UPDATE 5-China's Xi promises closer ties with Vietnam in state visit

Despite their close ties on the economic front, the neighbours have been at odds over boundaries in the South China Sea and have a millennia-long history of conflict. Making his first trip to Vietnam in six years, Xi said the countries would build a community with a "shared future" during a meeting with Vietnam's Communist party leader Nguyen Phu Trong, Chinese state broadcaster CCTV said.

Chinese President Xi Jinping began a two-day visit to Vietnam on Tuesday to upgrade ties between the Communist countries three months after U.S. President Joe Biden travelled to Hanoi, as the major powers vie for influence in the Southeast Asian nation. Despite their close ties on the economic front, the neighbours have been at odds over boundaries in the South China Sea and have a millennia-long history of conflict.

Making his first trip to Vietnam in six years, Xi said the countries would build a community with a "shared future" during a meeting with Vietnam's Communist party leader Nguyen Phu Trong, Chinese state broadcaster CCTV said. The countries' diplomats have debated the term for months, following Hanoi's initial reluctance to use it, say officials and diplomats.

The Chinese phrase literally means "common destiny", but its translation in English and Vietnamese is "common future," which may be seen as less demanding and is expected to figure in a joint statement set to be adopted during Xi's visit. "One declaration, many translations," said a diplomat based in the Vietnamese capital, commenting on the interpretation of the term.

In a statement, Vietnam said the two sides would "work out directions, tasks and measures to consolidate and further develop the Vietnam-China comprehensive strategic partnership". However, the upgrade in ties would just be symbolic, said Le Hong Hiep, a specialist in Vietnamese strategic and political issues at Singapore's Iseas–Yusof Ishak Institute.

"Vietnam's mistrust of China runs deep, and from the Vietnamese people's viewpoint, there is little to no 'shared destiny' between the two countries, as long as China continues to claim most of the South China Sea," he said. "DOZENS" OF DEALS

Beyond taking ties to a level Beijing may see as being above those with the United States, upgraded status would come with the signing of "dozens of co-operation documents," Vietnam's state newspaper Tuoi Tre quoted China's ambassador Xiong Bo as saying before Xi's visit. Deals are expected to include Chinese investments to upgrade rail links between the neighbours, which would include grants, though the volume and terms of possible loans are not clear.

Boosting transport links would allow Vietnam to export more to China, especially farm products, while Beijing wants to further integrate the country's north with its southern supply chain networks. Chinese firms have moved some operations to Vietnam quicker this year than before the COVID-19 pandemic, looking to be closer to Western clients there, lower risks from U.S.-China trade tension, and cut exposure to China's weakened economy.

Stronger rail networks would speed the import of components from China for assembly in Vietnam, effectively expanding China's Belt and Road Initiative (BRI). Xi called for faster co-operation on building infrastructure, in an opinion piece run in the newspaper of the Vietnamese Communist Party ahead of his visit.

China has pushed to include Vietnam in its Digital Silk Road, which may entail investments for new undersea optical fibre cables, the 5G network and other telecoms infrastructure. Although the Hanoi metro is Vietnam's only project to have received BRI loans, it has not been labelled as such in a country where anti-Chinese sentiment is still widespread enough that such moves could be viewed as getting too close to Beijing.

Xi urged wider cooperation on security, connectivity, green energy and critical minerals, about the rare earth, of which China is the world's leading refiner while Vietnam has the second largest estimated reserves after its neighbour.

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