China’s major telecom companies Huawei and ZTE have secured several contracts this year to supply 5G equipment in Vietnam, signaling a noticeable warming in relations between Hanoi and Beijing. The shift has worried Western officials, according to seven sources familiar with the matter who spoke to Reuters.
For years, Vietnam appeared cautious about using Chinese technology in critical infrastructure. But recent months have shown a change in direction as relations with China improve, while ties with Washington have grown strained due to U.S. tariffs on Vietnamese goods.
Chinese Companies Gain Ground in Vietnam’s 5G Market
Although Sweden’s Ericsson and Finland’s Nokia won contracts for Vietnam’s core 5G infrastructure, and U.S. firm Qualcomm is supplying network components, Chinese vendors have recently won several smaller tenders with state-owned telecom operators, public procurement documents show.
A consortium that included Huawei secured a $23 million contract for 5G equipment in April—just weeks after the White House announced new tariffs on Vietnamese exports.
ZTE has won at least two additional contracts for 5G antennas worth more than $20 million, with the first publicly revealed deal occurring in September, a month after the tariffs took effect.
Reuters could not confirm whether the timing of these deals was directly linked to U.S. tariffs. However, the developments have raised concern among Western governments.
Washington has long considered the exclusion of Chinese firms from Vietnam’s digital infrastructure—especially undersea cables—a key requirement before offering advanced technology support.
Huawei and ZTE remain banned from U.S. telecom networks on national security grounds, and similar restrictions exist across parts of Europe.
Ericsson, while declining to comment on Chinese competitors, said it remained committed to supporting customers in Vietnam. Sweden’s foreign ministry emphasized the need for “secure and trusted networks,” especially as societies become increasingly digital.
None of the firms involved—Huawei, ZTE, Nokia, Qualcomm—nor the U.S. and Chinese embassies or Vietnam’s technology ministry responded to requests for comment.
Vietnam’s Growing Alignment with China
Vietnam occupies a central position in the geopolitical competition for global influence. Its proximity to China makes it a key manufacturing hub for Apple, Samsung, Nike and other international companies that rely on Chinese supply chains while serving Western markets.
Historically, Vietnam adopted a cautious stance toward Chinese technology, said Nguyen Hung, a supply chain expert at RMIT University. But he noted that Hanoi now appears to be prioritizing its own economic needs, and these 5G deals could accelerate deeper integration with China.
The two countries have recently advanced other sensitive joint projects, including cross-border rail lines and special economic zones near their shared border—initiatives Vietnam previously avoided over security concerns.
Although Huawei lost several 5G bids earlier this year, it continues to collaborate with Vietnamese partners. In June, it signed an agreement on 5G technology transfer with Viettel, the military-owned telecom giant, according to Vietnam’s defense ministry.
A Viettel employee, speaking anonymously, said Chinese equipment remained cheaper than Western alternatives.
Western Nations Raise Security Concerns
Chinese telecom contracts have been discussed at multiple high-level meetings among Western officials in Hanoi, diplomatic sources said. In one meeting, a U.S. official warned that the deals could undermine trust in Vietnam’s networks and potentially affect the country’s access to U.S. advanced technologies.
Another meeting explored whether areas of Vietnam’s network using Chinese hardware could be isolated to protect sensitive data. But telecom experts warn that suppliers with access to antennas and other equipment could still retrieve network information.
Telecommunications lawyer Innocenzo Genna said Western companies may now face “the awkward prospect of working alongside firms they do not trust.”