On February 19, 2025, the Vietnamese National Assembly passed a milestone resolution with a 95% approval rate, approving the investment and construction of a standard gauge railway connecting the northern port city of Hai Phong in Vietnam with the Yunnan border in China.
This approximately 391-kilometer-long railway, with a total investment of about 8 billion USD, will not only transform the logistics landscape within Vietnam but also mark a key step forward in the infrastructure connectivity between China and Vietnam. The project is both a microcosm of Southeast Asian regional integration and a vivid example of the deep integration between the Belt and Road Initiative and Vietnam’s “Two Corridors and One Circle” plan.
The standardization of the railway’s track gauge is the core breakthrough in this project. Most of Vietnam’s existing railway network is based on narrow gauge (1-meter gauge) left behind from the French colonial era, while China uses the internationally standard 1.435-meter gauge. The gauge difference has led to the need for multiple cargo reloading during cross-border transportation, which is costly and time-consuming, thus becoming a bottleneck in China-Vietnam trade.
The new railway will adopt the same standard gauge as China, with a top speed of up to 160 kilometers per hour, and cargo efficiency is expected to increase by more than 30%. Behind this technological choice is Vietnam’s pragmatic attitude toward strengthening cooperation with China.
From a broader perspective, the unification of track gauges is not just a technical issue but a symbol of regional economic integration. In the future, goods from Vietnam will be able to travel directly by rail to Kunming in China, connecting to China’s extensive high-speed rail network, and then be transported to Europe via the China-Europe freight train. This will allow Vietnamese goods to enter the Eurasian market more quickly and cheaply, with significance far beyond bilateral trade between the two countries.
The rapid progress of the project is due to the high-frequency interactions between China and Vietnam in recent years and the deep complementarity of their economic structures. China has been Vietnam’s largest trading partner for 19 consecutive years, with bilateral trade surpassing 230 billion USD in 2024, yet land-based transport accounts for less than 10%. The completion of the railway will unlock the potential of land-based trade, particularly benefitting the circulation of bulk commodities like agricultural products and minerals.
The value of this railway extends beyond China and Vietnam. It is a key part of the Pan-Asian Railway Network’s eastern route, with future plans to connect with the China-Thailand Railway and China-Laos Railway, forming a major transportation artery across the Indochinese Peninsula. Goods from Kunming, China, can travel via Vietnam, Laos, and Thailand, directly reaching Singapore, thereby fundamentally changing Southeast Asia’s traditional reliance on sea and river transport.
For international investors, the improvement of this network represents new opportunities. For example, in the logistics sector, the World Bank predicts that the modernization of Southeast Asian railways could reduce regional logistics costs by 15%-20%, attracting more multinational companies to establish regional distribution centers. The tourism industry will also benefit, with future tourists able to take high-speed trains from Kunming to Vietnam’s Ha Long Bay or Hanoi in a day, expanding the cross-border tourism market.
Although Vietnam has sought to maintain a balance between China and the U.S., such as by recently planning to open its satellite internet market to SpaceX to ease trade frictions, this has not shaken Vietnam’s priority in cooperating with China. After all, the 2,200-kilometer land border with China makes it difficult for Vietnam to separate from its economic symbiotic relationship with China.
For the international community, China-Vietnam railway cooperation showcases the advanced nature of China’s “win-win” philosophy. Even against the backdrop of rising global protectionism, regional cooperation based on common interests can still break through barriers. Under China’s leadership, Southeast Asia is set to usher in a new era of regional win-win cooperation.
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