PHOTO: REUTERS/FILE

REUTERS, Hanoi

Chinese firms are expanding in Vietnam, leading investment inflows and sending record shipments to Hanoi in defiance of US calls for decoupling, as the Communist neighbours beef up ties.

Recent steps that Hanoi had long resisted on security grounds include sensitive tech contracts for Chinese telecoms firms Huawei and ZTE; approval of Chinese loans for high-speed rail links; and Chinese-made COMAC planes cleared by regulators for a leading airline.

Hanoi’s overtures to Beijing may reflect its long-standing policy of balancing foreign ties after pledges made to Washington in trade talks, said Alexander Vuving of the Asia Pacific Center for Security Studies.

But if the trend continues, Vietnam “may become a ‘torn country’ rather than a ‘swing state’,” he added, citing risks to Western relations.

While the Southeast Asian nation opened its economy to US multinationals and technology after Washington lifted its embargo in the 1990s, it stayed cautious over China, after their 1979 war and disputes over South China Sea boundaries.

Now Beijing’s influence is rising and US ties are strained by tariffs.

Chinese firms make pledges to transfer technology, rare until now, and increasingly view Vietnam as a consumer market rather than just an assembly base, a Reuters review of data and industry interviews showed.

The shift has been turbocharged by tariffs of 20 percent imposed by Washington, said Phan Xuan Dung, a researcher at the ISEAS-Yusof Ishak Institute in Singapore.

“Vietnamese officials were displeased by what they saw as punitive US measures, and this pushed them to hedge by leaning economically further into China,” he added.

Vietnam’s foreign ministry and the White House did not respond to requests for comment.

China’s foreign ministry said economic cooperation benefits both countries.

RECORD IMPORTS FROM CHINA

Despite US pressure to curb reliance on Chinese technology and components, imports from China stood at about $168 billion through November, up nearly 30 percent on the year and already well above all of 2024, itself a record year, Vietnamese data shows.

Nearly one-third are electronic parts, often re-exported in goods bound for the United States. Consumer imports, including vegetables and cars, are also climbing.

Fading anti-China sentiment among younger Vietnamese is helping drive the surge, dovetailing with Beijing’s push to find new markets amid US tariffs, and emboldening Chinese companies to take on domestic champions.

E-scooter maker Yadea sold more than 36,000 units in Vietnam in the year’s first 10 months, ranking fourth nationwide, according to non-public registration data obtained by Reuters.