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FAQs About The Special Economic Zones and Vietnam’s SEZ Draft Bill

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The locations of the three proposed SEZ. Photo courtesy: https://www.luatkhoa.org/dac-khu/

In June 2018, many were shocked to witness the largest demonstration in Vietnam since the end of the war in 1975, where thousands of people marched on the streets of several major cities. One of the reasons that compelled the Vietnamese people to protest was because of the proposed Special Economic Zones Law, which their National Assembly’s members were going to pass.

Despite the fact that under public pressure, the draft bill was ultimately announced to be halted until the next National Assembly’s meeting in October 2018, people still protested against it. Their reason? They feared that they were going to lose essential portions of their country to foreign investors, namely, the Chinese. The government of Vietnam, on the contrary, continued to insist on the passing of this law, citing economic development and jobs opportunities for hundreds of thousands.

Which side is right?

1. What Is A Special Economic Zone?

A Special Economic Zone (SEZ) is defined as an area in which business and trade laws are different from the rest of the country.

Theoretically, an SEZ can attract foreign investment, expand production, create jobs, and boost export-import. However, that would only happen if a set of conditions is met: the rule of law, together with clearly defined laws and regulations that both facilitate production and business activities, which are binding on all investors and able to adjust market failures, as well as other public issues.

In practice, and in the particular case of Vietnam, the government has yet to make available any information regarding the conditions under which the proposed SEZs will operate.

Can the SEZs create real jobs for the Vietnamese people? Can they boost production and trade? If they fail, and the nation falling into debts, who would be held accountable, and how? What are the punishments against them? Alternatively, will they say, “It’s none of your concern; it’s the Party and the State’s business”?

The above questions remain unanswered.

2. What Is The SEZ Project?

The SEZ project is a “grand policy” of the Politburo of the Vietnamese Communist Party (VCP), to establish three special economic zones in Van Don (a district in the Northeastern Province, Quang Ninh), Bac Van Phong (of Khanh Hoa Province), and Phu Quoc (of Kien Giang Province) as shown in the picture above. Foreign investors shall be granted special favors in these areas, for example, the 99-year land lease.

This project is codified in the proposed SEZ Law or the “Law on the Special Administrative-Economic Units”. Traditionally, and as in this time, the government of Vietnam does not publicize the names of the lawmakers concerned in any lawmaking process, so no one knows the architects behind the SEZ Law.

In case this SEZ Law is found to have contained some defects, or its enforcement would lead to severe consequences, no one, especially Party’s officials, shall be held responsible due to the lack of transparency and accountability in the country.

3. What Is “Special” About These Three Zones?

Overall, conditions in Van Don, Bac Van Phong, and Phu Quoc are not favorable for development. These include infrastructure, skills of the labor force, science and technologies, and financial-economic facilities.

Regarding geographic location, however, all the three districts are located in critically strategic sites of Vietnam, and they hold a crucial implication for national security. To make matters worse, Vietnam’s northern giant neighbor, China, where most of the potential investors would come from, has for centuries been known to keep an ambitious dream of becoming a hegemonic superpower.

China pays particular attention to Van Don and to Vietnam in general, whom she considers being the “buffer zone” for her to “move southward” to the geo-strategic South China Sea. For this reason, even when the SEZ law does not mention China but only refers to “foreign countries,” obviously China is the only nation the Vietnamese people are concerned about.

4. What Are The Goals Of The SEZ Project?

The SEZ project revolves around these promises: the three SEZs shall be where new institutions are tested and adopted with more freedom and less control, where innovation is stimulated, where more jobs are created, and more incomes are generated for local people. In short, the SEZs shall boost production and commerce, and lead to economic growth.

However, all of those promises remain vague and unfounded. Van Don, Bac Van Phong, and Phu Quo as stated, do not have favorable conditions to establish SEZs, because of poor infrastructure and technological bases and an unskilled labor market.

Most importantly, no political leader, no official of the VCP and the State shall bear any responsibility if those promises become unfulfilled. If the project fails, or if it causes any adverse consequences for the people and Vietnam, the victims would have no meaningful recourse.

5. What Are the Potential Consequences Of The SEZs That Vietnamese People Fear?

5.1. Territorial concession

By stipulating a land lease of up to 99 years and granting other special privileges to potential Chinese investors, the SEZ Law is paving the way for China to infiltrate Vietnam under her “salami-slicing” strategy.

