Xi to Meet Vietnam Leader as Hormuz Blockade Risks Energy Flows

Vietnam’s party chief and newly appointed president, To Lam, is set to meet Xi Jinping in China this week, seeking to shore up energy security as the war in Iran raises global supply risks and pushes Hanoi to deepen cooperation with its largest trading partner.Author of the article:You can save this article by registering for free here. Or sign-in if you have an account.(Bloomberg) — Vietnam’s party chief and newly appointed president, To Lam, is set to meet Xi Jinping in China this week, seeking to shore up energy security as the war in Iran raises global supply risks and pushes Hanoi to deepen cooperation with its largest trading partner.Subscribe now to read the latest news in your city and across Canada.Subscribe now to read the latest news in your city and across Canada.Create an account or sign in to continue with your reading experience.Create an account or sign in to continue with your reading experience.Lam is expected to oversee the signing of agreements including a potential aircraft deal between budget carrier VietJet Aviation JSC and Commercial Aircraft Corp. of China Ltd., known as Comac, though it’s unclear whether this would involve purchases or leases, according to people familiar with the matter who asked not to be identified discussing confidential matters. The two countries are also expected to sign pacts on metro construction in Ho Chi Minh City, as well as energy and telecommunications, the people said.“Both sides will seek reassurance that there will be minimal disruption to existing trade and investment cooperation,” said Carl Thayer, professor emeritus at the University of New South Wales, who has written several books on Vietnam. With the Iran war dragging on, “To Lam is highly likely to solicit more Chinese investment in rail connectivity and energy cooperation.”Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Vietjet and Comac did not immediately respond to requests for comment.The visit marks Lam’s first overseas trip since securing the presidency last week, consolidating his grip on power as both head of state and Communist Party General Secretary. While new Vietnamese party chiefs traditionally make China their first foreign stop, the trip was delayed by the leadership transition, with Lam instead visiting the US earlier to maintain ties with Hanoi’s other key economic partner. It comes as China has maintained a measured diplomatic approach in Asia, even as the Iran conflict disrupts global energy flows.China has already offered limited relief, providing about 100,000 barrels of distillate fuels to Vietnam as part of small shipments to Southeast Asia, while it tightens export controls more broadly.Vietnam says it has enough fuel to last through April, though rising costs and disruption risks have already led to canceled flights and long lines at gasoline stations. The country relies heavily on imported oil and gas, and has rolled out contingency measures including tax freezes and a push toward greener energy.Lam is also expected to seek further Chinese investment in infrastructure, particularly rail. When Xi visited Vietnam last year, the two sides expanded cooperation on major rail corridors, including a $7.8 billion line linking the port city of Haiphong to the Chinese border. Additional technical agreements were signed in March, and Chinese firms are already involved in metro projects in Hanoi.Vietnam’s trade with China reached $256 billion last year, up 24.7% from the year before, according to Vietnamese government data, underscoring Vietnam’s reliance on Chinese inputs at the same time as it exports heavily to the US. That balancing act has become more complex amid rising trade tensions, including US scrutiny of transshipment and potential tariffs.“They will look for any advantage to limit the damage during this crisis,” said Adam Farrar, a senior geoeconomics analyst at Bloomberg Economics. “If China wants to give fuel, great, and Vietnam may adjust its relationship to get those things.”Security cooperation is also deepening. Ministers from both countries met in Hanoi last month to discuss border management, crime and data sharing, while companies including Huawei Technologies Co. and Viettel Group have expanded collaboration on next-generation telecoms. One longstanding flashpoint — competing claims in the South China Sea — is unlikely to see progress, despite the fact that Vietnam has accelerated island-building and continues to protest Chinese actions in disputed waters.Still, the two sides are “likely to step up security cooperation between their respective public security ministries involving the transfer of mass surveillance and AI technologies accompanied by related training in China,” said Thayer. —With assistance from Nguyen Dieu Tu Uyen, Nguyen Xuan Quynh, Cao Ban and Danny Lee.Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information.