Executive Summary
Vietnam’s Communist Party chief To Lam is seeking to consolidate power by combining the roles of party chief and state president, marking a potential shift toward a China-style centralized leadership model. As the Communist Party congress convenes on January 19, 2026, this political reconfiguration carries significant implications for Singapore, Vietnam’s closest ASEAN partner and largest investor in the region. With over $84 billion invested across 3,951 active projects and bilateral trade exceeding $4.9 billion in early 2025, Singapore’s economic interests in Vietnam are substantial and growing.
The Power Consolidation
Breaking with Tradition
Vietnam has historically operated under a collective leadership model where power is shared among four key positions: party chief, president, prime minister, and National Assembly chair. This arrangement, rooted in the Communist Party’s tradition of consensus-based governance, has served as a check on individual ambition and ensured factional balance within the party.
To Lam’s bid to merge the top two positions represents a departure from this power-sharing framework. While such consolidation has occurred temporarily during leadership transitions, making it permanent would fundamentally alter Vietnam’s political architecture. The move mirrors China’s governance model, where Xi Jinping heads both party and state, wielding concentrated authority to drive policy implementation.
Military Negotiations and Internal Dynamics
The proposed consolidation involves delicate negotiations with the military, a powerful faction that currently holds the presidency. Sources indicate the military may relinquish the ceremonial role in exchange for maintaining autonomy over senior officer promotions and broader institutional independence. Military leaders are reportedly seeking safeguards to limit Lam’s authority over defense matters.
Early signs suggest some of Lam’s ambitious economic policies have faced unexpected resistance ahead of the congress, including initiatives on credit growth and high-speed railway development. These setbacks may reflect internal pushback from conservative factions wary of concentrated power and rapid reforms.
The January 19 Congress
Approximately 1,600 delegates will gather in Hanoi for the week-long congress to elect 200 members of the new central committee. A significant influx of newcomers is expected, raising questions about whether they will confirm decisions made by the roughly 140 delegates who voted in December 2025. The central committee will then elect the party chief and politburo, with Lam indicating the new politburo will have 17 to 19 members.
Singapore’s Economic Stakes
Deep Investment Ties
Singapore’s relationship with Vietnam represents one of Southeast Asia’s most successful bilateral partnerships. As of January 2025, Singapore maintained its position as Vietnam’s largest ASEAN investor and second-largest overall, trailing only South Korea. The scale of engagement is remarkable: 3,951 active projects totaling $84.14 billion, spanning 18 of 21 economic sectors and reaching 54 of Vietnam’s 63 provinces.
Key sectors attracting Singaporean capital include manufacturing, real estate, energy, and infrastructure. Major Singaporean companies with substantial Vietnamese operations include Keppel, CapitaLand, Grab Holdings, United Overseas Bank, Kingsmen, and Mega Textile Singapore. The Vietnam-Singapore Industrial Parks network, established nearly three decades ago, now encompasses 18 parks across 13 provinces, employing over 300,000 workers.
Bilateral Trade Dynamics
Bilateral trade has grown steadily, with Vietnam now ranking as Singapore’s ninth largest trading partner. In January 2025 alone, two-way trade reached approximately $2.53 billion, marking a 16.83% year-on-year increase. Singapore serves as Vietnam’s eighth largest export destination, while Vietnam is Singapore’s 15th largest import source.
The trading relationship reflects complementary economic structures. Vietnam exports integrated circuits, broadcasting equipment, and crude petroleum to Singapore, while importing machinery, electronics, and specialized services. Singapore’s position as a regional commercial hub and Vietnam’s role as a manufacturing powerhouse create natural synergies.
The Comprehensive Strategic Partnership
In March 2025, during To Lam’s official visit to Singapore, the two nations elevated their relationship to a Comprehensive Strategic Partnership, making Vietnam the only ASEAN country to hold this status with Singapore. This upgrade provides a framework for deeper cooperation across multiple dimensions, including digital transformation, green energy, sustainable infrastructure, and skills training.
