Joshua Kurlantzick, Senior Fellow for Southeast Asia
The United States did not have diplomatic relations with mainland China in the late 1940s after the communist takeover (though theoretically it maintained diplomatic relations through ties with Taiwan). The United States ended diplomatic relations with Vietnam following the Vietnam War in 1975.
Similar motivations prompted the United States to subsequently reestablish diplomatic relations with each country: geopolitical strategy and economic opportunity.
The restoration of U.S. ties with mainland China began with the famous Nixon visit to China in 1972 and concluded with formal renormalization in 1979. The renormalization happened primarily for strategic reasons. The Nixon administration viewed reestablishing ties with China as putting greater pressure on the Soviet Union and enhancing American power in East Asia. Later, as China began a process of economic reforms, it became central in manufacturing, which created an enormous market for American companies and which led to an exponential growth of U.S.-China economic ties.
The United States and Vietnam formally renormalized relations in 1995. On the U.S. side, the enmity had cooled two decades after the Vietnam War. Prominent veterans such as Senators John McCain and John Kerry led the war veteran community in reembracing Vietnam, showing the strategic importance of Vietnam to the Pentagon. The opening of Vietnam was also an opportunity for American companies to stake claims in East Asia. Additionally, the large Vietnamese-American population, which in the 1970s to early 1980s had been adamantly opposed to the Hanoi government, began to shift its position, making it easier for Congress to support reestablishing relations.
From the Vietnamese perspective, Vietnam had won the war, and in the 1980s and early 1990s it was opening its economy and seeking foreign investment. Restoring ties with the United States was natural as well as a hedge against the rise of China, its historic enemy.