Vietnam’s Growing Shift Toward Huawei and ZTE in the 5G Race

Vietnam is emerging as a critical battleground in the global 5G race, with state-owned telecom operators increasingly turning to Chinese tech giants Huawei and ZTE for equipment. This represents a pivotal shift in Vietnam’s approach, which previously avoided using Chinese-made technology in its sensitive networks due to security concerns raised by Western nations. New procurement deals have surfaced, including a $23 million Huawei contract signed in April and multiple antenna contracts with ZTE valued at over $20 million. These moves have sparked significant concern among Western countries, highlighting geopolitical tensions in the pursuit of innovative networking technologies.

Western Concerns Over Security and Strategic Alignment

For years, the United States has urged Vietnam to exclude Chinese vendors like Huawei and ZTE from its telecommunications infrastructure, citing national security risks. These companies are banned from US networks, and several European countries, including Sweden, have implemented similar restrictions. Newly announced tariffs on Vietnamese goods by the US may have influenced Hanoi’s decision to pursue contracts with Chinese suppliers, as Vietnam seeks to balance its diplomatic and trade relationships. However, Western officials now fear these partnerships could compromise the integrity of Vietnam’s networks and limit collaboration on advanced technology initiatives.

Cost Advantage and Strategic Independence

Despite the geopolitical risks, cost savings appear to be a major factor in Vietnam’s willingness to engage with Chinese technology providers. Viettel, a military-operated telecom giant, has entered a 5G technology transfer agreement with Huawei, citing affordability as one of the main drivers for its decision. While Vietnam strives to maintain its strategic independence and avoid formal alliances, experts suggest the recent contracts may deepen the country’s economic and technological ties to China. Moreover, Vietnam has taken on other sensitive projects with Beijing, such as cross-border railways and special economic zones, which signal a steady warming of relations.

The Implications for Vietnam’s Role in the Global Telecom Market

Vietnam’s partnerships with Chinese companies present new challenges for Western contractors like Ericsson, Nokia, and Qualcomm, which currently dominate Vietnam’s critical 5G core systems. Recent discussions among diplomatic circles in Hanoi suggest that senior officials are exploring ways to maximize network security, including proposals to segment Chinese-supplied equipment in specific network areas to minimize data exposure risks. Nevertheless, experts argue that such measures may not completely eliminate vulnerabilities. As Vietnam navigates its role as a key manufacturing hub for Western technology giants like Apple and Samsung, its telecom decisions will remain under intense scrutiny from global stakeholders.

Ultimately, Vietnam’s turn toward Huawei and ZTE reflects broader strategic priorities, rather than merely a response to external pressures. While the deals bolster its digital infrastructure, they also highlight the precarious balancing act the country must maintain amid international competition for technological dominance.