The partnership reflects Singapore’s strategic calculation that Vietnam represents a critical node in Southeast Asia’s economic future. With Vietnam’s GDP projected to nearly double by 2029 and its manufacturing sector attracting increasing foreign investment, Singapore seeks to position itself as the preferred gateway for Vietnamese enterprises expanding regionally.
Strategic Implications for Singapore
Scenario 1: Successful Power Consolidation
If To Lam succeeds in merging the party chief and presidential roles, Singapore may face both opportunities and risks. On the positive side, centralized decision-making could accelerate economic reforms, streamline bureaucratic processes, and enhance policy predictability. A more empowered leader might push through ambitious infrastructure projects, technology transfers, and regulatory reforms that benefit foreign investors.
To Lam has demonstrated a willingness to engage internationally, making frequent overseas trips in 2025 to strengthen diplomatic and economic ties. A consolidated leadership could provide Singapore with a clearer single point of contact for high-level negotiations, potentially expediting major projects and resolving investment disputes more efficiently.
However, centralization also carries risks. Lam’s background in security apparatus and his expansion of police powers have raised concerns among some observers about governance approaches. If consolidation emboldens more assertive domestic policies or nationalist economic measures, Singapore’s investors could face increased regulatory uncertainty or pressure for technology transfers and local content requirements.
Scenario 2: Fragmented Outcome
If the congress rejects consolidation or installs a compromise arrangement, Vietnam may experience a period of leadership uncertainty and factional competition. This could slow economic reforms, create policy inconsistency, and complicate long-term investment planning for Singaporean companies.
Fragmentation might also intensify bureaucratic obstacles as different factions protect their institutional interests. Major infrastructure projects, regulatory approvals, and dispute resolutions could face delays as competing power centers negotiate outcomes. For Singapore, this scenario requires hedging strategies and diversification of Vietnamese partnerships across multiple political factions.
Foreign Policy Trajectories
Vietnam’s foreign policy orientation under consolidated or fragmented leadership will significantly impact Singapore’s interests. Vietnam has historically pursued a “bamboo diplomacy” approach, balancing relationships with major powers while maintaining independence through ASEAN multilateralism. China remains Vietnam’s largest trading partner and top foreign policy priority, with two-way trade exceeding $200 billion annually. The United States follows as Vietnam’s biggest export market at over $100 billion.
To Lam’s first overseas visit as party chief went to Beijing, where he received a 21-gun salute and extensive ceremonial honors. He emphasized that China represents a “strategic choice and top priority” in Vietnamese foreign policy. This China-first signaling, while consistent with Vietnam’s historical approach, raises questions about how Hanoi will balance deepening economic ties with Beijing against concerns about Chinese assertiveness in the South China Sea.
For Singapore, Vietnam’s China relationship presents both opportunities and complications. As Western companies seek to diversify supply chains away from China through “China+1” strategies, Vietnam has emerged as a primary beneficiary. Singapore-based multinational corporations use Vietnam as a manufacturing hub while maintaining Singapore as their regional headquarters, legal domicile, and financial center. This triangular arrangement allows Singapore to capture value from supply chain reconfiguration.
However, if Vietnam tilts too closely toward China under consolidated leadership, Singapore might face pressure to align its positions on sensitive regional issues. Singapore has carefully maintained neutrality on South China Sea disputes while upholding freedom of navigation and international law. Excessive Vietnamese accommodation of Chinese preferences could complicate Singapore’s diplomatic balancing act.
ASEAN Centrality and Regional Architecture
Vietnam and Singapore share a strong commitment to ASEAN centrality as the foundation of regional architecture. Both countries view the ten-member bloc as essential for maintaining strategic autonomy amid great power competition. Singapore has consistently championed ASEAN unity and effectiveness, while Vietnam uses the organization to multilateralize its disputes with China and broaden its diplomatic maneuver room.
