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China, Vietnam eye boost to rail links as leading leaders fulfill

Rail links will be high on the agenda when Vietnam's recently designated leader To Lam travels to China to satisfy President Xi Jinping next week, authorities stated, as the neighbours seek to boost trade.

Smooth rail links are viewed as essential for supply chains, as a growing variety of Chinese producers move some export-oriented operations to Vietnam in the middle of trade stress between China and the United States.

The countries are connected by 2 railways from Southern China to Vietnam's capital Hanoi and its northern commercial hub, but the Vietnamese infrastructure dates back to French colonisation and has a different gauge than Chinese high-speed rail, requiring passengers and products to switch trains at the border.

Skepticism in between the two Communist-run neighbours, which fought a short border war in the late 1970s and frequently still clash over limits in the South China Sea, has actually long hindered development on rail links, but in current months financial factors to consider appear to have prevailed over security concerns.

In December, Xi used grants and loans to help upgrade Vietnamese railways and the countries signed two memoranda of understanding (MoU) to improve train cooperation.

The focus of Lam's journey to China, his first abroad because he was likewise given the celebration chief job earlier in August, is on implementing signed contracts and attaining new substantive cooperation results, particularly in the areas of mutual interest such as railway connection, Vietnamese foreign minister Bui Thanh Kid said in a statement.

China's ambassador in Hanoi, Xiong Bo, informed local press reporters this week according to a summary seen that the 2 sides were speeding up prepare for 3 lines: the upgrade of existing rails from Lao Cai to the port city of Haiphong via Hanoi and from Lang Son to Hanoi; and the building of a third one along the coast from Mong Cai to Haiphong.

A Vietnamese official stated new contracts were anticipated throughout Lam's trip to China, including on trains, other financial investments and trade in farming items.

CHINA FUNDS

Prime Minister Pham Minh Chinh called for Chinese financing and innovation for Vietnamese railways during a see to China in June, according to Vietnamese state media, in what appeared as a considerable modification of tack.

He and leading ministers likewise satisfied in current months with executives of top Chinese companies in the rail service, consisting of train-maker CRRC and China Railway Signal & & Communication.

Hanoi has for years remained vague about using Belt and Road Initiative's funds, China's flagship infrastructure programme, after demonstrations emerged in Vietnam in 2018 over strategies that could have resulted in closer economic ties with China.

That, however, has actually not stopped Chinese personal financial investment in Vietnam, which is booming.

Vietnam is preparing a huge growth of its internal rail network with a 1,500-km-long high-speed connection from Hanoi to Ho Chi Minh City, at a cost estimated at roughly $70 billion, the country's biggest facilities task ever.

(source: Reuters)