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A consortium including Huawei was awarded a $23 million contract for 5G equipment in April, weeks after the White House announced tariffs on Vietnamese goods. ZTE has won at least two contracts, one last week, totalling more than $20 million for 5G antennas. The first publicly disclosed deal came in September, a month after U.S. tariffs took effect.

Reuters could not establish whether the timing of these wins was linked to U.S. tariffs, but the deals raised concerns among Western officials.

Huawei and ZTE are banned from U.S. telecom networks as an “unacceptable risk” to national security. Sweden and other European countries have similar restrictions.

Ericsson declined to comment on Chinese companies, but said it was “fully committed to support its customers in Vietnam.”

Neither Huawei, ZTE, Nokia, Qualcomm, the U.S. embassy in Vietnam, China’s embassy, Sweden’s foreign ministry nor Vietnam’s tech ministry responded to requests for comment.

VIETNAM-CHINA TIES WARM

The unaligned Southeast Asian nation is a crucial battleground in the competition for global influence. Its proximity to China has made it a major industrial hub for multinationals such as Apple, Samsung and Nike, which rely on Chinese components and Western consumers.

Under Western pressure, Vietnam long took “a wait-and-see approach” to Chinese technology, said Nguyen Hung, a specialist in supply chains at RMIT University Vietnam. But “Vietnam has its own priorities,” he added, noting the new deals could spur deeper economic integration with China.

Huawei lost multiple bids this year on 5G equipment in Vietnam, according to tender data. But it has cooperated on technical services, and signed an agreement in June on 5G technology transfers with Viettel, Vietnam’s army-owned main telecom operator, according to Vietnam’s defence ministry.

Viettel did not respond to a request for comment. One person at the company said Chinese technology was cheaper. The sources declined to be named because the information they shared was not public.

WESTERN CONCERNS

The Chinese contracts have been discussed in at least two meetings of senior Western officials in Hanoi in recent weeks, diplomatic sources said. In one meeting, a U.S. official warned they could undermine trust in Vietnam’s networks and jeopardise access to U.S. advanced technology.

In a meeting this month officials explored whether areas using Chinese technology could be sealed off from the rest of the network to prevent data leaks, one of the sources said.

But suppliers of antennas and equipment could still gain access to network data, said Innocenzo Genna, a telecommunications lawyer, noting “Western contractors may face the awkward prospect of working alongside firms they do not trust.”

(This story has been corrected to clarify that the named parties did not respond to requests for comment, not that they responded, in paragraph 9)

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