A Vietnam under consolidated leadership might pursue more assertive ASEAN initiatives, potentially strengthening the organization’s ability to speak with one voice on regional issues. Alternatively, if Lam prioritizes bilateral relationships with major powers over multilateral coordination, ASEAN cohesion could weaken. Singapore, as a small state dependent on rules-based international order and collective security mechanisms, has vital interests in maintaining ASEAN’s relevance and unity.
The two countries’ parallel Comprehensive Strategic Partnerships with both the United States and China demonstrate their shared commitment to multi-alignment. Singapore and Vietnam both seek to avoid choosing sides in superpower rivalry, instead maximizing benefits from engagement with all major powers. This convergence of strategic approaches provides a foundation for policy coordination on regional challenges.
Economic Policy Directions
To Lam’s economic agenda will directly impact Singapore’s commercial interests. His first term saw ambitious efforts to accelerate credit growth, develop high-speed rail infrastructure, and attract advanced manufacturing investments. Some initiatives faced pushback from conservative factions concerned about debt sustainability and economic overheating.
If consolidation empowers Lam to override internal resistance, Singapore could benefit from accelerated infrastructure development creating new investment opportunities. Projects like the North-South Expressway, upgraded seaports, and expanded industrial zones would enhance Vietnam’s attractiveness as a manufacturing destination. Singaporean companies specialize in infrastructure development, project finance, and facilities management, positioning them to capture significant value from Vietnam’s infrastructure boom.
However, aggressive economic expansion could also trigger risks. Excessive credit growth might create financial instability, affecting Singaporean banks’ Vietnamese operations and exposing real estate investments to market corrections. Singapore’s property developers, including CapitaLand and Keppel, have substantial Vietnamese holdings that could be vulnerable to asset bubbles or sudden policy shifts.
Regulatory predictability remains crucial for Singapore’s investors. Vietnam has made significant progress in improving its business environment, but concerns about corruption, bureaucratic discretion, and sudden policy changes persist. Consolidated leadership might enhance policy consistency or, conversely, enable abrupt shifts driven by individual preferences rather than institutional consensus.
Technology and Digital Economy
Both Singapore and Vietnam are investing heavily in digital economy transformation. Vietnam’s digital economy contributed 16.5% to GDP in 2022 and is projected to grow rapidly. Singapore leads the region in fintech, smart city technologies, and digital infrastructure, creating opportunities for technology partnerships.
Singaporean companies like Grab Holdings have successfully scaled across Vietnam, leveraging Singapore’s regulatory sandbox approach to test innovations before regional expansion. If Vietnam under Lam accelerates digital transformation efforts, Singapore-based tech companies could capture significant market share in e-commerce, digital payments, logistics technology, and enterprise software.
However, technology transfer pressures and data localization requirements could complicate operations. Vietnam may seek to develop indigenous capabilities by requiring foreign firms to share technology, train local engineers, and store data domestically. Singapore must navigate these demands while protecting its companies’ intellectual property and maintaining operational flexibility.
Semiconductor and Advanced Manufacturing
Vietnam’s semiconductor sector development represents a major opportunity for Singapore. Vietnam has attracted significant investments in chip packaging and assembly, positioning itself as a node in global semiconductor supply chains. Singapore’s advanced capabilities in semiconductor design, manufacturing equipment, and talent development create natural partnership opportunities.
The United States’ efforts to build “friend-shoring” supply chains in critical technologies could benefit both Singapore and Vietnam. Singapore serves as a trusted intermediary between Western technology leaders and Southeast Asian manufacturing hubs. Vietnam’s political stability and competitive labor costs make it an attractive location for semiconductor expansion.
If consolidated leadership enables Vietnam to streamline regulatory approvals and provide more generous incentives for semiconductor investments, Singapore-based companies could play matchmaker roles connecting global chip firms with Vietnamese manufacturing capacity. Singapore’s established relationships with major semiconductor companies and its expertise in industrial park development position it to facilitate Vietnam’s sector growth.
