Hanoi’s New Digital Shift: Huawei and ZTE Secure 5G Deals Amid Shifting Geopolitical Winds
A quiet but significant change is underway in Vietnam’s fast-moving telecommunications sector, signaling a potential shift in Hanoi’s diplomatic priorities. Chinese technology heavyweights Huawei and ZTE have recently secured a string of contracts to supply 5G equipment to Vietnam’s state-owned telecom operators, a move that is turning heads in Western capitals.
For years, Vietnam had maintained a cautious distance from using Chinese technology in its most sensitive infrastructure, a stance that seemed aligned with US security concerns. However, the new deals mark a clear embrace of Chinese vendors, occurring at the same time relations between Hanoi and Beijing appear to be strengthening. This warming of ties is set against a backdrop of increasing trade friction between Vietnam and the United States, particularly concerning newly implemented US tariffs on Vietnamese goods.
The Telecommunications Balance
The contracts are not for the highly sensitive “core” of Vietnam’s next-generation network, which has been primarily secured by European rivals like Sweden’s Ericsson and Finland’s Nokia. Instead, the Chinese firms are winning key accessory roles. A consortium that includes Huawei, for example, was awarded a $23 million contract for 5G equipment in April. Separately, ZTE has landed at least two contracts for 5G antennas, totaling more than $20 million.
The timing is particularly noteworthy. The Huawei-linked contract was announced just weeks after the White House introduced new tariffs on certain Vietnamese imports, with the first publicly disclosed ZTE deal following a month later. While experts have not directly linked the tech deals to the tariffs, the confluence of events raises concerns among Western officials who view the exclusion of Chinese contractors as a key security measure.
The new US tariffs, which include a 20 percent rate on imports from Vietnam, have been described as creating a climate of uncertainty for Vietnam’s crucial tech manufacturing sector. Companies like Foxconn and Samsung have reportedly reconsidered or paused new investments and expansion plans in the country, suggesting a tangible economic fallout.
Vietnam’s 5G Ambition
Despite the geopolitical currents, Vietnam’s core focus remains fixed on its aggressive digital transformation agenda. The government has set an ambitious target for full nationwide 5G coverage by 2030, a goal that requires massive investment in infrastructure.
The nation’s three major state-owned carriers—Viettel, VNPT, and MobiFone—have been tasked with rolling out the network. Viettel, the military-run carrier, is pushing hard, aiming to install 20,000 new 5G base stations this year alone. Even as Ericsson and Nokia supply much of the core technology, Chinese giants are making inroads elsewhere. Huawei, for example, signed a technology transfer agreement with Viettel in June to cooperate on 5G advancement.
This “bamboo diplomacy,” as Hanoi’s flexible foreign policy is sometimes called, allows Vietnam to selectively partner with multiple global players based on its own economic and technological needs. By opening the door to Huawei and ZTE for non-core equipment, Vietnam gains access to potentially lower-cost gear, helping to accelerate its nationwide 5G rollout and deepen economic integration with its northern neighbor. For Hanoi, the priority is clear: achieving its digital goals, even if it means navigating a complex and increasingly sensitive geopolitical landscape.