14/04/2026

BIZ & FINANCE TUESDAY | APR 14, 2026

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China model gains appeal in Vietnam

HANOI: Vietnam is increasingly edging closer to China’s model of governance, tightening state control while embracing Chinese technology and regulation as its most powerful leader in decades heads to Beijing this week, according to internal documents, public policy plans and sources. The two Communist neighbours have swung between conflict and cooperation over centuries. Now, Vietnam is leaning more openly toward Beijing, as China-friendly security figures rise in Hanoi under party chief To Lam, a former public security boss. Lam will meet China’s leader Xi Jinping tomorrow on his first overseas trip since becoming state president on April 7, a move that formally unites two of Vietnam’s most powerful roles, echoing Xi’s own concentration of authority and breaking from Vietnam’s traditional emphasis on collective leadership. “Vietnam-China relations have entered a new stage, marked by higher political trust, more substantive defence and security cooperation, deeper and more practical cooperation across sectors,” Lam said in a joint statement with Xi after they last met in April 2025. This week’s visit is expected to yield dozens of cooperation agreements, people briefed on the plans said. While such documents are often non-binding, the relationship is becoming more tangible: China’s exports to Vietnam are at record highs, and Chinese investment in manufacturing south of the border is booming. o Hanoi considers Chinese-style regulation on data control, stock market, documents show

platforms are typically privately run. Vietnam is also expanding a national electronic identification system, enabling authorities to identify individuals through AI camera networks that are being rolled out nationwide – another parallel with China’s surveillance architecture. “The police’s rising power (in Vietnam) may partly explain a growing interest in Chinese-style social control tactics,” said Giang. Unencumbered by public opinion that has grown less critical of China, the Vietnamese Communist Party is also advancing a more China-style economic model centred on subsidies, public investment and large infrastructure projects, sometimes in direct cooperation with Beijing on sensitive projects including high-speed rail links. The shift has been reinforced by TikTok’s popularity in Vietnam, where positive narratives about China often dominate, and by Hanoi’s increasingly muted criticism of Beijing’s actions in the disputed South China Sea. Vietnam remains more open than China to foreign investors and still depends heavily on external capital. But China’s share of total investments is rising, and Chinese brands are gaining popularity at home. China’s influence is also visible in finance. Vietnam relies on unconventional monetary policy tools such as lending mandates to banks reminiscent of China’s policy, maintains tight foreign ownership caps in key sectors, and is grappling with a property bubble that echoes China’s experience. Now Hanoi is considering deeper intervention in equity markets. Proposed measures include a government-backed stabilisation fund to buy stocks during downturns – an idea explicitly modelled on China. “China created one and succeeded in reassuring investors,” said an Internal Security Ministry document. – Reuters

Vehicles make their way on a street as a train crosses a bridge in the Old Quarter of Hanoi yesterday. – AFPPIC

“Chinese interest in Vietnam’s data-centre market has increased noticeably over the past 18-24 months,” said Mickael Driol, head of investment advisory firm Mekong Partners. He said much of that is driven by manufacturers who moved operations to Vietnam from China. Hanoi is prioritising state control in data regulation, similar to China. Western tech companies and the US government have repeatedly raised concerns over data protection rules drafted by Vietnam’s security ministry that limit cross-border data transfers. Draft documents seen by Reuters show Vietnam plans to establish state run data-trading exchanges overseen by the public security ministry – mirroring China’s centralised data model and expanding the state’s ability to deploy information for surveillance and strategic goals. In Western markets, such

Vietnam’s security, prosperity, and autonomy, but also on its relations with the US and the West.” Vietnam’s Foreign Ministry did not immediately respond to a request for comment. Technology has emerged as one of the clearest markers of warming ties. Vietnam has dropped earlier concerns about the use of Chinese equipment in its 5G network, while the country’s largest internet provider FPT announced investments in an undersea cable to be built by a Chinese vendor that the US considers linked to sanctioned telecom giant Huawei. A telecom company under Vietnam’s Public Security Ministry is in talks with Chinese companies for additional 5G deals. Chinese firms are simultaneously exploring investments in Vietnamese data centres, a strategic asset, according to people familiar with the discussions.

