Economy of Vietnam
Until the French colonization in the mid-19th century, Vietnam's economy had been mostly agrarian, subsistence-based and village-oriented. French colonizers, however, deliberately developed the regions differently as the French needed raw materials and a market for French manufactured goods, designating the South for agricultural production as it was better suited for agriculture, and the North for manufacturing as it was naturally wealthy in mineral resources. Though the plan exaggerated regional divisions, the development of exports—coal from the North, rice from the South—and the importation of French manufactured goods stimulated domestic commerce.
Western imperialism in Asia
France remained determined to retain its control of Indochina. However, in Hanoi, in 1945, a broad front of nationalists and communists led by Ho Chi Minh declared an independent Republic of Vietnam, commonly referred to as the Viet Minh regime by Western outsiders. France, seeking to regain control of Vietnam, countered with a vague offer of self-government under French rule. France's offers were unacceptable to Vietnamese nationalists; and in December 1946 the Việt Minh launched a rebellion against the French authority governing the colonies of French Indochina. The first few years of the war involved a low-level rural insurgency against French authority. However, after the Chinese communists reached the Northern border of Vietnam in 1949, the conflict turned into a conventional war between two armies equipped with modern weapons supplied by the United States and the Soviet Union. Meanwhile, the France granted the State of Vietnam based in Saigon independence in 1949 while Laos and Cambodia received independence in 1953. The US recognized the regime in Saigon, and provided the French military effort with military aid.