Vietnam urged to get China-backed railway project on track, avoid ‘missed opportunities’ despite concerns

Preliminary planning for the 392 km-long (244 miles) Lao Cai-Hanoi–Haiphong standard gauge railway was finished in 2019 having first been mentioned in 2015. Once constructed, it will link the capital of China’s southwestern Yunnan province to one of Vietnam’s busiest seaports as part of China’s Belt and Road Initiative.

For the past seven years, the name of a Vietnamese railway project has appeared in every diplomatic joint statement and declaration between Beijing and Hanoi. But so far, it has remained firmly on the drawing board only.

The Lao Cai-Hanoi–Haiphong railway, which stretches from the northern Vietnamese border all the way to one of the country’s largest seaports, was again mentioned last week during the visit to Beijing by Vietnam’s Communist Party chief Nguyen Phu Trong.

The two sides said that they will strive for the early completion of the evaluation of the standard gauge railway project as a part of an overall effort to boost connectivity.

Once constructed, the route will be part of the eastern line of a high-speed railway network linking Kunming – the capital of China’s southwestern Yunnan province – to Singapore as part of the Belt and Road Initiative, according to David M. Lampton, professor emeritus at School of Advanced International Studies at Johns Hopkins University.

Vietnam has to think about the opportunities it may miss by not itself connecting to this growing system and enhancing connectivity with China itself – David M. Lampton

The first phase of the central line to the border between Thailand and Laos has been in operation since late 2021, with freight and passenger traffic growing, said Lampton, who is also a co-author of Rivers of Iron: Railroads and Chinese Power in Southeast Asia.

“As more and more traffic flows on the central line, Vietnam has to think about the opportunities it may miss by not itself connecting to this growing system and enhancing connectivity with China itself, despite Hanoi’s anxieties about dependency on [China],” said Lampton, who is also a former president of the National Committee on US-China Relations.

“As this economic region consisting of China and Southeast Asia continues to grow and develop, Hanoi has many reasons to be part of it.”

The route stopped being viewed as essentially cross-border in 2014 when the Chinese half was upgraded to 1,435mm standard gauge to accommodate high-speed trains and integrate into China’s national rail network, meaning it does not match the original 1,000mm track on the Vietnamese side that was constructed by the French at the start of the 20th century.

As trains can now no longer run through the border, shipments have to be unloaded and then reloaded onto another train, undermining efficiency and increasing cost, and both parties began to study the feasibility of constructing an international standard gauge for the Vietnamese part in 2015.

China agreed to provide a 10 million yuan (US$1.4 million) aid package to help Vietnam conduct surveys and map out the first blueprint for the line, according to a report from the state-backed Vietnam News Agency citing the country’s Ministry of Transport.

In 2019, consultants China Railway Fifth Survey and Design Institute Group finished their preliminary planning for the line, which is due to be 392km-long (244 miles) comprising 38 stations and able to accommodate both passenger and freight trains, the report said.

But further progress has been delayed by hesitation from the Vietnamese, according to analysts.

In Vietnam, general concerns about cooperation with China in infrastructure projects are multifold in all economic, political and social aspects – Chu Minh Thao

Vietnam is concerned over cost, anti-China sentiment, compromising its sovereignty, broader geopolitical factors and a less than satisfactory experience with the Chinese-built Hanoi Metro, Lampton added.

Chu Minh Thao, deputy director of Centre for Security and Development at the Diplomatic Academic of Vietnam, said that the belt and road strategy fits well with Vietnam’s push for regional economic connectivity and cooperation, but Chinese infrastructure projects in Southeast Asia still face certain difficulties.

“In Vietnam, general concerns about cooperation with China in infrastructure projects are multifold in all economic, political and social aspects,” Chu said in an article last year.

Loans from China have higher interest rates, and projects create an impression of delay and low quality and efficiency, as well as security concerns about overreliance, she added.

“Vietnam has been heavily indebted to China in many areas such as electricity, energy, coal power plants, which have caused environmental pollution, creating discontent in the society,” Chu said.

Nyuyen’s visit to Beijing was important for both strategic and economic reasons, said Lampton, as Vietnam seeks to find a balance between staying close to China while maintaining interest from the likes of the United States and Japan.

“For its part, China is seeing an ever-darker shadow of US ‘containment’ and wants to secure its southern border by improving relations with Hanoi,” he said.

“More positively, as economic growth in China slows, Beijing is trying to expand markets abroad to sustain brisk growth. And finally, China is building a world-class railroad export industry to be one of its future champion industries.

“To put it simply, Beijing aims to be the hub of the East and Southeast Asian economic system.”

By Ji Siqi – The South China Morning Post – November 12, 2022