Vietnam’s decision to award new 5G contracts to Huawei and ZTE marks a significant strategic shift shaped by trade pressures, geopolitical recalibration and domestic economic priorities. After years of hesitance toward integrating Chinese technology into sensitive digital infrastructure, Hanoi is now moving toward deeper cooperation with Chinese telecom firms. The change follows deteriorating trade conditions with the United States and a parallel warming of relations with Beijing, creating a new operating environment in which Chinese vendors are increasingly competitive. The deals illuminate how trade policies, regional diplomacy and technology security considerations are intersecting to reshape Vietnam’s telecommunications landscape.

Why Vietnam Is Reassessing Its Technology Alignment

For most of the past decade, Vietnam adopted a cautious stance toward Chinese telecommunications firms, concerned about the security implications of relying on technology from its powerful northern neighbor. This reluctance was reinforced by strong U.S. pressure: Washington had long urged partners to avoid using Chinese telecom equipment, especially in 5G networks, citing security risks and potential vulnerabilities. Vietnam—positioned between major geopolitical powers and economically dependent on Western markets—often aligned with these concerns.

However, recent trade developments have altered Hanoi’s incentives. The United States imposed new tariffs on several categories of Vietnamese exports, weakening what had been a rapidly growing economic partnership. For Vietnam, the tariffs are more than a commercial setback; they signal a cooling relationship with Washington at a time when the country is seeking predictable access to global markets. As its export sector absorbs the impact of higher U.S. trade barriers, Vietnam is reassessing how to balance relations with both major powers.

At the same time, China has intensified diplomatic outreach to Vietnam. High-level visits, expanded economic dialogue and the revival of cross-border development initiatives have contributed to a substantial warming of ties. Beijing has presented itself as a stable and committed partner at a moment when Vietnam faces new uncertainties abroad. Against this backdrop, cooperation in the technology sector — once considered strategically sensitive — is becoming more acceptable to Hanoi.

These shifts help explain why Chinese telecom companies, once sidelined, are increasingly winning tenders in Vietnam’s rapidly expanding 5G market. The decisions reflect not only commercial factors but also a broader recalibration of Vietnam’s external relationships.

How Huawei and ZTE Are Positioning Themselves in Vietnam’s 5G Build-Out

Vietnam’s 5G rollout involves multiple layers of infrastructure, and Western companies still maintain a strong foothold in core network systems. Ericsson, Nokia and Qualcomm hold the most strategically sensitive contracts, supplying backbone equipment critical to national security.

Yet Huawei and ZTE are now capturing a growing share of peripheral but essential contracts. Their wins include equipment for radio networks, antennas and supporting components that form the physical layer of 5G connectivity. These tenders, while smaller than core-infrastructure projects, are significant because they shape long-term vendor relationships and determine future upgrade cycles.

In April, a consortium featuring Huawei secured a major contract worth tens of millions of dollars. ZTE has also gained momentum, winning multiple antenna and equipment contracts over the past year. The timing of these deals — coming immediately after new U.S. tariffs on Vietnamese exports — has drawn attention, although no direct link has been confirmed. Still, the sequence of events underscores how geopolitical pressures can shift commercial outcomes.

Cost competitiveness plays a decisive role. State-owned telecom operators in Vietnam face pressure to expand 5G coverage rapidly while minimizing financial strain. Chinese equipment is often cheaper than Western alternatives, a factor that carries substantial weight in procurement decisions. Huawei’s and ZTE’s willingness to offer technical support, technology transfer agreements, and favorable financing terms further strengthens their bids.

Vietnamese operators are also exploring deeper industrial cooperation with Chinese firms. Viettel, the country’s largest telecom operator and a company owned by the military, has engaged Huawei on technical services and signed agreements on potential technology transfers. These moves signal not only commercial collaboration but also a strategic decision to diversify suppliers in a market where demand for 5G capacity is accelerating.

