HANOI (Reuters) -Singapore and Vietnam on Wednesday have agreed to enhance cooperation in subsea cables, finance, and energy, marking an upgrade in their relations to Vietnam's highest level, during a visit by its Communist Party Chief To Lam to the city-state.

Singapore is the third Southeast Asian nation, after Malaysia and Indonesia, with which Vietnam has established a "comprehensive strategic relationship".

In a joint statement released following the upgrade, Lam and Singapore's Prime Minister Lawrence Wong witnessed the exchange of six agreements and discussed cooperation in undersea cable development, digital connectivity, and cross-border data flows.

Southeast Asian countries, a major junction for cables connecting Asia to Europe, aim to expand their networks to meet the surging demand for AI services and data centres. Vietnam alone plans to launch 10 new submarine cables by 2030.

In December, Reuters reported that Singaporean asset manager Keppel and Vietnamese conglomerate Sovico Group were discussing plans for new undersea fiber-optic cables to boost the region's data centre industry, according to sources familiar with the matter.

In April last year, Vietnam's state-owned telecom company Viettel and Singapore's Singtel announced a preliminary agreement to develop an undersea cable linking Vietnam directly to Singapore, although no construction contract has been announced yet.

The two leaders also discussed green development, industrial parks expansion, and peace and stability in the region. Singapore pledged to support Vietnam in developing international financial centres, the joint statement said.

Singapore ranks among Vietnam's top foreign investors, having invested $10.21 billion last year, which accounted for 27% of Vietnam's total foreign investment, official data showed.