The director of the Pentagon’s new “Economic Defense Unit” was a board member of Tier 1 Group, which trained four of the Saudi operatives involved in the 2018 murder of journalist Jamal Khashoggi. Websites dating back to 2009 list George Kollitides in leadership roles at the private security company — indicating he was at Tier 1 Group when it trained the Saudi nationals later linked with Khashoggi’s killing. Under Saudi crown prince Mohammed bin Salman’s approval, the agents tricked Khashoggi into going to the Saudi Consulate in Turkey — where they ambushed and strangled him, and dismembered and disposed of his body. Tier 1 Group maintains the training it provided to those involved was for defensive purposes, unrelated to the murder, and for a contract with the State Department, which pre-approved the personnel. An industry source familiar with the matter told RS on the condition of anonymity that Kollitides resigned from Tier 1 Group “as of August 17, 2025.” A longtime financier, Kollitides was Head of Defense at Cerberus Capital Management, a prominent private equity firm that founded and funded Tier 1 Group, from 2003 to 2012. He is also Chief Investment Officer of Aegis Capital Advisors — an advisory firm which, until Monday, listed Tier 1 Group in its portfolio. A spokesperson from Cerberus told RS that Kollitides has “no involvement with the operations of Cerberus or any of its portfolio companies." Now at the Pentagon, Kollitides heads the recently established Economic Defense Unit, which is assembling a team of top-tier investors and bankers to invest $200 billion in U.S. companies it considers critical to U.S. national security, in order to compete with China. The unit has been operating for at least a month.

Cerberus’ Pentagon?

Kollitides now joins other former Cerberus executives, at the forefront of Defense Department policy. Indeed, former Cerberus CEO Stephen Feinberg is now the DoD’s deputy secretary — its second-highest-ranking civilian. His high-level duties, including overseeing the defense budget, afford him extraordinary influence. Feinberg is also overhauling the Office of Strategic Capital (OSC), which attracts and scales private investments in military technologies; David Lorch left an executive post at Cerberus in late 2025 to lead it. Despite the new government roles, ties to Cerberus endure. Although he divested from his stake in Cerberus upon joining the DoD, Feinberg filed paperwork indicating he still contracts with the firm for tax compliance and accounting services, and for health care. Meanwhile, companies Cerberus invests in, such as Stratolaunch, NetCentrics Corp, Red River Technologies, M1, and North Wind, have acquired Pentagon contracts since Feinberg assumed the Pentagon role. Kollitides’ Economic Defense Unit seems poised to siphon in more insiders. A pitch deck for the unit promises financier recruits “unmatched access to top-level government officials and privileged information flow” and a chance to invest “more capital than most investors deploy in their entire careers" — essentially marketing the unit as an elite professional development opportunity.

critical support to JDPON Don for turning the entirety of US military procurement into an insider trading scheme

“Even if no laws are broken, this is exactly the sort of arrangement that invites insider dealing, political favoritism, and capital allocation based on connections rather than merit,” Tad DeHaven, a policy analyst at the Cato Institute, told RS. Zooming out, lawmakers have long scrutinized Cerberus execs’ ties to Tier 1 Group. In 2020, Trump nominated Cerberus executive and Tier 1 Group board member Louis Bremer to become assistant secretary of defense. But Bremer faced intense questioning over his role at Tier 1 Group at a hearing over his nomination, which was subsequently left to expire. Observers say the scrutiny should continue. "Congress should hold hearings on [Kollitides’] appointment and on the Economic Defense Unit itself,” Raed Jarrar, advocacy director at DAWN, which Khashoggi founded, told RS. “Congress should not allow a private equity network tied to the murder of Khashoggi to run hundreds of billions in Pentagon investment policy without any oversight." Kollitides, Aegis Capital Advisors, Tier 1 Group, and the Pentagon did not respond to requests for comment. Aegis Capital Advisors removed Tier 1 Group from its portfolio on its website after RS contacted the advisory firm. A spokesperson from Cerberus told RS in an email that Feinberg divested in his stake from Cerberus, and is “not involved with the operations of Cerberus or any of its portfolio companies in any way.” They said the services Cerberus provides to Feinberg are unrelated to its operations and investments, and that Lorch is not involved with Cerberus’ operations and affiliated companies.

