leaders paid less attention to the role of the Vietnamese revolution in their global strategy, and they were following a détente policy with the US. The Vietnam War was not inevitable between the socialist and capitalist camps, and both camps could peacefully coexist with each other [Ang Cheng Guan, 2002, p. 15]. Moscow strongly advised the Vietnamese to focus on the political struggle for reunification [Olsen, 2006, p. 69]. Even the Kremlin was willing to go so far as to agree on the formalisation of the existence of two separate entities in Vietnam, which was the implication of the discussion over the admission of South Vietnam to the United Nations [Gaiduk, 2003, p. 84]. When US forces strengthened their military presence in Southeast Asia in 1965, Moscow restarted its Asian policy, considering Vietnam an important channel for the USSR to penetrate Southeast Asia and prevent not only the PRC but also US from expanding their influence. The USSR moved from being an “observer” to providing direct assistance. When the relationship with the PRC fell into a “death spot”, the USSR always worried about the PRC's influence on Vietnam. The USSR criticised Vietnam for "the shadow of Beijing" over the Vietnam-Soviet relationship. In some talks with Vietnamese leaders, the USSR forced Hanoi to answer questions about Vietnam's agreements with the PRC and Chinese views on the American War. More or less, the USSR condemned Vietnam's unwillingness to share its war plan. Moscow believed that Hanoi deepened its viewpoints on the PRC and provided limited information to the USSR, just enough of their plans 17. The USSR even threatened to cut off its assistance to Vietnam [Pham Quang Minh, 2009]. Although there were inconsistent views with Vietnam, in general, the USSR mainly discussed and seldom imposed or gave conditions. Disagreements between the USSR and Vietnam were not aggravated and stopped within limits.

Beijing’s assistance was tied to what the US was doing in Southeast Asia. The view from Vietnamese archival materials shows Chinese shifts in support that coincided with Beijing’s strategic calculation in dealing with the US in the global conflict. Although Vietnam, the USSR, and PRC were all in the socialist camp with shared ideology, there were profound contradictions in their assistance to Hanoi. The PRC condemned the Soviets for not fully aiding Vietnam. In 1965, during a meeting with the Vietnamese Prime Minister Le Thanh Nghi, Chinese leaders even pointed out that the Soviets supported Indonesia, India, and Egypt much more than Vietnam 18. Up until the signal of the Sino-US rapprochement, suspicions and rifts between Hanoi and Beijing were becoming clearer. It was believed that the trips by H. Kissinger and R. Nixon to Beijing in 1971 and 1972 were evidence of Chinese attempts to use the Vietnam issue to improve Sino-US relations [Westad et al, 1998, p. 63]. After Kissinger's trip to the PRC for the second time in November 1971, Vietnamese Prime Minister Pham Van Đong suggested Mao Zedong cancel Nixon's visit to the PRC [Zhai Qiang, 2000, p. 198]. Of course, the offer was not accepted. Between 21 and 28 February 1972, President R. Nixon officially visited the PRC and held talks with Chinese leaders. When the PRC informed Vietnam that the Vietnam issue could be discussed during Nixon's visit, the Vietnamese leaders reacted angrily: “Vietnam is our country, comrades do not have the right to discuss with the US on the issue of Vietnam, comrades have acknowledged the mistakes of 1954, thus the comrades should not make mistakes again” [Zhai Qiang, 2000, p. 200]. On 4th March 1972, just a few days after President Nixon's visit to the PRC, Premier Zhou Enlai arrived in Hanoi to update the leaders of the VWP on the talks with the US President and explain that the PRC did not “sell” Vietnam cheaply [Connolly, 2005]. However, these efforts failed to regain Vietnam's trust in the PRC. Leaders in Hanoi believed that they were betrayed by the PRC. During the war, although that conflict was not enough to break out the relationship between the two countries, it also sowed the seeds of uncertainty in the later period.

Conclusion

This paper has shown USSR and Chinese economic aid to the DRV during the American War. It is necessary to affirm that the DRV always received economic aid from the socialist bloc during all periods. This fact proves that providing assistance to the Vietnamese people was a consistent foreign policy of these socialist countries. However, during each period, the level of Chinese and Soviet economic aid differed. During the first phase of the American War (1954–1965), communist economic aid focused on long-term loans aimed at reconstruction in the North. But when the war became a large-scale war and US combat troops arrived in South Vietnam in 1965, both the USSR and PRC increased economic grants to Vietnam to express their position in the strategic battle with the US in the East-West confrontation. While the US and its allies intensified the war in the South and escalated the bombardment in the North, the Vietnamese people continuously received massive economic aid from the USSR and PRC. The assistance from socialist countries during this period not only solved financial difficulties for the Vietnamese government and met the daily demands of its people but also supported Vietnam in building many factories, industrial bases, schools, and hospitals. Along with military assistance, the technical and economic aid of communist countries contributed to the Vietnamese victory during the resistance war against the US. This contribution to the Vietnamese final victory in the war was undeniable. However, the assistance to Vietnam also pointed out the cracks between these countries. Although they were in the socialist camp with shared ideology, there were profound internal rifts, which were indicators of a future broken relationship.

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