【By Observer News Network, Xiong Chaoran】"Huawei and ZTE have signed 5G agreements in Vietnam, at a time when Vietnam is facing U.S. tariffs and its relations with China are warming up."

On November 28 local time, Reuters cited seven sources exclusively reported that Chinese telecommunications companies Huawei and ZTE have won a series of contracts to supply 5G equipment in Vietnam this year, and the media has been hyping up, indicating again that Sino-Vietnamese relations are increasingly close, causing concern among Western officials.

The report said that for many years, Vietnam was considered reluctant to use Chinese technology in sensitive infrastructure, but in recent months, as relations with China have warmed up, while relations with the U.S. have deteriorated due to tariffs, Vietnam has begun to accept Chinese tech companies.

Although Ericsson from Sweden and Nokia from Finland have secured contracts for Vietnam's 5G core infrastructure, and American chipmaker Qualcomm provided network equipment, previously unreported procurement data shows that Chinese companies have already started winning bidding projects in small-scale tenders at local state-owned operators.

By April this year, a consortium including Huawei won a $23 million contract for 5G equipment, while just weeks earlier, the White House had just announced new tariffs on Vietnamese goods. ZTE also won at least two contracts, one of which was reached just last week, with a total value exceeding $20 million, mainly used for producing 5G antennas. The first publicly disclosed transaction this year appeared in September, one month after the U.S. tariffs took effect.

Although the Reuters report began by hyping up, it then added that "it is unclear whether the timing of these contracts is related to U.S. tariffs," but the report still emphasized that these transactions have raised concerns among Western officials.

Huawei expands its data center product business in Vietnam, and the company's operations in Vietnam also include solar energy, consumer electronics, and telecommunications. Photo.

According to the report, for a long time, the United States has threatened that excluding Chinese contractors from Vietnam's digital infrastructure (including undersea cables) is a key condition for its support in advanced technologies.

For example, Reuters cited more than a dozen insider sources exclusively in September of last year, stating that the U.S. was urging Vietnam to avoid working with China's Hua Hai Communication (HMN Tech) and other Chinese companies in its plan to build 10 new undersea cables by 2030.

According to sources, to achieve this goal, U.S. officials not only shared intelligence about the so-called risk of Vietnam's undersea cables being damaged, but also "threatened" that choosing Chinese companies could hinder U.S. companies' investments in Vietnam. However, an official who attended the meeting at the time frankly said, "This was a very difficult lobbying effort."

For some time now, Huawei and ZTE have been banned from entering the U.S. telecom network, viewed as posing so-called "unacceptable risks" to national security, and some European countries have followed suit, implementing similar unreasonable restrictions.

Bidding data shows that Huawei has lost out in several 5G equipment bids in Vietnam this year, but it has continued to cooperate in technical services. According to the Vietnamese Ministry of Defense, Huawei also signed a 5G technology transfer agreement with Viettel, the main telecom operator controlled by the Vietnamese military, in June this year.

Reuters pointed out that Vietnam is a so-called "non-aligned" Southeast Asian country and a key battlefield in the global influence struggle. Due to its proximity to China, Vietnam has become an important manufacturing hub for multinational companies such as Apple, Samsung, and Nike, and these companies rely on Chinese components and Western consumers.

Nguyen Hung, a supply chain expert at RMIT University Vietnam Branch, said that under Western pressure, Vietnam has long taken a so-called "wait-and-see" attitude toward Chinese technology, but he added, "Vietnam also has its own priorities," and the newly concluded agreements may promote deeper economic integration between Vietnam and China.

In August last year, General Secretary of the Communist Party of Vietnam, President To Lam, made a state visit to China, with the interoperability of the China-Vietnam railway being a key topic of the visit. In April this year, the China-Vietnam railway cooperation mechanism was officially launched.

Reuters pointed out that projects including cross-border railways and establishing special economic zones near the Chinese border, which Vietnam had previously hesitated on due to so-called security risks, have recently seen progress in China-Vietnam cooperation.

Diplomatic sources revealed that in the past few weeks, senior Western officials have discussed contracts involving China in at least two meetings held in Hanoi. During one of these meetings, an American official repeated the same tactics, warning that these contracts might damage people's trust in Vietnam's networks and endanger Vietnam's access to U.S. advanced technologies.

Another source said that during a meeting this month, Western officials even hyped up the idea of isolating regions using Chinese technology from other parts of the network to prevent so-called data leaks.

Innocenzo Genna, a telecommunications industry lawyer, implied that the supplier of antennas and equipment could still access network data, and pointed out, "Western contractors may face the awkward situation of having to work with companies they don't trust."

Previously, according to a report by Bloomberg on November 10, the European Commission is currently exploring various means to force member states to remove Huawei and ZTE equipment from telecom networks, even considering pressuring non-EU countries, such as stopping financing for projects that use Huawei equipment.

However, analysts point out that banning specific suppliers may trigger political conflicts, as countries have long refused to hand over decision-making power regarding Huawei-related issues to the European Commission. Telecommunications operators would also oppose such restrictions because Huawei's technology offers better cost-effectiveness compared to Western counterparts.

A source who did not wish to be named revealed that the European Commission's Executive Vice President Hannah Wilkkuinen, responsible for technological sovereignty, hopes to upgrade the 2020 recommendation to stop using "high-risk suppliers" in mobile networks into a legally binding mandatory regulation.

Although the decision-making power over telecommunications infrastructure lies with individual member states, Wilkkuinen's proposal would force member states to follow the Commission's security guidelines. If this recommendation becomes a legally binding clause, member states that fail to comply may face lawsuits and economic penalties.

Huawei sign in Madrid, Spain. Photo.

On November 11, Lin Jian, spokesperson for the Chinese Foreign Ministry, stated that Chinese companies have long operated lawfully and in compliance in Europe, providing high-quality products and services to the EU, and making positive contributions to local socio-economic development and employment. It seriously violates market principles and fair competition rules to forcibly restrict or prohibit companies from participating in the market through administrative measures without legal basis or factual evidence.

Lin Jian pointed out that the facts prove that forcing out the high-quality and safe equipment of Chinese telecom companies not only hinders their own technological development process, but also causes massive economic losses. Weaponizing trade issues and politicizing them will hinder technological progress and economic development, which is detrimental to both parties. We urge the EU to provide Chinese companies with a fair, transparent, and non-discriminatory business environment and avoid undermining the confidence of enterprises investing in Europe.

"The U.S. government is deliberately smearing and suppressing Chinese and information and communication companies around the world, aiming to create a U.S.-led global surveillance network with no rivals and no oversight, opening the door for it to eavesdrop and spy freely," former Chinese Foreign Ministry Spokesperson Mao Ning said in response to related issues. "We advise the U.S. government, which is obsessed with maintaining its network information hegemony, to reflect on itself, stop maliciously slandering Chinese companies, and stop this farce of crying wolf!"

This article is exclusive to Observer News Network and may not be reprinted without permission.

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