Salami slicing is a strategy that the communist Chinese government has used since 1949 to take over territories in the South China Sea and the Himalayan region, in a gradual, step-by-step manner. The tactics were to open the door for Chinese immigrants to settle, do business, set up Chinese language schools, establish their own administrative system, and promote Chinese culture and customs in foreign lands. By doing that, they have legitimized China’s presence and power in the area and gradually built up Chinese autonomy inside Vietnam. If and when the time comes, this group with absolute autonomy could “rise” to demand sovereignty or for the Chinese-controlled area to “exit Vietnam and come back to merge into the motherland of China.”

5.2. A dumping ground for China’s waste

The SEZs may face the risk of failing to absorb advanced technologies and management skills, but that’s not it, after all. They are likely to become a market for low-quality products made in China and a dumping ground for her waste, most seriously toxic and e-waste.

5.3. The conflict between local people and Chinese immigrants

Overpopulation in China has led to high rates of unemployment and illegal immigration into neighboring countries, especially in Vietnam, where the government with its lousy governance fails to take control of the issue. As a result, bitter conflicts have arisen between local people and Chinese immigrants, which remain unresolved. In recent years, incidents of violent clashes have occurred between Chinese immigrants and the local Vietnamese community in Hai Phong, Quang Ninh, Thanh Hoa, Ha Tinh, as well as other provinces in Vietnam.

For example, in Quang Ninh in the mid-2000s, Chinese immigrants had thrown stones at Vietnamese people. In Thanh Hoa and Ha Tinh, drunken Chinese workers even falsely imprisoned a few local people after collectively assaulted them.

5.4. Economic loss

Accordingly, once the SEZ Law is passed, $70 billion USD shall be invested in the three SEZs, and that is like gambling ours and our children’s future on an uncertain race. Besides, with special favors granted to investors (mostly foreign) who could hardly be controlled, the government would definitely take the risk of substantial tax losses and budget deficits.

Many precedents can be found for this decision like this. One among them is the bauxite mining project in Tay Nguyen (Vietnam’s Central Highlands), which is also another grand policy of the VCP and the State. It was implemented despite public demonstration, notably the fierce protest from the late military general, Vo Nguyen Giap, and 4,000 Vietnamese intellectuals, domestic and overseas. The grand project lost almost US$170 million between 2013 and 2016. No one among those who made the promises for economic development and job opportunities for the locals were to take any responsibility for this loss.

With the government’s current institutions and management capacity, the SEZ project cannot and will not ensure economic success. The issue confronting the state is that if it fails like the Tay Nguyen bauxite mining project, no political leader shall bear any responsibility. Worse, if the SEZ project leads to territorial concessions, then it does not matter which leader or official of the VCP and the State takes responsibility, Vietnamese citizens would still suffer the irreversible consequences.

6. Why Does the VCP Insist On Implementing The Project?

The answer lies in the entrenchment of crony capitalism, with interest groups collaborating closely with the corrupt central and provincial governments, seeking to gain in grand projects in the name of “development.”

Also, “the obvious answer is ‘casinos and red-light districts,’ as these SEZs are the only places in Vietnam where these people can do business freely…. another reason that many people are aware of but still reluctant to spell out (for ‘political sensitivity’) is ‘the China factor.’ Otherwise, there is nothing else there” (Nguyen Quang Dy, 2018).

7. Is There Any Alternative Solution To The SEZ Project?

Experts point out that the SEZ idea was something that belongs to the last century, that it has become out of date, and that the SEZs are not relevant to the current circumstances of Vietnam. Instead, the urgent thing to do now is to launch a fundamental and comprehensive institutional reform in the nation, focusing on:

– setting the private sector as the basic economic sector, contracting the state sector to its minimum;
– recognizing and protecting private ownership of land;
– establishing democracy, and protecting and promoting freedom rights to mobilize the citizenry for the development cause of the nation.

Human Rights

Legal Briefing On Democracy Activist Pham Thi Doan Trang’s Arrest

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Photo Courtesy: Pham Doan Trang Facebook.
Photo Courtesy: Pham Doan Trang Facebook.