The Army has officially given a new name for its MV-75 tiltrotor, calling it the Cheyenne II, though the service is closely holding additional details about the rotorcraft’s timeline, including its expected first flight.“ It’s going to happen when it’s going to happen. So we are moving as fast as we can,” Maj. Gen. Clair Gill, Program Acquisition Executive for Maneuver Air, told reporters last week. “If I was king, and I had all the money in the world and all the engineers, and there were no limits, we probably would be able to do it in a matter of months.” The Cheyenne II MV-75 is the result of Bell-Textron‘s victory in the Army’s high-profile Future Long Range Assault Aircraft competition, designed to in part replace some of the mission sets of the service’s aging Black Hawk fleet. Announcing the chopper’s new designation today, Under Secretary of the Army Mike Obadal called the MV-75 a “foundational system of this modern combined arms force.” “Its modular open design digital backbone allows us to keep pace with emerging technology through innovation in the field that closes the gap in commercial development,” he told the audience here at the Army Aviation Association of America conference. As recently as January then-Army Chief of Staff Gen. Randy George was bullish on the Cheyenne II’s timeline, saying it could be flying with formations by the end of this year or beginning of next. Production could begin as early as 2028, he said.

Speaking to reporters on Friday both Gill and Brent Ingraham, the service’s acquisition czar, declined to say if they were holding onto either timeline. “I don’t want to be overly optimistic and commit to something that two years from now, I would potentially look back and say there were so many factors in there that I didn’t control and we didn’t understand till we got to that point,” Gill said. One of those prominent variables is the complexity of the program, involving about 300 tier one and almost 2,000 tier three and four suppliers. (Gill didn’t discuss numbers related to tier two.) “There are certain raw materials that help us make certain metals that we want to have in this aircraft to ensure that we don’t have any failure of components, and we’re competing with the entire world for these same raw materials. And the vendors you know, the sub-tier suppliers, […] they are trying to develop components as fast as they can. They’re looking to us for guidance,” said Gill, who is dual-hatted as the commanding general for the Army Aviation Center of Excellence. Brig. Gen. David Phillips, Gill’s deputy PAE, added that the Army has been working closely with the Air Force and Navy who fly the V-22 tiltrotor, along with industry on how to get hold of the right raw materials for the job. “We worked with industry to really use better tools to scrub all of those build materials to really see where the pinch points are. Where are we competing with commercial industry? Where are we making sure that we’re not getting materials from the wrong parts of the world?” Phillips said.

Gill emphasized that though there are supply chain lessons the Army can take from the V-22, ultimately, there are “fundamental differences” between how the two aircraft are designed and will perform. Apart from supply chain pressure, there are also budgetary constraints that could hinder the production and prototyping timelines, Gill said. The absence of predictable funding ultimately “kills any momentum” made in moving up timelines for the Cheyenne II especially with government shut downs or continuous resolutions. Oftentimes the primes, Bell-Textron in this case, have to step up to try to keep that momentum going, he added. “Every one of [Bell’s] sub-tier suppliers cannot weather that storm every year. And so what happens is, if we have no money, and we either have to stretch the program, slow down the program, stop the program, then it puts tremendous strain on the rest of it. And that’s why I know you all want dates, because it makes a story, but that’s why I can’t give you dates, because I don’t control those variables.” Gill said. “So we need to know that this program is going to be funded every year, that we’re going to have the right appropriation coming to us.” In the president’s recent budget request, the Army saw a bump of nearly $600 million for research, test, development and engineering funds for the MV-75 compared to FY26, signaling the service is in a good position to move the program to the left.

Though the Cheyenne II is slated to replace some of the missions of the Black Hawk, and the recent budget documents drastically cut funding for Black Hawk procurement, Ingraham said Friday that the Army is not “getting rid” of any of the existing fleet. “We are not getting rid of any of those platforms. A lot of the existing platforms will be in the fleet for years to come. We have worked to ensure that that is laid into the budget appropriately,” he said. “I think you’ll see as the full budget rolls out, you’ll see where we’re focused on, not only introducing this new aircraft, but ensuring that we maintain and keep the operational fleet we’ve got today.”

