At stake is the selection of a new leadership, who will then determine how to navigate the tricky juncture of whether to further modernise the single-party state, or to dig their heels in and uphold the party’s supremacy. Past leaders have been stuck between the opposing currents in the past decades. But expectations have been high that Vietnam’s new helmsmen will be forced to carry out reforms for the party’s survival, while steering the country closer to the West and further away from China, once a close ideological ally but now an increasingly assertive neighbour.

Analysts said these reforms would be difficult and almost impossible without a strong leader. As the delegates cast their votes later this month, many are watching if the liberal-leaning Prime Minster Nguyen Tan Dung, who the analysts said fit the bill, can win the conservatives’ trust and take up the baton as the party chief.

“This is probably the most consequential party congress in two decades,” said David Brown, a retired American diplomat who was posted in the country and lived there for a decade.

At the five-yearly party congress, slated to convene on 20 January, more than 1,000 delegates from around the nation will meet in the capital city of Hanoi to discuss policies deemed important for the country.

“There will be a lot of reports, which will be listened to and applauded,” Brown said, “It’s very unlikely there will be much that’s not already scripted.”

But there is one exception: the competition for the next leadership is likely to remain intense until the last possible minute.

In late December 22 December, a party plenum was held to discuss the leadership issue. Originally planned to be four days, the plenum stretched into eight days. And at the end the party decided to postpone the congress by about two weeks.

Holding things up was a lack of consensus on who should be the next party chief, according to diplomatic sources and analysts.

The dispute on leadership selection has marred previous transitions and underscored the political dilemma facing Vietnam for at least a decade, said Alexander Vuving, an associate professor at the Asia-Pacific Centre for Security Studies in Honolulu.

“It the party is stuck between two currents,” Vuving said.

One of the currents was pushing the country to modernise its economy in order to boost the party’s legitimacy, Vuving said. But to do so, the country would have to forge closer ties with the West and risk its ideological basis being undermined.

On the other hand, there was a strong force of resistance against opening up in order to maintain party’s power monopoly, he said.

“With two opposite currents like these, you can’t decide who the leader is,” Vuving said.

“The only leader who can fit into both will be a very weak leader, with weak personality and is unable to make decisive answers.”

But many believe the country can no longer afford to shy away from bolder reforms as it celebrates the 30th anniversary of economic reforms, also known as Doi Moi, this year.

The economic liberalisation has propelled Vietnam from one of the poorest countries in the world to the lower middle income status. Its per capita income jumped from around USD100 in 1986 to over USD2000 by the end of 2014, according to the World Bank. Vietnam remains one of the fastest growing economies in the region, with a GDP growth rate at 6.68 per cent last year, while China’s economy is expected to slow down to 6.9 per cent in the same period from 7.3 per cent in 2014.

But critics said the country’s economy had become increasingly difficult to manage due to problems at home and abroad. And the leadership reshuffle would provide a window of opportunity to tackle these issues.

The country’s economic model, inspired by its larger neighbour China, has given birth to problems such as an over-reliance on exports and foreign investment, a dominance of the often ineffective state-owned sector over the private one, and rent seeking at the expense of further reforms, said Le Hong Hiep, a visiting fellow at the Institute of Southeast Asian Studies in Singapore.

The slowing global economy has exacerbated the problems. To further complicate the issue, escalating tensions over the South China Sea disputes has set Vietnam on a difficult mission to lessen its economic reliance on China.

Hiep said Vietnam would need further institutional reforms to clamp down on corruption and to enhance the government’s accountability and efficiency. Dealing with a more aggressive China would also require a more dynamic foreign policy, he added.

“All these will largely be impossible if the party can’t elect a strong, unified and efficient leadership,” Hiep said.

One candidate that cuts such a profile is the current Prime Minister, who many described as a powerful, pragmatic, reformist and English-speaking politician.

In the run up to the party congress, Dung has been widely seen as a front runner to be the next party general secretary.