Pham Thi Doan Trang, a leading democracy activist and a prominent Vietnamese journalist, was arrested on October 6, 2020 in Ho Chi Minh City by Vietnamese police.

Here is a legal briefing updated on the morning of October 9, Vietnam time.

What allegations has the Vietnamese government made against Pham Thi Doan Trang?

Doan Trang is charged with “conducting propaganda against the Socialist Republic of Vietnam” under Article 88 of the 1999 Penal Code, and “making, storing, spreading information, materials, items for the purpose of opposing the State of the Socialist Republic of Vietnam” under Article 117 of the 2015 Penal Code (revised in 2017).

This is a bit complicated. Why are they charging her with two crimes under two separate penal codes? Here is the context:

The 1999 Penal Code (revised in 2009) was replaced by the 2015 Penal Code. The 2015 Penal Code went into effect on January 1, 2018 after being revised in 2017.

The two crimes that Doan Trang is charged with are almost the same. Here is the text:

Article 88. Conducting propaganda against the Socialist Republic of Vietnam

1. Those who commit one of the following acts against the Socialist Republic of Vietnam shall be sentenced to between three and 12 years of imprisonment:

a) Propagating against, distorting and/or defaming the people’s administration;
b) Propagating psychological warfare and spreading fabricated news in order to foment confusion among the people;
c) Making, storing and/or circulating documents and/or cultural products with content against the Socialist Republic of Vietnam.

2. In the case of committing less serious crimes, the offenders shall be sentenced to between 10 and 20 years of imprisonment. 

Article 117. Making, storing, spreading information, materials, items for the purpose of opposing the State of the Socialist Republic of Vietnam

1. Any person who for the purpose of opposing the State of the Socialist Republic of Vietnam commits any of the following acts shall face a penalty of five to 12 years’ imprisonment:

a) Making, storing, spreading information, materials, items that contains distorted information about the people’s government;
b) Making, storing, spreading information, materials, items that contain fabricated information that causes dismay among the people;
c) Making, storing, spreading information, materials, items to cause psychological warfare.

2. An extremely serious case of this offence shall carry a penalty of 10 to 20 years’ imprisonment.

3. Any person who makes preparation for the commitment of this criminal offence shall face a penalty of 1 to 5 years’ imprisonment.

What does this mean?

Here is the date you need to remember: January 1, 2018. That’s the day the new and current penal code took effect.

The only reason Doan Trang is charged with the same crime under both the old and current penal codes is that the government has been “investigating” her activities both before and from January 1, 2018.

Some people suspect that Doan Trang is linked to the Dong Tam case as she authored and distributed two Vietnamese-English reports on Dong Tam (in February and September 2020). Some others think her case is mainly about her role at the Liberal Publishing House, a samizdat publisher founded in February 2019. But the two charges suggest that the police take the case further than that.

What did Doan Trang do before 2018?

Her famous book titled “Politics for the Common People” was published in 2017, and there was a report on the environmental disaster in central Vietnam in 2016. She has been involved in international advocacy work since 2013 and she also played a role in the environmental protest movement in Ha Noi in 2015, as well as other activities

Who is in charge of the investigation?

The Investigation Bureau of the Ha Noi Police. 

Although the arrest was jointly conducted by Ha Noi Police, the Ho Chi Minh City Police, and the Ministry of Public Security (MPS), the lead agency is the local government of Ha Noi.

According to the MPS website, the Investigation Bureau of the Ha Noi Police was the organization that opened the case and filed charges against Doan Trang. The People’s Procuracy of Ha Noi later approved these motions. It is unclear when the motions were filed and approved.

Where is Doan Trang now?

The latest information from the mainstream media is that Doan Trang has been transferred to Ha Noi. Ha Noi Police confirmed the information with the Tuoi Tre newspaper.

Where exactly is Doan Trang being detained? Her family told us that they were informed by Ha Noi Police in the evening of October 8 that she is being detained at Detention Center No. 1 (also known as the new Hoa Lo Prison) in Tu Liem district of Ha Noi.

How long is the pre-trial detention expected to be?

According to Article 173 of the Criminal Procedure Code, as the crime Doan Trang is charged with falls under either the very serious or extremely serious categories of both penal codes, the time limit for detention is four months, and can be extended once for three months.