The Pentagon’s budget request for fiscal 2027 increases funding for missile procurement by 188 percent — a shocking spike in demand that experts agree completely outstrips the defense industry’s production capacity. As a result, the experts say, the Pentagon and Congress are likely to provide the ability to spend this year’s funding over multiple years, while sending a signal to industry that munitions are a long-term priority amid global uncertainty. “I think the Pentagon is viewing this as a generational budget, as something to try and overcome some of the longstanding challenges that existed and to essentially reposition the United States so that it does have the stockpiles it needs in the future,” said Becca Wasser, the defense lead for Bloomberg Economics. That budget request, delivered to Congress earlier this month, calls for $1.5 trillion in defense spending for FY27 with $1.15 trillion in the base budget request and an additional $350 billion from a forthcoming reconciliation bill. (A separate supplemental funding request for operations in the Middle East could be forthcoming too.) Within that $1.5 trillion plan for FY27, budget documents broadly detail a roadmap for spending approximately $70.5 billion on missiles and other related line items — $36.6 billion for the Army, $22.6 billion for Navy weapons, and $11.3 billion for the Air Force. By comparison, the munitions figures for the three services combined were just under $20 billion in FY25 and $24.4 billion in FY26 — meaning FY27’s request is a 188 percent increase over what was approved for FY26. “This is a recognition of the fact that there is a munitions gap, that there is a problem with the US not having sufficient levels of some of its higher end munitions and recognition that they would need more, which isn’t something that we always hear from the Pentagon,” Wasser said. “Ultimately, what this request does,” Wasser said, “[is] it puts the onus on Congress. It says, ‘Here’s what the Pentagon is willing to do. You’ve told us to be more steady in procurement. That’s what we’re going to do. Now you’ve got to fund it.’”

A Gamble

For several years Pentagon leaders have been eyeing ways to boost weapons numbers ahead of a potential military contingency with China, and as they watched Ukrainian and Russian forces burn through munition rounds. That sense of urgency has only intensified as US forces draw deep into stockpiles of key weapons like Tomahawk cruise missiles and PAC-3 interceptors for Operation Epic Fury against Iranian forces. Those pushes have taken several shapes, including gaining congressional approval to sign multiyear buys for certain weapons such as the Patriot Advanced Capability-3 (PAC-3) Missile Segment Enhancement interceptors. And, more recently, the Pentagon has inked a series of framework deals designed to boost munition production over the next seven years by having companies invest in their manufacturing facilities for programs like PAC-3 interceptors, the Precision Strike Missile (PrSM), and seekers for both Terminal High Altitude Area Defense (THAAD) interceptors and PAC-3 interceptors. While subsequent production contracts to actually buy more of those weapons have not yet been finalized, the Pentagon on Thursday awarded Lockheed Martin a $4.7 billion undefinitized contract action to begin work associated with the framework deal. The Pentagon has not yet released budget justification documents that could provide additional details on how the department will structure buys, and the services did not directly answer Breaking Defense’s questions about weapon spending plans. But Tom Karako, a missile defense expert with the Center for Strategic and International Studies, said the FY27 budget request likely includes funding that will be spread over multiple years, as the huge production increases laid out in FY27 simply cannot be achieved in a single year. As an example, he pointed to the Terminal High Altitude Area Defense (THAAD) interceptor line. In FY26, 55 interceptors were funded, a number that mushrooms to 857 in FY27. The budget request also includes funding for 785 Tomahawk missiles — broken into 58 Tomahawk missiles in the base budget and another 727 in reconciliation. That sum is a whopping 1,327 percent increase from FY26, when the Navy procured 55 Tomahawks, itself a major boost from 20 units in FY25.

