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China, Vietnam hail upgrade of ties; sign deals on rail links, data

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China, Vietnam hail upgrade of ties; sign deals on rail links, data
Reuters
Francesco Guarascio, Khanh Vu and Minh Nguyen
December 12, 2023

By Francesco Guarascio, Khanh Vu and Minh Nguyen

HANOI (Reuters) - The leaders of China and Vietnam hailed as "strategic" on Wednesday their decision to strengthen ties and be part of a community with a "shared future", as a visit by Chinese President Xi Jinping entered its second and final day.

During the trip, Xi's first this year to an Asian nation, the Communist-ruled neighbours, close in economic areas but at odds over the South China Sea, signed dozens of co-operation pacts, following months of talks on how best to describe ties.

The two sides "announced the establishment of a strategic China-Vietnam community of 'shared future' to promote the upgrading of China-Vietnam relations," Xi told the chairman of Vietnam's parliament, Vuong Dinh Hue, at a meeting on Wednesday.

In his meeting with Xi, Prime Minister Pham Minh Chinh called the decision "a historically important milestone", adding that being part of a community with a shared future was a "strategic" choice.

In Chinese, the "shared future" phrasing makes use of a word that means "destiny" but which is translated in Vietnamese and English as the more prosaic "future".

As China and the United States vie for influence in the strategic nation, the pacts mark an achievement for Vietnam's diplomacy, although analysts and diplomats said the improvement in relations could be more symbolic than real.

Xi has pushed hard for the upgrade in ties, especially after Vietnam elevated the United States in September to the highest tier of its diplomatic ranking, the same as China's.

His visit to Vietnam, only his fourth overseas this year after trips to Russia, South Africa and the United States, shows the importance he attributes to the country, which is home to a growing number of Chinese manufacturers.

DATA CO-OPERATION, RARE EARTHS

The co-operation pacts cover possible investments in rail links and security, as well as three on telecoms and "digital data co-operation", a list from Vietnamese authorities showed.

Details of the deals have not been made public, but experts and diplomats said digital economy pacts could pave the way for Chinese support to build a 5G network in Vietnam and investments in undersea infrastructure.

The deals reflect the interests of both sides, with China having recently built an undersea data centre off its southern island of Hainan, while Vietnam wants to develop its infrastructure, said Hung Nguyen, a specialist in supply chain issues at RMIT University Vietnam.

Telecoms infrastructure, satellite ground tracking stations and data centres could be key areas for investment, he added.

But some significant items did not find mention in the long list of deals signed.

No deal was unveiled on rare earths, for example, although Xi, in an opinion piece carried in a Vietnamese state newspaper, had urged broader co-operation on critical minerals.

This becomes significant as Vietnam is estimated to have the world's second largest deposits after China, with its biggest mines situated in an area where the rail network is set to benefit from this week's deals.

China dominates the supply of the minerals crucial for electric vehicles and wind turbines, and is usually loath to share its technology.

Vietnam has strict rules on the export of rare earth ores, which it wants to process at home, but often lacks the technology to do so.

(Reporting by Francesco Guarascio, Minh Nguyen and Khanh Vu in Hanoi, and Beijing newsroom; Editing by Gerry Doyle and Clarence Fernandez)

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