However, if Doan Trang’s case is categorized as an extremely serious type, the procuracy can extend the detention twice, for four months each time.

The process may be prolonged due to requests for further investigation from the Procuracy or the provincial-level court of Ha Noi. In this case, it could become very complicated as with the case of blogger Nguyen Huu Vinh, who was detained for 22 months before going to trial.

When will Doan Trang be allowed to meet with attorneys and receive family visits?

It’s unclear whether or not Doan Trang will be allowed access to legal representation and to receive family visitation.

According to Article 74 of the Criminal Procedure Code, “the head of the Procuracy is authorized, when confidentiality of investigations into national security breach is vital, to sanction defense counsels’ engagement in legal proceedings after investigations end.”

Articles 88 and 117 fall under the national security chapter of the Penal Code, and therefore access to lawyers is not guaranteed. Even if a lawyer is granted permission to assist Doan Trang, his or her access to the accused, in practice, is not always guaranteed.

Family visitation, according to Article 22 of the Law on Temporary Detention and Custody, depends on the decision of the head of the detention facility. If the investigative agency requests the detention facility not allow the detainee to meet with relatives, the facility head may accept the request, and Doan Trang will not be able to see her family before trial. It’s highly unlikely the facility head would reject such a request by the police.

Here is what the law says:

Article 22. Meetings with relatives, defense counsels and consular access of persons held in custody or temporary detention

[…]
4. The head of a detention facility may not allow a visitor to meet a person held in custody or temporary detention in the following cases, for which he/she shall clearly state the reason:

a. The visitor, who is a relative of the person held in custody or temporary detention, fails to produce his/her personal identity papers or papers proving his/her relationship with such person, or the case-settling agency has requested in writing the detention facility not to let such person meet with his/her relatives for the reason that such a meeting may seriously affect the settlement of the case; the visitor, who is a defense counsel, fails to produce his/her personal identity paper or paper on the defense for the person held in custody or temporary detention;
[…]

If visitation is granted, Doan Trang’s family can visit her once a month, with each visit lasting no longer than one hour.

What’s next?

We don’t know when the investigation will be completed or when Doan Trang will be presented before the court. However, here is what we can expect:

  • The People’s Procuracy of Ha Noi will issue an indictment prosecuting Doan Trang.
  • The trial will be conducted by the People’s Court of Ha Noi, a provincial-level court.
  • After the trial, if Doan Trang appeals, the case will go up to the People’s High Court in Ha Noi, a tribunal higher than provincial level and lower than the supreme level. Usually, political cases stop after the appellate.
  • There is no chance that the case will be brought to the People’s Supreme Court, the highest tribunal of the land, as it requires motions filed by either the prosecutor general or the chief justice, both controlled by the very ruling Communist Party that wants to silence critics to protect their monopoly.

Contact Trinh Huu Long: long.trinh@liv.ngo.

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Ranked 32nd Most Powerful Country in the World, Communist Vietnam Set to Assume Greater International Role in 2020

Ranking comes on heels of defense white paper release detailing foreign policy, assumption of ASEAN chairmanship and UN seat

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U.S. News and World Report ranked Communist Vietnam the 32nd most powerful country in the world in 2019, placing it ahead of nearly all of its peers in the region, with the exception of Singapore, which came in 20th. Of the 80 countries included in the survey, Indonesia ranked 47th, the Philippines 51st, Myanmar 53rd, Thailand 54th, and Malaysia 58th.

The magazine defines powerful countries as those who “consistently dominate news headlines, preoccupy policymakers and shape global economic patterns” and forms its rankings “based on an equally weighted average of scores from five country attributes that related to a country’s power: a leader, economically influential, politically influential, strong international alliances and strong military.”

Communist Vietnam rose two spots in the rankings from 2018, bolstered in particular by its high score for “strong military”. The country’s weakest attribute was its lack of “strong international alliances”, an area which is unlikely to improve, according to the country’s recently released defense white paper.

Communist Vietnam released its 2019 defense white paper November 25, in both English and Vietnamese. It has released such reports irregularly, in 1998, 2004, and 2009. Photo: VNExpress

The paper was the first of its kind released in more than a decade, and at its official launch November 25, Deputy Minister of National Defense Senior Lieutenant General Nguyen Chi Vinh highlighted the “4 No’s” that would guide Communist Vietnam’s foreign policy: “Vietnam will not join any military alliances, will not associate with one party to oppose another, will not allow foreign countries to set up a military [base] in the country…” and “will not use force or threaten the use of force in international relations” unless it is under attack.

