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.
Sino-Vietnamese War
On the urging of the Soviet Union, Ho Chi Minh initially attempted to negotiate with the French, who were slowly reestablishing their control across the area, although still under British control until hostilities had ceased. Once hostilities had ended the British handed over the territory to the French. In January 1946, the Viet Minh won elections across central and northern Vietnam. On 6 March 1946, Ho signed an agreement allowing French forces to replace Nationalist Chinese forces, in exchange for French recognition of the Democratic Republic of Vietnam as a "free" republic within the French Union, with the specifics of such recognition to be determined by future negotiation. British forces departed on 26 March 1946, leaving Vietnam in the control of the French. The French landed in Hanoi by March 1946 and in November of that year they ousted the Viet Minh from the city. Soon thereafter, the Viet Minh began a guerrilla war against the French Union forces, beginning the first Indochina War.