US Urges Vietnam to Avoid Chinese Cable Firms

By Francesco Guarascio, Phuong Nguyen, and Joe Brock, Reuters
September 18, 2024

HANOI, Sept 18 (Reuters) – The United States is urging Vietnam to avoid Chinese cable-laying firm HMN Technologies and other Chinese companies in its plans to build 10 new undersea cables by 2030, sources with knowledge of the talks said.

Vietnam's five major ageing subsea connections that link it to the global internet have suffered repeated failures, making new cables a top government priority.

Since January, U.S. officials and companies have held at least a half-dozen meetings with Vietnamese and foreign officials and business executives to discuss the Southeast Asian nation's cable strategy, according to seven people involved in or briefed about the talks.

“It is a very hard lobbying,” said one official who attended the meetings.

U.S. officials have also separately shared intelligence about possible sabotage of the country's subsea cables, said five people. Reuters spoke to 12 sources for this article, including Vietnamese officials, foreign diplomats and industry executives. All declined to be identified because of the sensitivity of the matter.

The U.S. and China are vying for influence in Vietnam, with both U.S. President Joe Biden and his counterpart Xi Jinping visiting last year and corporations from both countries investing heavily in Vietnam. Vietnam and China have openly discussed boosting digital “interconnections”.

At the same time, subsea cables, which carry much of the world's data, have become central to the U.S.-Sino tech war and Washington, fearful of espionage by Beijing, has previously successfully lobbied to have HMN Tech excluded from another project, a Reuters investigation showed.

APTelecom, a little-known consultancy, has been part of the talks to persuade Hanoi, five of the people said. The meetings and APTelecom's role in them have not been previously reported.

HMN Tech and APTelecom did not respond to multiple requests for comment.

The White House declined to comment. Vietnam's ministries of information and technology did not respond to requests for comment. China's foreign ministry said the U.S. campaign “blatantly violated international rules and business operation models”.

OPEN TO CHINA

Vietnamese authorities and state companies have so far shown openness towards working with China on cables, five of the sources said.

The meetings aim to convince Communist-ruled Vietnam that in the cable-laying industry, which relies on only four players globally, relative newcomer HMN Tech would be a poor choice, according to four people.

U.S. officials and APTelecom have made it clear that choosing cable contractors with less experience and with less access to critical components would discourage U.S. companies from investing in Vietnam, two people who attended the meetings said.

“They clearly singled HMN out” in the meetings, said one of the people who attended.

Washington considers HMN Tech an affiliate of Chinese tech giant Huawei and both are under U.S. sanctions over concerns that they are a threat to national security – a charge that Huawei has denied. HMN Tech has said it is an independent company.