In an interview with VNExpress, Vinh defended the country’s policy of no military alliances, stating that “Being a part of such an alliance means you have to completely align with one side and possibly have to confront the other, which means more enemies. Vietnam does not stand by any side but peace, reason, justice, and international laws.”

In writing the white paper, the Central Military Commission (CMC, the highest party organ in Communist Vietnam on military policy) and the Ministry of National Defense (MND) said they consulted with representatives of former senior military leaders, as well as with members of the public who expressed reservations about non-alignment.

The CMC and the MND defended their position, equating non-alignment with independence: “Countries that are members of such an alliance will be placed under the leadership of one country, normally a large and powerful one, and will have to adhere to that union’s principles, even when they are not entirely compatible with the country. Member nations of such a bloc will no longer be independent and have the autonomy to decide things on their own.”

Vietnam watchers have acknowledged that the country’s one-party regime is in a difficult position politically, and an active alliance with either the US or China would bring about its own set of challenges, some existential.

The country’s policy of pacifism, self-defense, non-alignment, and multilateralism, however, belies the strong language it uses against encroachment in the East Sea and even stronger language wielded against “hostile forces” in the domestic realm.

Without explicitly calling out China as the culprit of “unilateral actions” and “power-based coercion”, a section in the white paper makes Vietnam’s opposition clear:

New developments in the East Sea, including unilateral actions, power-based coercion, violations international law, militarisation, change in the status quo, and infringement upon Viet Nam’s sovereignty, sovereign rights, and jurisdiction as provided in international law, have undermined the interests of nations concerned and threatened peace, stability, security, safety, and freedom of navigation and overflight in the region.

Communist Vietnam uses even less-restrained language for its domestic opponents, whom it considers to be at virtual war with:

The hostile forces who conspire with reactionaries and political opportunists inside the country have no given up their plots against the Vietnamese revolution. They focus on destroying political, ideological foundation with a view to eliminating the leading role of the CPV and the socialist regime in Viet Nam, “depoliticising” the VPA, sowing division in the entire nation’s great unity, and driving a wedge between the people and the CPV and the VPA.

“Hostile forces” and “reactionaries” “against the revolution” are blanket phrases that the Vietnamese Communist Party (VCP or CPV) reserves for those who seek to end the Party’s monopoly on power. State media routinely uses these terms to describe activists, dissidents, and those who advocate multi-party democracy and liberal values. That the Vietnamese communist revolution ended in 1986 with capitalist market reforms has not abated the usage of these anachronistic and binary terms.

The VCP also implicitly acknowledges the threat social media and online sources of information pose to “national defense”, and similar to other authoritarian, one-party states, conflates Party security with national security. A cybersecurity law that sparked nationwide protests in 2018 went into effect at the beginning of 2019, and the end of 2019 has seen an upsurge of Vietnamese citizens arrested for writing Facebook posts critical of the communist regime.

According to the white paper, Communist Vietnam’s defense spending totaled approximately 5.8 billion USD in 2018, equivalent to 2.3 percent of GDP, an increase from 2.23 percent in 2010. For comparison, the United States spends 3.2 percent of GDP on defense, while China spends only 1.9 percent.

The full English copy of Communist Vietnam’s 2019 defense white paper can be found here, courtesy of Carlyle Thayer, emeritus professor at The University of New South Wales, Canberra.

Communist Vietnam is also set to assume the rotating chairmanship of the Association of Southeast Asian Nations (ASEAN) from 2020-2021, where according to Thayer, the country will be “in a position to exert strong leadership on Code of Conduct issues [in the East Sea] through bilateral consultations with other ASEAN members and by setting the agenda and issuing the Chairman’s statement at all relevant ASEAN meetings and at all ASEAN Plus meetings.”

