Factbox: China, Airbus among potential losers from boosted US-Vietnam ties

AES

13/09/2023 02:59

Sept 12 (Reuters) - The United States and Vietnam agreed
on Sunday to upgrade their diplomatic relations in a historic
step for the two former foes, paving the way for business deals
and possible new investment. But for every winner there is often
a loser.
    These nations, companies and groups are unlikely to benefit
from closer relations between Washington and Hanoi:
    
    CHINA
    Vietnam has been careful to stress that its elevated ties
with Washington would not upset relations with Beijing, fearing
a backlash from China. 
    But Washington's elevation to the same tier as Beijing in
Vietnam's ranking will inevitably have an impact on China.
    Beijing could lose business deals, especially in the
semiconductors field, where Washington pledged to boost
Vietnam's industry with the explicit goal of reducing the
sector's exposure to China-related risks.
    "China believes that the development of bilateral relations
between countries cannot target third parties," China's foreign
affairs ministry spokesperson Mao Ning said on Monday, urging
the U.S. to "abandon hegemony and Cold War thinking".
    
    RUSSIA
    Vietnam is a close partner of Russia and one of the top
importers of its weapons, which are estimated to comprise about
80% of the Southeast Asian country's arsenal.
    The White House had no new arms deals to announce, but the
new ties may facilitate future supplies from the U.S. or its
partners.
    That would inevitably reduce Vietnam's reliance on Russian
gear, although Hanoi is currently negotiating a new possible
arms deal with Moscow.
    
    AIRBUS
    During U.S. President Joe Biden's visit to Hanoi, U.S.
planemaker Boeing  BA.N  agreed to sell 50 of its 737 MAX jets
to flag carrier Vietnam Airlines  HVN.HM .
    The Vietnamese company currently operates narrowbody jets
from Airbus  AIR.PA , Boeing's direct rival.
    The deal marked what is known in the industry as a "flip" -
when either Boeing or Airbus poach a customer from each other,
especially in the ultra-competitive narrowbody market. 
    Such defections are relatively rare because of the expense
of introducing new pilot training and spare parts, as well as
the complexity of switching to a new fleet. 
    "We do not have any comment on a decision that does not
involve Airbus," an Airbus spokesperson said. "However, Vietnam
Airlines is an important customer and we look forward to
building further on our long-standing partnership."
    
    HUMAN RIGHTS
    The White House fact sheet issued during Biden's visit
weighed in at over 2,600 words. The section on human rights
contained just 112 words, including a sub-heading.
    "The Biden administration is clearly sidelining human rights
in the interest of advancing partnerships with governments it
sees as strategically important," said Carolyn Nash, Asia
advocacy director at Amnesty International.
    Vietnam holds at least 159 political prisoners and at least
22 others were in detention pending eventual trial before a
court controlled by the ruling Communist Party, Human Rights
Watch said.
    The two countries agreed on Sunday on "enhanced commitment
to meaningful dialogue".
    
    MALAYSIA AND INDIA
    Washington has agreed to significantly boost support to
Vietnam's chip and artificial intelligence industry, announcing
new investments from U.S. companies, including a $1.6 billion
semiconductors factory to be built by Amkor, and partnerships
between U.S. AI giants Nvidia  NVDA.O  and Microsoft  MSFT.O 
and Vietnamese companies.
    That could affect Malaysia and India, Vietnam's top rivals
among emerging Asian nations in semiconductors and AI,
respectively.
    
    AES AND SIEMENS
    Among the deals announced by the White House was a
partnership between solar company AMI and U.S. conglomerate
Honeywell  HON.O  to launch "Vietnam's first ever battery energy
storage system". 
    That may have not pleased Fluence  FLNC.O , a Nasdaq-listed
company whose parent organisations are U.S. energy firm AES
 AES.N  and Germany's Siemens  SIEGn.DE  that produces battery
energy storage systems in Vietnam through a supplier. 
    At the moment, its Vietnam output is exported.
    Fluence and Siemens did not reply to requests for comment.
AES did not comment.   

 (Compiled by Francesco Guarascio in Hanoi and Tim Hepher in
Paris; Editing by Jamie Freed)
 ((Francesco.Guarascio@thomsonreuters.com;))