HANOI, Vietnam: During Chinese President Xi Jinping's visit to Hanoi this week, China and Vietnam agreed to take the first steps toward building new railway links. According to an agreement seen by Reuters, they will begin feasibility studies for two new rail lines.
The two countries have been discussing upgrading old railway lines built by the French over 100 years ago and adding a new coastal route for years.
As the U.S. considers more tariffs, Xi encouraged Vietnam to work more closely with China on supply chains. Chinese parts are often sent to northern Vietnam for assembly before being shipped abroad.
Vietnam's top leader, To Lam, said that building the three planned railway lines is a top priority for both countries and asked China to help fund them with low-interest loans.
Under the agreement, China will spend 9.95 million yuan (about $1.36 million) on feasibility studies for two lines. The studies will begin within 12 months of selecting a contractor, though no selection date was given.
The first proposed line would connect southern China's Guangxi region with Hanoi, Vietnam's capital. The second would run between the port cities of Shenzhen in China and Haiphong in Vietnam.
Currently, there is a railway between Nanning in Guangxi and Hanoi, but passengers and goods must switch trains at the border because Vietnam uses an old railway gauge from the French colonial era that doesn't match China's modern tracks.
Tensions between the two countries—who fought a short war in the late 1970s and often disagree over the South China Sea—have slowed railway development. But now economic needs seem to be more important than past disagreements.
A third railway line from Vietnam's northern coast to Kunming in China is already planned to start construction this year. Vietnam estimates its part of the project will cost $8.3 billion, and it expects China to help fund it.
Although Xi's visit ended with the launch of a "Vietnam-China Railway Cooperation," no new loan agreements were announced, and it's unclear what the new cooperation includes.