Climate and Energy Transition
Both countries face significant climate adaptation challenges and have committed to net-zero targets. Vietnam aims to phase out coal power and dramatically expand renewable energy capacity, requiring hundreds of billions in infrastructure investment. Singapore has developed expertise in clean energy financing, carbon trading, and energy efficiency technologies.
Singaporean companies like Keppel are already investing in Vietnamese renewable energy projects. If Lam’s leadership prioritizes energy transition, Singapore could provide project finance, engineering expertise, and technology solutions for solar, wind, and battery storage developments. Singapore’s carbon services ecosystem, including exchanges and advisory services, could support Vietnam’s transition to low-carbon growth.
However, energy security concerns might compete with climate objectives. Vietnam’s rapid industrialization requires reliable, affordable electricity. If consolidated leadership prioritizes economic growth over environmental goals, renewable energy investments could face delays or reduced policy support.
Risk Factors and Contingencies
South China Sea Tensions
Vietnam’s maritime disputes with China represent a persistent wildcard affecting regional stability and investment confidence. If tensions escalate in contested waters, Vietnam might face economic coercion from China, including border closures, trade restrictions, or investment freezes. Such scenarios would disrupt Singapore-Vietnam supply chains and threaten Singaporean investments.
To Lam’s approach to South China Sea issues will signal his broader strategic orientation. If he adopts a more conciliatory posture toward China, immediate tensions might ease but long-term sovereignty concerns could intensify. If he takes a more assertive stance, supported by deeper security cooperation with the United States, India, and Japan, Vietnam might experience enhanced deterrence but also heightened Chinese pressure.
Singapore’s interests lie in peaceful resolution through international law and ASEAN-mediated negotiations. As a major trading nation dependent on freedom of navigation, Singapore cannot afford major disruptions to regional sea lanes. Singapore will likely encourage Vietnam to maintain its traditional approach of balancing cooperation with China against diversified security partnerships and multilateral engagement.
Domestic Political Stability
Consolidated leadership might enhance political stability or, conversely, create vulnerabilities if succession planning weakens. Vietnam has managed relatively smooth leadership transitions through its collective model. If power concentration around Lam proceeds without clear mechanisms for eventual succession, future transitions could become more contentious.
Political instability would directly threaten Singapore’s investments. Real estate projects, industrial parks, and infrastructure developments require long-term policy consistency and predictable property rights. Any governance crisis affecting rule of law or contract enforcement would jeopardize billions in Singaporean capital.
Singapore’s government maintains close party-to-party relations with Vietnam’s Communist Party through regular exchanges and training programs. The Vietnam-Singapore Training Centre in Hanoi has trained thousands of Vietnamese officials in public administration, economic management, and urban planning. These institutional ties provide channels for Singapore to monitor political developments and communicate concerns about policy directions affecting its interests.
Labor and Social Dynamics
Vietnam’s young, growing workforce represents a major competitive advantage, but also social management challenges. Rising labor costs, workforce skill gaps, and increasing worker expectations for better conditions could affect manufacturing competitiveness. If consolidated leadership enables more effective education and training policies, Vietnam could transition toward higher-value production. If labor policies become more restrictive or costs rise too quickly, some manufacturing might relocate to lower-cost alternatives like Bangladesh or Cambodia.
Singapore’s investments in Vietnamese manufacturing depend on continued cost competitiveness and workforce quality. Singaporean companies operate labor-intensive factories employing hundreds of thousands of Vietnamese workers. Maintaining positive labor relations, competitive costs, and skills development will be essential for protecting these investments’ viability.
Corruption and Governance
Vietnam has pursued anti-corruption campaigns in recent years, with To Lam playing a central role during his tenure as security chief. These efforts have removed numerous senior officials and business leaders, creating both opportunities and risks. Reduced corruption could improve business environment quality and contract enforcement. However, overly aggressive campaigns might also create policy paralysis as officials fear making decisions that could be later scrutinized.