“They can’t buy that many in a single year, and [Tomahawk-producer] Raytheon can’t produce that many at once,” said Todd Harrison, a defense budget expert with AEI. “But the intent is they will have the money there so that they can go to Raytheon and say, ‘Hey, we want to place a big order. We know you can’t build them all at once, but we want you to expand your production and we already have the funding. We can now guarantee this to you.’” “It’s even better than a multiyear procurement,” Harrison added, “because in multiyear procurement, you still have to wait for future appropriations.” Several analysts also emphasized that roughly $40 billion, or around 55 percent, of the munitions request is being sought through reconciliation, which opens more flexibility to the services because that “mandatory” funding is available over a longer period than is typical for discretionary funds. “Things they put into reconciliation, they tend to be things where they are essentially pre-funding acquisition,” said Harrison. “It’s things where they know they’re not going to be able to buy that many of that item at once in one year. But they also know that reconciliation money, unlike regular appropriations, is available for longer.” But getting a second reconciliation bill over the finish line before Democrats likely reclaim a chamber of Congress in the upcoming midterm elections will be a strategic “gamble,” Karako said. “The plan for reconciliation is a little bit of a risk, but I think it’s probably a good one, because [including the weapons] makes it a must-pass. But the gamble of putting the things that we really need the most into the reconciliation makes it harder to vote against,” he explained. But Harrison noted that while the munitions budget is typically an area where there is bipartisan support, deep cuts to the nondefense budget and the overall scale of the defense budget boost could result in more “hangups” on weapons spending.

What The Budget Buys

The Pentagon’s Munitions Acceleration Council has identified a dozen or so munitions as “critical,” many of which could receive a large windfall in FY27. That includes eight munitions Congress approved multiyear procurement authority for in the FY26 appropriations bill:

• PAC-3 MSE: These Patriot missiles could jump from 357 rounds on the books for FY26 for just the Army to 3,203 in FY27 for the Army and Navy — nearly a nine times hike.
• Standard Missile-3 and Standard Missile-6: When it comes to all varieties of the Standard Missile, the department received funds for 166 of those weapons in FY26 but is now looking to boost that to 540 in FY27, of which 434 would be funded through reconciliation.
• Long Range Anti-Ship Missile (LRASM): The Air Force and Navy plan to buy a total of 333 LRASMs next year, a slight bump up from the 314 total for FY26.
• Joint Air-to-Surface Standoff Missile Extended Range (JASSM-ER): The Air Force wants funding for 821 rounds, up from the 381 count included in the FY26 budget.
• THAAD interceptors: The Army is requesting funds to cover 857 THAAD interceptors in its FY27 budgets, with 830 included in reconciliation, a large increase over the 55 interceptors budgeted for the year before.
• Advanced Medium Range Air to Air Missiles (AMRAAM): The Air Force and Navy are hoping to fund 1,811 AMRAAMs in FY27 with the bulk coming from reconciliation funding. If approved, that would nearly quadruple the number of 464 AMRAAMs greenlit in FY26.
• Tomahawk Cruise Missiles: The Navy is requesting funding for 785 Tomahawk missiles with 58 missiles placed inside the base budget and another 727 in reconciliation. That sum is a 1,327 percent increase from FY26, when the Navy procured 55 Tomahawks.

Spokespeople for both RTX and Lockheed Martin did not directly address questions about how their respective companies could meet the missile and interceptor numbers detailed in the FY27 budget request. RTX, instead, referred to previous statements that the company plans to spend $3.1 billion on capital expenditures in 2026, while Lockheed said it has invested more than $7 billion since President Donald Trump’s first term to expand capacity for priority systems. “Lockheed Martin is planning a multibillion-dollar investment over the next three years to expand production and build and modernize more than 20 facilities in Arkansas, Alabama, Florida, Massachusetts and Texas,” a company spokesperson said. “This includes upgrading existing facilities and incorporating advanced manufacturing techniques, production lines, tooling and plant layouts to meet urgent production demand.” Ultimately, Congress is going to have to take a serious look at what industry can actually deliver before it signs off on such a historic spending plan, said Carlton Haelig, a defense budget expert at the Center for a New American Security.

