I like German Vietnam-
The French also offered Indochina as a territorial concession after the war of 1870, but Bismarck didn't want it. In truth, I don't see any German gov ernment taking it, but the image of German Vietnam is just too strange not to like.
Interesting divergence indeed. At this time (1871) the actual transfer would yield basically the southern third of Indochina - Cochinchina as a colony and a protectorate treaty over Cambodia. The rest of Vietnam at this time was independent, and Laos was under Siamese control.
First of all, I don't see any reason for this to bother Britain any more than Britain was bothered by the transfer of Alsace-Lorraine in OTL.
The Germans will have to administer the place so they might also take part of the French Navy and merchant marine in their reparations package. One thing about transferring colonies is that I think it sort of invites a revolt. The better prepared the new occupier is, the easier and faster it would be to defeat such a revolt.
The sectarian politics of German Indochina would be quite elaborate. The French missionary interest and missionary lobby were key drivers in French colonization, so one would suppose that Catholic Germans become the new champions of Vietnamese Catholics.
But, German rule will open the door to competing Lutheran missionaries.
The Hamburg based J.C. Goddefroy and sons who dominated the South Seas trade in Samoa and other parts of Polynesia may become investors in Cochinchina enterprises and avoid eventual bankruptcy.
And the first 4 to 5 years of German rule will coincide with Bismarck's anti-Catholic Kulturkampf, making things more convoluted. This could affect Indochina in a couple of ways. He could stop the Kulturkampf at the waters edge and consider Catholicism a useful/necessary tool of German rule in the colonies. Or, the Kulturkampf could be extended, some Vietnamese would become Protestants but really committed Catholics could remove their support for European rule, leaving German rule just upheld by bayonets and money. Catholic rebels could get some nationalistic street cred in Vietnamese culture. Alternatively, Kulturkampf could lead to Buddhist Vietnamese taking advantage of the chance to compete for priviledged positions that Catholics occupied under the French, and there's a "re-balancing" of the local collaborationist elite towards a non-sectarian basis.
But post-kulturkampf I imagine Zentrum would try to revive a pro-Catholic bias to the colonial administration.
Then there's the issue of whether Germany uses Cochinchina and Germany's "men on the spot" in Cochinchina use it as a springboard for expansion as much as the OTL French did.
The Germans could be content with digesting a smaller sphere for awhile, or they could expand with gusto in the 1880s or even earlier.
If similar commercial motives and adventures lead them to expand north at the pace of the French, they could occupy all Indochina by 1885. They might fight a war against China instead of the French. Hainan or Taiwan could be targets of the German fleet staging first from Saigon and then Danang and Haiphong.
Germany in the 1880s will probably be more able to find allies against China than France was. First of all, it had allies (Italy and Austria) who could relish the chance to ride Germany's coat-tails to earn their own treaty ports. Speaking of the Austrians, the German presence in Indochina may lend some impetus to the abortive Austrian enterprise across the sea in Borneo.
Also, in the OTL Franco-Chinese war, the French and Japanese danced around the idea of allying against China. As it turned out they did a cha-cha and early on France wanted it but Japan wasn't sure and later on Japan was more eager but the French less so. Germany with its greater military reputation and more imitation worthy (from a Japanese p.o.v.) domestic institutions might have a much easier time acquiring an alliance with Tokyo early, which would see the Japanese invade Korea at least. Lastly, Germany's "re-insured" and still decent relationship with Russia means there may be a third major anti-Chinese front in Manchuria, Mongolia and Xinjiang.
This add up to a real anti-Chinese dogpile.
Cochinchina would likely not be the lone French colonial cession to Germany if Germany took it in 1870. The Germans would probably want a stopping point or two taken from French possessions on the African coast (Cote D'Ivoire & Djibouti perhaps). They might want or get Tahiti as well. who wouldn't? I see concessions in the western hemisphere as less likely because of the greater odds of complication with the British or US, and the fact that these had been French possessions for a longer period of history.
Pulling back to German Vietnam's development, Vietnamese will have a second culture to European culture to directly borrow from and it would be interesting to see how fast or completely German influences replace French in terms of education, language, science and foodways.