The people spoke on condition of anonymity due to the sensitive nature of the topic. Vietnam is still hedging geopolitically, analysts say, keeping doors open to Washington and others. But at home, it is moving closer to China’s governance model – particularly control-driven regulation despite Western misgivings, underscoring how China’s influence is deepening as Lam reshapes the state. Vietnam has “a dual approach of actively learning from the Chinese model while selectively resisting its influence”, said Nguyen Khac Giang, a visiting fellow at Singapore’s ISEAS Yusof Ishak Institute. Alexander Vuving of the Asia-Pacific Centre for Security Studies in the United States, said that closer ties with China without adequate guardrails “will have a negative impact not only on

AI startup StepFun unwinds offshore structure to pave way for IPO: Sources HONG KONG: Chinese AI agent StepFun is unwinding its offshore incorporation structure to pave the way for a planned Hong Kong initial public offering, three sources said, as Beijing tightens scrutiny of a system widely used for overseas fundraising. China’s securities regulator said last month it had instructed some so-called“red-chip”companies that are registered abroad, mainly in tax havens, but hold assets and businesses in China via equity ownership, to unwind the structure. Experts have said the move could delay some listings as red-chip state capital, said two of the sources with knowledge of the move. Its structure had involved the Cayman Islands, according to corporate records. All of the sources declined to be named discussing StepFun’s change of corporate structure because the information was not public. StepFun did not respond to Reuters’ requests for comment. StepFun’s investors include guidance to keep offshore listing hopes alive and tap into strong investor demand for new shares issued by Chinese AI and semiconductor firms, among others. After a bumper IPO year for Hong Kong in 2025 with funds raised surging 231% to $37 billion, more than 530 companies have filed applications as of last month to list, most of them Chinese, stock exchange data shows. It was not clear how many are red-chip companies. Kong IPO by the end of June at a valuation of US$10 billion for anchor investors, the Caijing report said. Since its launch in February, StepFun’s Step 3.5 Flash has consistently ranked among the three most-used models on OpenClaw, the popular AI agent platform, alongside MiniMax M2.5 and Kimi K2.5. Its models have been adopted into mobile phone and automobile operating systems via partnerships with OPPO and Geely, according to public disclosures. In February, StepFun hired Yin Qi, founder of facial recognition AI startup Moonshot, for example, is weighing the necessity of dismantling its offshore incorporation structure and has yet to come to a decision, three people with knowledge of the discussions said. Its structure involved the Cayman Islands, according to corporate records.

The company, which developed popular large language model Kimi, is currently seeking to raise US$1 billion in a fresh funding round at a valuation of US$18 billion and could kick off a Hong Kong IPO process later this year, said the sources, who declined to be named as the information was confidential. Moonshot’s last fundraising, completed in February, valued the firm at US$10 billion, more than double a December round that valued it at US$4.3 billion, according to Chinese corporate information database Qichacha. Moonshot declined to comment. – Reuters

investment vehicles of the Shanghai municipal and district governments as well as Qiming Venture Partners and Chinese technology giant Tencent Holdings, according to public disclosures and media reports. Founded in April 2023 by former Microsoft vice-president Jiang Daxin, StepFun is regarded as one of China’s leading AI startups that have successfully developed large-language foundation models. The move by StepFun highlights how some Chinese companies are rushing to meet the new regulatory

But last year, one-fifth of 131 Hong Kong listings China approved involved offshore holdings, the majority of which used the red-chip structure, according to Chinese law firm Hankun. Chinese publication Caijing reported in February StepFun planned to raise 2 billion yuan (RM1.2 billion) to 3 billion yuan in a pre-IPO funding round at a valuation of up to US$6 billion. The firm planned to file for a Hong

company Megvii Technology, to be its president to enhance its core management team. Since the red-chip structure has been put under the spotlight, a number of Chinese companies, mostly in the tech sector, have started deliberating whether they should follow regulators’ guidance and change their domicile to China, according to investors and lawyers.

companies scramble to change their domicile back to China, and some might even have to abandon their IPO plans as changing the legal structure of the company could be cost-prohibitive. Shanghai-based StepFun, which develops general-purpose foundation models, has decided an onshore corporate structure would be more appropriate as it is heavily backed by