During a visit to Tokyo by Vietnamese President Vo Van Thuong, Vietnam and Japan officially upgraded their relations to a “comprehensive strategic partnership” on Monday.

The move highlighted Vietnam’s growing critical role as an important link in global supply chains in the midst of trade tensions between China and the West, which is helping to attract foreign investment to the Southeast Asian country as some corporations migrate operations from China.

“This is an important event, opening a new chapter in the Vietnam-Japan relation,” Thuong said in a speech broadcast on national television.

The elevation of ties with Japan followed Vietnam’s historic upgrade of relations with the United States in September, when the former foes signed multiple cooperation agreements, including on semiconductors and critical minerals.

Vietnam has designated five other countries as comprehensive strategic partners, including China, India, Russia, South Korea and the United States.

Japan is Vietnam’s third-largest source of foreign investment and its fourth-largest trading partner, with bilateral trade reaching $50 billion last year.

Several Japanese multinationals, such as Canon, Honda, Panasonic and Bridgestone, are among the largest foreign investors in Vietnam, turning it into a regional manufacturing hub, with one of the fastest-growing economies in Asia.

Vietnam and Japan, both embroiled in separate maritime disputes with China, in 2020 reached a $348 million Japanese loan agreement for Vietnam to build six patrol vessels.