For many years Vietnam formed part of the French colony of Indochina, along with Cambodia and Laos. In 1941, the Japanese occupied Vietnam during their WWII sweep through South East Asia. The resistance to the Japanese was led by the Indochinese Communist Party.
Communist revolutionary Ho Chi Minh established the Viet Minh during WWII in order to gain independence from France. Fighting continued until 1954 when the French surrendered to the Viet Minh at Dien Bien Phu and Hanoi became capital of North Vietnam, but Ho Chi Minh was determined to reunite the whole country.
The USA came to the support of South Vietnam and full-scale war - with the southern Communist guerrillas (known as the Viet Cong), the North Vietnam Army and the Soviet Union on one side, and the Americans and the South Vietnamese Army on the other - broke out in 1965. The Americans withdrew in 1973 and fighting continued until 1975 when Saigon fell to North Vietnamese troops. Vietnam was reunited under Communist rule the following year.
Vietnamese troops occupied Cambodia in 1978 to drive out the genocidal Khmer Rouge regime and stayed there until it withdrew its troops in 1989.
After withdrawing from Cambodia, Vietnam concentrated on rebuilding its own economy and following years of rampant inflation, poverty and repression, the government introduced economic reform or doi moi in 1986, allowing people to own their own businesses. Nonetheless, the Vietnamese economy suffered from the withdrawal of aid and subsidised goods from the former USSR and from Eastern Europe, as well as the continuing US-organised trade boycott instituted after the US withdrawal. Relations with the USA eased after full diplomatic relations were restored in 1995.
Recent reforms resulted in rapid economic growth, until the global crisis in 2008, but there has been no parallel development in the country's political environment – the Communist Party has no intention of relaxing its hold on political power and has been criticised by human rights groups for increasingly suppressing online dissent and freedom of expression.