Chinese companies are deepening their presence in Vietnam, leading investment inflows and sending record shipments to Hanoi despite Washington’s calls for economic decoupling. The two communist neighbours are strengthening cooperation across technology, transport, and manufacturing.
Hanoi has recently approved several projects it once resisted on security grounds, including contracts with Chinese telecoms firms Huawei and ZTE, loans for high-speed rail projects, and clearance for Chinese-made COMAC aircraft to operate with a leading Vietnamese airline.
According to Alexander Vuving of the Asia Pacific Center for Security Studies, Vietnam’s overtures to Beijing reflect a balancing act after trade pledges made to Washington. However, he warned that if this trend continues, Vietnam “may become a ‘torn country’ rather than a ‘swing state’,” risking its ties with Western partners.
Trade Shifts and Technology Transfers
After decades of cautious engagement following the 1979 border war and maritime disputes, Vietnam is now drawing closer to China as U.S. tariffs strain their trade relations. Chinese firms are offering rare technology transfer deals and increasingly view Vietnam as a consumer market rather than merely a manufacturing hub, according to a Reuters review of industry data and interviews.
This trend has accelerated since Washington imposed 20% tariffs on Vietnamese exports. “Vietnamese officials were displeased by what they saw as punitive U.S. measures, and this pushed them to hedge by leaning economically further into China,” said Phan Xuan Dung of the ISEAS-Yusof Ishak Institute in Singapore.
Record Imports and Rising Consumer Demand
Despite U.S. pressure to limit Chinese technology, Vietnam’s imports from China reached around $168 billion by November—up nearly 30% year-on-year and surpassing all of 2024, already a record year. Electronics make up nearly one-third of the imports, much of which are re-exported in goods bound for the U.S., while consumer goods like vegetables and vehicles are also climbing.
Diminishing anti-China sentiment among younger Vietnamese has reinforced this shift. E-scooter maker Yadea sold over 36,000 units in the first ten months of the year, ranking fourth nationwide and emerging as a key rival to domestic EV leader VinFast. BYD, another Chinese electric vehicle giant, is also expanding its dealer and charging network across Vietnam.
Meanwhile, Chinese retail and technology brands are growing rapidly. Real estate agency CBRE noted the expansion of chains such as KKV in Ho Chi Minh City and Hanoi. TikTok, owned by ByteDance, has become Vietnam’s leading shopping platform, while Alibaba’s Lazada and Tencent-backed Shopee and Tiki dominate e-commerce.
Long-Term Investment and Industrial Integration
Chinese investment in Vietnam has been building steadily, but a new phase of joint ventures and technology-sharing has begun. Steve Bui, chairman of the Vietnam China Business Council, said that 12 Chinese companies have either transferred or plan to transfer technology to Vietnamese partners this year, compared with none in 2024.
One such venture involves CNTE, backed by battery maker CATL, which partnered with Delta E&C to establish a factory in northern Vietnam producing battery energy storage systems for export by 2026. Official data shows that from January to November, Chinese and Hong Kong firms pledged over $6.7 billion, making them Vietnam’s largest investors.
At the DEEP C industrial park in northern Vietnam, Chinese manufacturers now represent a quarter of all tenants, up from just 10% in 2019. “What started as tariff hedging has evolved into a strategy focused on both insurance and growth,” said Dan Martin of consultancy Dezan Shira. He added that the growing scale and diversity of Chinese projects “is reshaping Vietnam’s industrial landscape.”
(with inputs from Reuters)
