A New High-Speed Railway Line Between Vietnam and China

by Sebastien GOULARD

At the end of February 2025, Vietnamese lawmakers approved the construction of a new railway line connecting the port of Hai Phong to the city of Lao Cai on the Chinese border. This new line will strengthen the economic ties between northern Vietnam and China, and even extend as far as Europe through the trans-Eurasian rail networks. The project reflects Vietnam’s ongoing transformation and marks a turning point in Sino-Vietnamese relations.

A New Route on the New Silk Roads?

This is an ambitious project spanning nearly 390 kilometers, with an estimated cost of $8.4 billion. The line is expected to be completed by 2030. To finance it, Hanoi plans to borrow from China, though not exclusively. The Vietnamese government appears intent on diversifying its funding sources, potentially through government bonds or official development assistance loans.

This decision nonetheless signals Vietnam’s participation in China’s Belt and Road Initiative (BRI), launched in 2013. Until recently, Vietnam had been hesitant to fully embrace the Chinese initiative, partly out of concern over Beijing’s potential dominance of its economy, and also because it had access to alternative funding from partners such as Japan and South Korea.

The growing presence of Chinese interests in Vietnam’s immediate neighbors—Cambodia and Laos—has likely pushed Hanoi to adopt a new regional dynamic more aligned with Beijing
A strong advocate of regional integration in Southeast Asia, Vietnam seeks to join the various rail infrastructure projects within ASEAN. China is already involved in building new lines in Laos, Thailand, and Indonesia. For Vietnam, aligning with this movement is strategically important.

Vietnam’s perception of the Belt and Road Initiative has thus evolved. In October 2023, President Vo Van Thuong participated in the 3rd BRI Forum. However, BRI-branded projects in Vietnam remained limited. Unlike other Southeast Asian countries, Vietnam had no flagship project, only a range of smaller-scale initiatives. The global context has also likely influenced Vietnam’s decision. The country finds itself on the front lines of U.S. protectionist policies, as demonstrated by former President Trump’s recent decision to impose 46% tariffs on Vietnamese imports. For Hanoi, diversifying its trade partnerships is now a strategic imperative—particularly through increased trade with China and deeper integration into Southeast Asia. By playing a more active role in the Belt and Road Initiative, Vietnam also hopes to boost the participation of its companies in major regional projects across Southeast Asia.

A Warming of Sino-Vietnamese Relations

This connectivity project between Vietnam and China also signals a new era of cooperation between the two countries, in a context marked by uncertainty stemming from the evolving U.S. trade policy. In an effort to reduce their dependence on decisions made in Washington, Beijing and Hanoi are expected to strengthen their bilateral exchanges. This will be a central message delivered by President Xi Jinping during his upcoming visit to Southeast Asia, which will include a stop in Vietnam. The key theme of the visit is expected to be the security and resilience of supply chains.

Faced with U.S. tariffs, some Chinese companies may turn to Vietnamese industrial zones to circumvent the new trade barriers.

Nevertheless, like other Southeast Asian nations, Vietnam will seek to maintain a balanced approach between the United States and China. As a major regional power, Vietnam harbors a range of ambitions centered on maintaining a high degree of strategic autonomy.

Modernizing Vietnam’s Infrastructure

The new railway line is part of a broader, even more ambitious effort to modernize Vietnam’s entire rail network. In November 2024, the National Assembly had already approved a resolution for the construction of a high-speed rail line (160 km/h) linking Hanoi and Ho Chi Minh City—the country’s economic hub—by 2035. The existing line is saturated and no longer competitive with air travel. The new line is set to become the country’s main transportation backbone.

Vietnam’s rail modernization plan also includes the construction of new infrastructure, notably the creation of special economic zones along the new lines. This is already planned for the route connecting the port of Hai Phong with China’s Yunnan province. These new developments are expected to attract foreign investment, particularly from China.