China–Vietnam Diplomatic Warming and Its Impact on Technology Choices

Vietnam’s evolving position cannot be understood without considering the broader geopolitical environment in Southeast Asia. For decades, Vietnam has carefully balanced its relationship with China — a critical economic partner but also a maritime rival — with its ties to the United States and other Western nations. This delicate posture gave Vietnam strategic flexibility but required maintaining distance from China in high-security domains.

In the past year, however, diplomatic momentum has shifted. Beijing and Hanoi have revived discussions on major infrastructure projects, including rail lines and border economic zones that Vietnam had previously shelved due to security concerns. Dialogue channels have expanded, cooperation frameworks have been updated, and high-level exchanges have signaled mutual interest in deeper integration.

Vietnam’s growth model depends on access to global supply chains and international investment. With China remaining Vietnam’s largest trading partner and an indispensable source of industrial inputs, strengthening ties helps secure Vietnam’s role in manufacturing networks that span East Asia. Closer cooperation also aligns with China’s broader regional strategy to consolidate influence in mainland Southeast Asia.

This geopolitical warming reduces the political cost of accepting Chinese telecommunications companies into Vietnam’s digital infrastructure. While security concerns remain, Hanoi is increasingly willing to weigh them against economic benefits, bilateral cooperation and long-term industrial goals. For China, each new contract represents not only commercial expansion but also expanded strategic influence in a pivotal Southeast Asian economy.

Growing Tension with Western Partners Over Security Implications

Vietnam’s renewed openness to Chinese 5G vendors has triggered concern among Western governments. The United States and several European countries maintain stringent restrictions on Huawei and ZTE, labeling them national security risks. This designation has shaped global policy debates around data protection, critical infrastructure and sovereignty. For Washington, ensuring that allied or partner countries keep Chinese vendors out of sensitive networks is a key pillar of its broader technology strategy.

Western officials in Hanoi have expressed unease about Vietnam’s procurement decisions, warning that Chinese participation could complicate cooperation in advanced technologies. For example, U.S. agencies have previously indicated that access to certain American technologies or cyber-cooperation programs could be limited if partners integrate equipment from vendors the U.S. deems untrustworthy. These concerns are now resurfacing as Vietnam’s 5G supply chain evolves.

Discussions among Western diplomats in recent weeks reflect an effort to understand whether Vietnam plans to segment its networks — isolating areas that use Chinese equipment from those expected to maintain high security standards. However, telecom experts note that even peripheral equipment suppliers can gain indirect exposure to network data, raising concerns about potential vulnerabilities. The prospect of Western firms working alongside Chinese vendors in the same network environment creates additional complications.

Despite these tensions, Vietnam appears intent on diversifying its technology suppliers. While Hanoi values its relationship with Washington, it also seeks strategic autonomy and flexibility in navigating global competition. Allowing Chinese vendors into portions of its 5G rollout demonstrates that Vietnam is charting its own course, balancing economic needs with geopolitical realities.

Why Vietnam’s 5G Decisions Reflect a Larger Strategic Repositioning

Vietnam’s embrace of Huawei and ZTE signals more than a series of procurement choices; it represents a deeper shift in how the country views technological sovereignty, economic strategy and geopolitical alignment. The combination of U.S. tariffs, China’s diplomatic courtship and domestic economic priorities has created conditions in which Chinese technology can regain ground in Vietnam.

The country is positioning itself to benefit from both Western and Chinese economic systems. As one of the world’s emerging manufacturing hubs, Vietnam requires robust 5G infrastructure to support new industries, logistics networks, smart factories and digital services. Cheap and widely available Chinese equipment accelerates this rollout, enabling rapid expansion at a lower cost.

At the same time, Vietnam seeks to avoid overdependence on any single partner. Its telecommunications strategy reflects this balancing act: Western firms supply core infrastructure, while Chinese firms expand in supporting layers. This dual-track approach gives Vietnam leverage in negotiations with both sides while building resilient, diversified infrastructure.

In the broader geopolitical landscape, Vietnam’s decisions highlight how middle powers are adapting to great-power competition. Rather than choosing sides, Hanoi is optimizing for economic advantage, technological progress and strategic autonomy — even when doing so complicates its relations with major players.

(Adapted from Reuters.com)