Singapore’s companies value Vietnam’s improving governance but remain concerned about residual corruption risks, bureaucratic obstacles, and discretionary enforcement. If consolidation enhances Lam’s ability to drive governance reforms, Singapore’s investors could benefit from reduced unofficial costs and more transparent regulatory processes. If anti-corruption efforts become politicized or unpredictable, business uncertainty might increase.
Strategic Recommendations for Singapore
Maintain and Deepen Institutional Ties
Singapore should continue strengthening institutional relationships across multiple Vietnamese power centers regardless of leadership configuration outcomes. This includes party-to-party exchanges, ministerial dialogues, technical cooperation programs, and people-to-people connections. Diversified relationships across governmental, party, military, and business networks provide resilience against leadership changes and factional shifts.
The Comprehensive Strategic Partnership framework offers mechanisms for regular high-level engagement. Singapore should leverage annual connectivity ministerial meetings and working groups to address specific commercial concerns, resolve investment disputes, and explore new cooperation areas. Regular summits between senior leaders maintain relationship momentum and provide opportunities to recalibrate strategies as conditions evolve.
Emphasize Win-Win Economic Cooperation
Singapore should position its engagement with Vietnam as mutually beneficial partnership rather than one-sided investment. Highlighting how Singaporean investments create Vietnamese jobs, develop local skills, upgrade infrastructure, and integrate Vietnam into global value chains demonstrates shared interests. This narrative resists potential nationalist pressures to restrict foreign investors or demand excessive concessions.
The Vietnam-Singapore Industrial Parks serve as powerful symbols of successful collaboration. Singapore should continue developing these platforms while exploring new models like special economic zones, technology parks, and innovation districts that showcase advanced cooperation. Highlighting Vietnamese success stories of companies that scaled through Singapore provides tangible examples of partnership value.
Diversify Investment Portfolio
While maintaining major positions in manufacturing and real estate, Singapore should diversify into sectors positioned for growth under various leadership scenarios. Technology, renewable energy, healthcare, education, and financial services offer opportunities less vulnerable to policy volatility. Singapore’s competitive advantages in these sectors align with Vietnam’s development priorities regardless of political configuration.
Risk management requires geographic diversification within Vietnam beyond traditional hubs like Ho Chi Minh City and Hanoi. Expanding into secondary cities and emerging provinces reduces exposure to localized policy changes or infrastructure constraints. It also demonstrates Singapore’s commitment to supporting Vietnam’s balanced regional development.
Leverage ASEAN Mechanisms
Singapore should use ASEAN frameworks to advance shared interests with Vietnam while protecting regional stability. ASEAN economic integration initiatives, infrastructure connectivity projects, and digital economy agreements provide multilateral platforms reducing bilateral political sensitivities. Working through ASEAN also ensures that Singapore-Vietnam cooperation contributes to broader regional prosperity rather than appearing as narrow bilateral deal-making.
Both countries share interests in strengthening ASEAN’s ability to manage great power competition, maintain strategic autonomy, and uphold rules-based international order. Singapore should coordinate closely with Vietnam on ASEAN positions regarding South China Sea conduct codes, free trade architecture, and regional security cooperation. United advocacy amplifies both countries’ influence on regional outcomes.
Engage Chinese and American Partners
Singapore should communicate clearly with both China and the United States about its interests in Vietnamese stability and prosperity. As major powers compete for influence in Vietnam, Singapore can serve as honest broker explaining how maintaining Vietnam’s independence and development serves broader regional interests. Singapore’s credibility with both Beijing and Washington positions it to encourage constructive engagement rather than zero-sum competition over Vietnam.