The general in charge of America’s Golden Dome missile defense shield said today that a high-profile and technologically ambitious element of the project, space-based interceptors (SBIs), may not make it into the final architecture as originally envisioned if the tech is shown to be prohibitively costly. “We are so focused on affordability. If we cannot do it affordab[ly], we will not go into production,” Space Force Gen. Michael Guetlein told members of a House Armed Services Strategic Forces subcommittee today. “Because we are looking at the threats from a multi-domain perspective to make sure I have redundant capabilities and I don’t have single points of failure,” he added. “So, if boost-phase intercept from space is not affordable and scalable, we will not produce it, because we have other options to get after it.” As in past engagements, the four-star general heading up the sprawling, multilayered homeland air defense system maintained that SBI technology exists today, but coupled the optimism with reassurance before lawmakers that the price tag will be a key driver. (Though Guetlein was discussing boost-phase intercept, in which adversary missiles are destroyed shortly after launch, the Space Force has expressed interest in space-based mid-course intercept as well.)

Late last year Space Force began awarding SBI prototype deals to multiple vendors, and the service’s fiscal 2027 budget request includes $2 billion in procurement funding for “Special Space Activities.” Given that nowhere in the Space Force’s request is there any mention of funding for the classified contracts issued last year to begin SBI prototyping for Golden Dome, it’s possible some SBI funding is held in the special activities pot. Guetlein, appoint Golden Dome czar by President Donald Trump in May 2025, was testifying today alongside several other senior military officials about America’s missile defense enterprise and the administration’s newly revealed FY27 $1.5 trillion budget request. However, few details about Golden Dome spending plans were discussed. And while subcommittee Chairman Rep. Scott DesJarlais, R-Tenn., praised the department for becoming more transparent with its Golden Dome plan. However, Rep. Seth Moulton, D-Mass., the panel’s top Democrat, pushed back on it from a “technical and fiscal perspective.” “It is clear to me now that the reality does not match what President Trump has promised to the American people: An impenetrable shield … against all threats,” he said. So far, Pentagon officials including Guetlein have remained relatively tight lipped in public about the plan they contend will cost $185 billion, but FY27 budget documents shed a bit more light on their spending projections. The potential for SBIs was briefly touched on in a newly released an unclassified version of the Space Force’s Objective Force plan for the next 15 years. It notes, “If the Space Force builds space-based interceptors or supports their employment, it should undertake a focused study into the specification required to do so.”

By The Numbers

Earlier this month the White House submitted its fiscal 2027 (FY27) budget request to Capitol Hill. That request included $1.5 trillion in defense spending for next year with $1.15 trillion in the base budget request and an additional $350 billion from a forthcoming reconciliation ask. (A separate supplemental funding request for operations in the Middle East may also be forthcoming.) Although the in-depth budget justification documents detailing specific plans and timelines has not yet been released, initial documents outline broader Golden Dome and missile defense spending plans. For Golden Dome the Pentagon wants to spend $17.5 billion in FY27, but with only $398 million in the base budget — a potentially risky move if lawmakers do not pass the reconciliation bill. Tom Karako, a missile defense expert with the Center for Strategic and International Studies, called that decision part of a larger “legislative strategy” where by placing Golden Dome dollars and items like critical munitions in the reconciliation plan it forces lawmakers’ hand and provides the department with more flexibility and time to spend the dollars. “[It] is a little bit of a risk, but I think it’s probably a good one, because it makes it must pass,” Karako told Breaking Defense last week. As for the actual numbers, the Golden Dome request parses out spending among the services and agencies across three pots of money: research and development, procurement, and maintenance (O&M), procurement.