Hiep argued in an essay for the Eurasia Review in May that despite turning 67 this year, two years older than the party’s mandatory retirement age, Dung would likely take the top job thanks to his vast influence in the party’s Central Committee, which elects the politburo and the general secretary.

In 2012, the Central Committee reversed a Politburo decision to discipline Dung for hits mismanagement of the economy. The next year, it elected two close allies of Dung to be additional Politburo members, vetoing the other two candidate endorsed by the current Party chief Nguyen Phu Trong, a figurehead in the party’s conservative wing. Last January, Dung topped a vote of confidence on 20 top party officials by the Central Committee. And many believe that if elected, Dung would be able to place his close allies in key party and government positions, affording him a unified team to work with – something that the current leadership does not have.

The anticipated rise of Dung, Brown argued, could be a timely challenge for the party. After years of reluctance to embrace changes, the party may soon have a strong enough leader and to shake up the system.

“In the last three party congresses, all they have done is to redistribute the senior positions…they assure everybody got a piece for factional balance,” said Brown, “Now we have a situation, somebody named Dung is challenging the system.”

While competition for the top positions remain intense, Dung could still lose out because of his pro-reform approach.

“The challenge for him is that a segment of the Party’s leadership sees his rise to the General Secretary position as risky, fearing that his liberal leaning position may ultimately turn him into a Vietnamese ‘Gorbachev’,” Hiep said.

Even if the current party chief, Trong, is succeeded by a conservative, analysts said the party would still be under pressure to pursue reforms, although at a much slower pace and with less substance.

“If substantive reforms are not adopted, Vietnam will have to struggle at least another five years, especially in economic terms, and the longer the problems persist, the harder it may become for them to be addressed,” Hiep said.

But one trend that analysts said was already in motion, and would be irreversible disregard of who becomes the next party chief, is the country’s shift in foreign policy.

For decades, China has been an important political and economic partner that the two parties have boasted close brotherly ties. Even when the latest round of tensions on the South China Sea territorial disputes started to brew around 2008, the Vietnamese authorities were still careful in managing its relationship with Beijing despite growing anti-China sentiment in the country.

But things took a dramatic turn when China parked a giant drilling platform, HY981, in disputed waters within Vietnam’s exclusive economic zone in May 2014. The country’s diplomatic dictum, the “three nos” policy – not allowing foreign countries to set up military basis, no military alliances, and no ganging up on a third country using another country – came under review during an emergency meeting of the Central Committee in May, 2014, according to Carl Thayer, a Vietnam expert and Emeritus Professor at the University of New South Wales.

Although the two countries quickly patched things up after a few months of diplomatic spats and violent protests, many analysts said mutual trust had been lost. Vietnam has since then sought to build closer ties with Western powers, in particular the United States and Japan, in an effort to hedge its bets against China.

“Vietnam’s relationship with China past the point of no return with the oil rig crisis,” said Vuving.

“After the oil rig crisis, Vietnam moved to a position…of basically keeping equal distance between US and China.”

A Vietnamese diplomat said one issue to be discussed at the party congress would be how to lessen economic dependence on China. Many have seen Hanoi’s participation of the US-led Transpacific Partnership trade pack a move in such direction.

But with China remaining as the key market and raw material supplier to Vietnamese products, Thayer said Hanoi would tread very carefully in its balancing act.

“Each country other regional powers feels they have equity in Vietnam, and if it Vietnam doesn’t look after its interests it could lose out and be disadvantaged,” Thayer said.

Vietnam’s diplomatic balance, Vuving said, would shift slowly but surely to veer “closer, but not too close to the US, a bit further, but not too far, from China”.

“It’s going to be a pivot to the west, but in salami slicing style,” said Vuving, coining a term that has been widely used to describe China’s aggressive approach in the South China Sea.

By Kristine Kwok - The South China Morning Post - January 12, 2016