Singapore-based multinational corporations provide mechanisms for triangular cooperation. American, European, and Japanese companies use Singapore as their Southeast Asian headquarters while operating Vietnamese manufacturing facilities. This structure allows them to engage Vietnamese markets while maintaining regional flexibility. Singapore should highlight how this model serves everyone’s interests: Vietnam gains advanced manufacturing capabilities, multinationals access competitive production costs, and Singapore captures value through headquarters functions and services.
Invest in Knowledge and Analysis
Singapore should enhance its analytical capabilities regarding Vietnamese politics, economics, and society. Understanding factional dynamics, policy debates, local business environments, and social trends enables more sophisticated strategy formulation. Singapore’s think tanks, universities, and research institutions should expand Vietnamese studies programs, support scholars conducting fieldwork, and maintain active dialogue with Vietnamese counterparts.
Business intelligence gathering becomes especially important during periods of political transition. Singaporean companies need timely, accurate information about regulatory changes, investment opportunities, and risk factors. Singapore’s government and business associations should provide platforms for information sharing, risk assessment, and collective strategy development.
Prepare Contingency Plans
While maintaining optimistic baseline assumptions about Vietnam’s trajectory, Singapore should develop contingency plans for adverse scenarios including political instability, economic crisis, major South China Sea conflicts, or sharp policy shifts against foreign investors. Scenario planning exercises involving government agencies, business leaders, and experts can identify early warning indicators and response options.
Contingencies might include diversifying supply chains beyond Vietnam, establishing emergency protocols for protecting personnel and assets, activating political channels for addressing grievances, or coordinating with other affected foreign governments on collective responses. Preparation doesn’t signal pessimism but rather prudent risk management recognizing that political transitions carry inherent uncertainties.
Conclusion
Vietnam’s leadership transition represents a pivotal moment for Southeast Asia’s political and economic landscape. To Lam’s bid to consolidate power through merging party and presidential roles would mark a significant departure from traditional governance models, with implications rippling across the region. For Singapore, which has cultivated Vietnam as its closest ASEAN partner and largest regional investment destination, the stakes are substantial.
The relationship’s depth provides resilience against political turbulence. Over five decades of diplomatic relations, both countries have built robust institutional frameworks, personal networks, and economic interdependencies that transcend individual leaders. The March 2025 elevation to Comprehensive Strategic Partnership status reflects both governments’ commitment to deepening cooperation regardless of leadership configurations.
Singapore’s strategic interests in Vietnam center on maintaining political stability, economic openness, policy predictability, and continued integration into global value chains. Whether through consolidated or collective leadership, Vietnam’s trajectory toward middle-income status, technological advancement, and regional influence aligns with Singapore’s vision for a prosperous, stable Southeast Asia.
The January 19 congress will clarify Vietnam’s immediate direction, but the fundamental dynamics shaping Singapore-Vietnam relations remain constant. Both countries share interests in ASEAN centrality, balanced great power relationships, economic integration, and sustainable development. These common interests provide foundations for continued partnership through political transitions and leadership changes.
Singapore’s approach should combine strategic patience with active engagement. Rather than attempting to influence Vietnamese internal politics, Singapore should focus on strengthening institutional ties, expanding economic cooperation, demonstrating partnership value, and preparing for multiple scenarios. This strategy respects Vietnamese sovereignty while protecting Singaporean interests and contributing to regional prosperity.
The coming months will test both countries’ commitment to their partnership as Vietnam navigates its leadership transition amid challenging regional and global environments. Singapore’s track record of diplomatic sophistication, economic pragmatism, and long-term relationship building positions it well to maintain and deepen ties with Vietnam under any leadership configuration that emerges from the congress.
Ultimately, Singapore’s interests lie not in any particular Vietnamese leader or governance model, but in Vietnam’s success as a stable, prosperous, open economy contributing to Southeast Asian development and regional peace. By maintaining this principle-based approach while adapting tactically to evolving circumstances, Singapore can protect its substantial economic stakes while advancing broader strategic objectives in mainland Southeast Asia.