The bulk of the request, $14.2 billion, is spread across the services and agencies to cover research and development efforts, with nearly $4.5 billion coming from MDA’s pot, $4.5 billion from the Space Force, $615 million from the Air Force, $427 million from the Army and $174 million for the Defense Advanced Research Projects Agency. Another $2.3 billion pot is placed under a nondescript Golden Dome umbrella, while $452 million is allocated for developmental work on directed energy systems development, and $497 derived from the Under Secretary of Defense for Intelligence & Security budget. In total, Pentagon budget documents lay out plans to spend $2.2 billion in procurement on Golden Dome next year, with MDA’s budget covering $1.8 billion while Air Force coffers cover $365.7 million. And when it comes to the $1.2 billion O&M spending plan for Golden Dome next year, MDA’s budget could cover the lion’s share with a $893 million ask, followed by $143.5 million from the Air Force budget and $7 million from the Army. There is also another $106 million slated to come from a broad Golden Dome account too, according to budget documents. While budget documents released so far do not detail just which service and agency programs fit under the Golden Dome homeland defense umbrella, there are various technology candidates scattered throughout. MDA’s FY27 budget request, for example, includes nearly $12.4 billion for research and development funding, up from the $8.2 billion allocated for FY26. Almost $1.5 billion from that total would go towards ballistic missile defense “enabling programs,” another $1.7 billion towards “special programs” and $1.3 billion for “improved homeland defense interceptors.” The administration is also requesting $5.7 billion to pad the agency’s procurement coffers next year, an increase from the $2.5 allocated this year. That includes $800 million for an unspecified type and number of Counter-Small Unmanned Aircraft Systems, $1.2 billion for Aegis ballistic missile defense, and $4.2 billion to purchase 136 Standard Missile-3 Block IIA’s.

Cannabis has long walked a fine line between medicine and abuse. While it has shown potential for relieving pain and regulating mood, cannabis-based drugs are strictly controlled worldwide due to side effects such as tolerance, addiction and cognitive impairment. For years, scientists have sought a solution that could preserve therapeutic effects while eliminating these risks – a truly “safe and effective” approach.

Professor Li Xiaoming (2nd from left) and his team. /Zhejiang University

Professor Li Xiaoming (2nd from left) and his team. /Zhejiang University

A collaborative team from the School of Medicine and College of Pharmaceutical Sciences of Zhejiang University has rationally designed a series of small-molecule drugs. These compounds offer potent pain relief while effectively bypassing the risks of addiction and drug tolerance. The study, recently published in the international flagship journal Cell, represents a significant leap forward for chronic pain sufferers worldwide seeking safer, non-opioid alternatives.

Targeting the brain’s pain and emotion centers

Previous studies from the team revealed that stress and other negative stimuli can trigger abnormal activity in the amygdala, a key brain region for emotional regulation. Reduced expression of type 1 cannabinoid receptors (CB1) contributes to this imbalance, potentially leading to anxiety and depression. Activating CB1 in the amygdala with exogenous cannabinoids can restore emotional balance, while CB1 in the thalamus influences pain thresholds, making it a critical target for central analgesic effects.

Molecular “surgery” and the bio-switch

CB1 receptors signal through two pathways: the Gi/o pathway, which mediates therapeutic effects like pain relief, and the β-arrestin pathway, which is linked to side effects such as addiction and tolerance. Conventional CB1 agonists activate both pathways, leading to undesirable consequences.

Comparison between traditional CB1 agonists and rationally designed biased small molecules. /Zhejiang University

The Zhejiang University team applied structure-activity relationship analyses to rationally design small molecules that selectively activates the Gi pathway while minimizing β-arrestin signaling. This “biased signaling” approach allows pain relief without the typical side effects of cannabinoid drugs.

Reviewers praised the study for its innovative approach. One noted, “This work is the first one to make a rational use of the differences in the binding pocket between G protein and arrestin coupled receptors.” Another added, “The study is a tour de force presentation of structure-based design of CB1 agonists that appear to prefer G protein signaling over β-arrestin1 recruitment.”

Promising results and the road ahead

In animal experiments, these compounds provided robust analgesia across multiple pain models, without evidence of addictive behavior or declining effectiveness. They also reduced side effects on motor activity and body temperature, successfully avoiding the central nervous system complications associated with conventional cannabinoids.

The Leading researcher, Professor Li Xiaoming, said the team is optimizing these compounds and conducting systematic validation in preparation for clinical trials.

“Our goal is to start from clinical needs, uncover disease mechanisms through basic research, identify therapeutic targets and develop drugs that genuinely improve patients’ quality of life,” said Li.

As research continues, this biased-signaling strategy could open a new era of precision medicine, offering transformative therapeutic possibilities not only for chronic pain but also for a wider range of complex disorders.

