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The so-called Bao Dai Solution of the late 1940s first began in the wake of World War I, when the former governor general of Indochina, Albert Sarraut, then minister of the Colonies, joined hands with the resident of Annam, Pierre Pasquier, to use the crown prince Bao Dai as the incarnation of Franco-Vietnamese collaboration and as a politico-cultural weapon to win over Vietnamese support and combat communists and nationalists contesting colonial rule. After receiving in Paris a French education fit for aristocrats and nobles, Bao Dai returned to Vietnam in 1932 and was dispatched on imperial tours to help calm tensions in areas recently wracked by communist-backed peasant revolts. Under Pasquier’s direction, Bao Dai also tried to revive the monarchy and administer a Vietnamese government in accordance with Annam’s status as a protectorate. However, the French inability to accord a modicum of autonomy, symbolized by the resignation of Ngo Dinh Diem from the government, undermined this first attempt to use Bao Dai and the monarchy for any progressive or counter-revolutionary purposes. Bao Dai withdrew thereafter, uninterested in French efforts to mobilize royalty via his person and disappointed by the French incapacity to provide any real autonomy to the monarchy. Even Vichy’s Jean Decoux privately lamented that Bao Dai was no solution.

However, a host of conservative minded colonial officials, both republicans coming out of the French resistance and those who had continued to serve Vichy faithfully in Indochina during the war, joined hands after 1945 to resurrect the Bao Dai project for a third time (Decoux failed during World War II), this time to counter the national threat posed by the emergence of the Democratic Republic of Vietnam (DRV). This was particularly true after Charles de Gaulle’s would-be Vietnamese king, Duy Tan, died in a plane crash in 1945. While Gaullists regretted that Bao Dai had publicly abdicated in August 1945 and become a supreme advisor to the new republic, colonial administrators such as Charles Bonfils, Albert Torel, Jean Cousseau, and Léon Pignon had no such qualms. These men all knew each other and the emperor from before the war and were intimately familiar with Sarraut, Pasquier, and Decoux’s royalist projects.

Starting in July 1946, as the DRV and French military officers began eliminating the anti-French anti-communist parties, the French began working behind the scenes to woo Bao Dai back home (Bao Dai had left the DRV in April 1946 and chosen exile in Hong Kong). Pignon and Cousseau took the lead. The High Commissioner for Indochina Georges Thierry d’Argenlieu supported the idea of finding a Vietnamese “Solution” in order to counter the nationalist one proposed by Ho Chi Minh. Bao Dai did not, however, dutifully return to Vietnam as he had done for the French in 1932. He was well aware of how he had been used since World War I and spoke in derisive terms of the so-called Bao Dai Solution. He remained in Hong Kong hoping to pressure the French to accord him what they had refused Ho Chi Minh: national unity and real independence.

In December 1947, following the French decision to exclude the possibility of new talks with Ho Chi Minh’s government, Bao Dai met the High Commissioner Émile Bollaert in the Bay of Ha Long. A joint declaration was written up and a secret protocol was initialed. Bao Dai agreed to join the “Solution”, although the creation of the Associated State of Vietnam was never referred to as such. A future unified Vietnam would remain within the French Union as an associated state, the former emperor agreed, and the French would administer much of its military and foreign affairs. However, in exchange, the French had to recognize Vietnamese independence and unification, meaning the transfer of Cochinchina. Nationalist leaders, notably Ngo Dinh Diem, refused to accept the secret protocol and moved to the sidelines to wait things out. Bao Dai, under pressure to reach an agreement at a time when the international situation was hostile to the DRV, tried to renegotiate the terms but finally accepted the creation on 26 March 1948 of “a provisional central government” (un gouvernement central provisoire) under the leadership of General Nguyen Van Xuan. On 25 May 1948, the French agreed to allow this government to represent the former colonial regions of Tonkin, Annam and Cochinchina. On 5 June 1948, in the Bay of Ha Long, Bollaert initialed another protocol, in the presence of the emperor, setting the foundation of Franco-Vietnamese relations and agreeing that France would recognize Vietnamese independence. Bao Dai insisted however that the French go all the way and legally transfer Cochinchina to Vietnam and sign a new accord to that effect. Gone was the Provisional Government of the Republic of Cochinchina (also known briefly as the gouvernement provisoire du Sud-Vietnam). In short, the deteriorating situation in China, increased pressure from the United States, the inability of the French army to defeat the DRV, and the accession of Léon Pignon to the position of high commissioner for Indochina combined to force the French to reach the famous accord of 8 March 1949 between Vincent Auriol and Bao Dai. France formally recognized Vietnam’s independence, even though it was limited in the diplomatic, economic, and military domains. On 23 April 1949, the Cochinchinese Assembly voted to allow the former French colony of Cochinchina to be attached to the rest of Vietnam.

Bao Dai finally returned to Vietnam after more than four years abroad. However, the French refused to allow the imperial head of state to take up residence in the palace of the high commissioner in Saigon. Instead Bao Dai had to set up shop in Dalat. On 2 July 1949, Bao Dai formally oversaw the creation of the Associated State of Vietnam. He became head of state and allowed his prime minister to run a government that was no longer “provisional”. On 7 August 1949, the DRV’s representative in France, Tran Ngoc Danh, unilaterally closed the government’s delegation in Paris. (The French could not recognize, even indirectly, two Vietnams.) While the French bowed to British and American pressure to grant increased independence to the Vietnamese in order to take on the wider and more important communist threat triggered by the Chinese communist victory on 1 October 1949, the French, led by Léon Pignon, also recast the colonial Bao Dai Solution as an integral part of the American-led war against global communism. In February 1950, following the Chinese and Soviet diplomatic recognition of Ho Chi Minh’s government, the United Kingdom and the United States recognized the Associated State of Vietnam and thus endorsed the Bao Dai Solution dating back to Sarraut’s post-World War I strategy.