China's Xi urges greater cooperation with Vietnam as trade tensions with US flare

BEIJING (Reuters) -Chinese President Xi Jinping called for stronger industrial and supply chain cooperation with Vietnam and wider collaboration in emerging fields, the Chinese foreign ministry said on Monday, amid heightened trade tensions prompted by hefty U.S. tariffs.

Xi starts a three-nation tour of Southeast Asia this week, beginning his state visits with Vietnam from April 14 to 15.

The trip comes with an aim to consolidate economic ties with some of China's closest neighbours at a time when the world's top two economies are locked in a tariff tussle.

China hiked its levies on imports of U.S. goods to 125% on Friday, hitting back at U.S. President Donald Trump's decision to single out the world's No. 2 economy for higher duties.

Xi also urged strengthening coordination and cooperation through regional initiatives such as the East Asia Cooperation and the Lancang-Mekong Cooperation, the ministry said, citing an article by the Chinese leader published in Vietnam media.

He called such efforts necessary to "inject more stability and positive energy into a chaotic and intertwined world".

"There are no winners in trade wars and tariff wars, and protectionism has no way out," Xi said, without mentioning the U.S. specifically.

"We must firmly safeguard the multilateral trading system, maintain the stability of the global industrial and supply chains, and maintain the international environment for open cooperation," he said.

Last week, China sought to get ahead of U.S. negotiators, holding video calls with the EU and Malaysia, which is chairing ASEAN this year, as well as Saudi Arabia and South Africa, by way of reaching out to Gulf countries and the Group of 20 and BRICS nations.

In hope of avoiding punishing U.S. tariffs, Vietnam is prepared to crack down on Chinese goods being shipped to the United States via its territory and will tighten controls on sensitive exports to China, according to a person familiar with the matter and a government document seen by Reuters.

In the article, Xi said China welcomes more high-quality imports from Vietnam and encourages more Chinese enterprises to invest and start businesses in the Southeast Asian country.

Both countries should expand cooperation in emerging fields such as 5G, artificial intelligence and green development, the article said.

(Reporting by Liz Lee; Editing by Kim Coghill and Lincoln Feast)