According to data from the General Department of Vietnam Customs, trade relations between the two countries have experienced robust growth in recent years. While bilateral trade turnover in 2023 reached approximately 171.9 billion USD, this figure surpassed the 200 billion USD mark for the first time in 2024, reaching around 205 billion USD. By 2025, this number soared to about 256.4 billion USD, an increase of nearly 25%, solidifying China’s position as Vietnam’s largest trading partner and simultaneously making Vietnam China’s largest trading partner within ASEAN. In terms of trade structure, Vietnam’s exports to China last year reached approximately 70 billion USD, while imports surged to nearly 186 billion USD.

Notably, the composition of goods is undergoing a positive shift. Vietnam maintains its strengths in agricultural, forestry, and fishery products such as durian, dragon fruit, bananas, rubber, cassava and cassava products, and is increasingly penetrating deeper into China’s retail systems and supermarkets with higher standards. Concurrently, the export share of processed industrial goods like electronics, machinery, and components is rising, indicating a clear upgrade in the value chain of Vietnamese products destined for the market of 1.4 billion people. Conversely, imports from China are primarily concentrated in machinery, equipment, components, raw materials, and auxiliary materials—crucial inputs for industrial production. This serves as the foundation that helps Vietnam’s key export industries, such as electronics, textiles, and mechanics, maintain their global competitiveness.

A New Chapter in Investment Flows

In parallel with trade, investment flows from China are emerging as a new highlight and a factor creating a “new chapter” in bilateral economic relations. According to data from the Ministry of Finance, investment capital from China into Vietnam has increased continuously, reaching nearly 6 billion USD in 2025, an increase of over 33%, propelling China to second place among foreign investors in Vietnam. Significantly, whereas capital flows previously concentrated mainly on labor-intensive industries, they are now shifting strongly towards high-tech sectors and foundational industries.

A series of Chinese “eagles” have established a presence in Vietnam with large-scale projects. Corporations such as Foxconn, Luxshare-ICT, Pegatron, Goertek, and Compal have invested billions of USD in the electronics sector. Luxshare-ICT alone has invested over 1.8 billion USD and considers Vietnam a key production hub within its global network. The electric vehicle manufacturer BYD has also initiated a battery production project worth approximately 130 million USD in Hue, opening a new avenue for cooperation in the electric vehicle and clean energy sectors. Furthermore, ongoing expansion of projects in component manufacturing, materials, fibers, and tires, ranging from hundreds of millions to billions of USD, demonstrates that Vietnam is becoming an important destination in the supply chain restructuring strategies of Chinese enterprises, especially within the context of global production shifts.

Promoting Cooperation in High-Tech Fields

Stepping into this year, although investment capital in the first three months reached approximately 828 million USD and showed signs of slowing down, the outlook for cooperation remains highly positive. Emerging sectors such as semiconductors, artificial intelligence, electric vehicles, and green energy are rising as potential pillars of cooperation, capable of creating significant leaps forward in the near future.

Another noteworthy aspect is the enhancement of infrastructure and logistics connectivity, a factor that is directly elevating the quality of economic cooperation. Both sides are vigorously promoting cross-border railway connection projects, particularly the routes from Lao Cai - Hanoi - Hai Phong and Dong Dang - Hanoi - Hai Phong, aiming for deeper integration with China’s railway network. The development of smart border gates, digitalization of customs procedures, and the construction of cross-border economic corridors are helping to shorten customs clearance times, reduce logistics costs, and enhance supply chain efficiency.

Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan assessed that economic and trade cooperation between Vietnam and China is maintaining strong growth momentum, with its scale continuously expanding. The goods structure of the two economies is highly complementary, creating conditions to boost production and exports. According to the leadership of the Ministry of Industry and Trade, the approach to the Chinese market needs significant adjustment in the coming period. This is no longer an “easy” market as before; rather, it is increasingly tightening standards regarding quality, traceability, and food safety. Therefore, Vietnamese enterprises need to promptly update themselves on new consumer trends in the market, thereby restructuring production towards improving quality, increasing value, and meeting higher standards.

In attracting capital flows from China, Vietnam encourages Chinese enterprises to shift investment from traditional sectors such as textiles, footwear, and assembly towards high-tech and innovative industries, including artificial intelligence, semiconductors, renewable energy, the green economy, and the digital economy.