Though ideologically aligned with China, Communist Vietnam has often been the lone member of ASEAN to speak up forcefully against Chinese activities in the East Sea, a trend which looks to continue. Vietnam’s deputy foreign minister, Nguyen Quoc Dung, commented at a lecture at The Institute of Southeast Asian Studies in Singapore that he “hope[s…] during our chairmanship China will show restraint and refrain from these activities [that violate Vietnam’s Exclusive Economic Zone],” adding that “it wasn’t that other ASEAN countries supported China’s actions, but that they did not protest in the same way.”

Disputed claims in the East Sea (also known as the South China Sea or the West Philippine Sea). Photo: The Economist

The ASEAN chairmanship rotates through its ten members annually, in alphabetical order. Communist Vietnam last served in the position in 2010.

Concurrently, 2020 will also see Communist Vietnam serve as a non-permanent member of the UN Security Council (UNSC), a position which it bid on and won by unanimous vote. The two-year term will begin in January 2020, and joining the country on the UNSC will be Estonia, Niger, Saint Vincent and Grenadines, and Tunisia.

According to The Diplomat, “during [Vietnam’s] campaign for the seat and in comments thereafter, officials have indicated that [their goals] would generally include areas such as promoting sustainable development and advancing preventive diplomacy, drawing on Vietnam’s own historical experience with war and peace as well as contemporary events such as its hosting of the second Trump-Kim summit.” Communist Vietnam last held a seat on the UNSC in 2008-2009.

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Free Press

Minister of Propaganda Says Vietnam’s Press Should Serve Party, Prevent “Self-Evolution”

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At a conference on “Strengthening Party-building Work in Press Organizations” last Friday, Mr. Vo Van Thuong, head of Communist Vietnam’s Central Propaganda Committee, reminded attendees that the press must serve the Vietnamese Communist Party (VCP) and the revolution in order to function “stably” and “without error”. 

Referring to a government plan ratified earlier in the year to develop and manage press throughout the country until 2025, Thuong stated that the time for debate had passed and that strict implementation was now key. According to state media and in sentiment echoed by Thuong, the press serves as “an important channel to fight against incorrect information, fake news, news critical of the regime, and that which makes people lose trust in the Party-State.”

In his remarks at the conference, Thuong stressed the importance of ideological work in press organizations and making sure Party cadres and Party members guard against signs of political, ideological, and moral decay. In particular, Thuong warned against signs of “self-development” and “self-evolution”, negative terms that refer to the shift towards liberal democratic values–values which are anathema to the ruling Communist Party.

In this vein, Thuong took to admonishing journalists who lacked “proper training” and were critical of society but not sufficiently critical of themselves. He also stressed the importance of proper training for leadership and suggested greater oversight of the Party committees and organizations involved in press organizations, particularly when it comes to adherence to Party regulations.

“In order to help press organizations develop self-awareness and a more proper nature, we should do as a number of comrades have stated: ‘Sometimes those who educate [Party members and cadres] must themselves be educated’,” Thuong stated.

Thuong reminded attendees that Vietnam’s journalists were journalists of the revolution, journalists of the Party, and journalists of the state; as such, they should work closely with the Central Propaganda Committee, the Ministry of Information and Communication, various central Party committee blocs, and the Vietnamese Journalists Association, in order to strengthen the leadership of the Party.

The plan approved April 2nd of this year also seeks to streamline Communist Vietnam’s press environment, limiting government bodies to one newspaper and one magazine, with a shift to electronic rather than print forms, and with the “Vietnamese Communist Party E-Newspaper” and the Central Propaganda Committee serving as the “core” of the country’s press structure. 

Along with head of propaganda, Thuong is also currently a member of the Politburo (short for “Political Bureau”, the leading body of the Vietnamese Communist Party), and the secretary of the Central Committee (from which members of the Politburo are chosen). In the past, Thuong was deputy secretary of the Ho Chi Minh City (HCMC) Standing Committee, first secretary of the Central Committee of the HCMC Communist Youth Union, and secretary of the Quang Ngai Provincial Party Committee.

According to Reporters Without Borders, Vietnam ranks 176th out of 180 countries in terms of press freedom. Although freedom of the press is guaranteed by Article 25 of the 2013 Vietnamese Constitution, Communist Vietnam is a one-party, authoritarian state that does not tolerate challenges to its power. It controls all official media, newspapers, and publishing houses in the country and regularly censors material that does not conform to sanctioned historical or political narratives.

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