Vietnam’s parliament recently approved plans for an $8 billion rail link that will connect Haiphong, its largest northern port city, to Lao Cai, a mountainous city on the border with China. The new 390-kilometer (240-mile) railway is expected to enhance trade and economic ties between Vietnam and China, particularly as it passes through major manufacturing hubs like Hanoi, where companies such as Samsung, Foxconn, and Pegatron have operations. This move is part of Vietnam’s broader goal to boost infrastructure and ease trade flow, which has been challenged by underdeveloped rail systems and bottlenecks in the road network.
The rail link is backed by China through loans and forms part of Vietnam’s “Two Corridors, One Belt” initiative, aligning with China’s Belt and Road program. Once complete, it will support the steady flow of raw materials from China to Vietnam’s manufacturing sector, boosting efficiency and reducing reliance on slow, costly trucks. The project has received broad support, with 95% of parliamentarians in favor.
This is part of a larger push by Vietnam to improve its transport infrastructure. Just months prior, the country also approved a $67 billion high-speed railway project linking Hanoi and Ho Chi Minh City, set to significantly cut travel time and improve connectivity between the north and south.
Vietnam’s ongoing modernization efforts in transportation infrastructure are seen as essential for attracting further foreign investment, as the country increasingly becomes a preferred alternative to China for global businesses. However, the country’s rail network is currently outdated, and the timeline for completion, which includes a target for 2030, may face delays.
