Depth report

　　

Vietnam is currently seeking China's support to develop a high-speed rail network, which has attracted attention. On June 25, Vietnamese Prime Minister Pham Minh Thien told Lou Qiliang, chairman of China Railway Communication and Signal Group, that Vietnam needs China's assistance in railway design, construction and technology transfer. Vietnam's Transport Minister, Nguyen Van Theng, has also sought China's support to help build a north-south high-speed rail line stretching some 1,500 kilometers.

Although Vietnam's economy has achieved rapid development in recent years, the construction of high-speed rail has been delayed. Following the opening of the China-Laos railway, the Jakarta-Bandung high-speed railway, and the China-Thailand high-speed railway under construction, the mature high-speed railway construction experience and technological advantages have made Vietnam turn to China again.

The long-delayed high speed railway in Vietnam

As early as 2001, the Vietnamese government began to plan for the high-speed rail project. In 2006, Vietnam and Japan signed a memorandum of understanding on railway development, and the construction of a North-South high-speed railway was put on the agenda. The north-south railway, with a length of about 1,500 kilometers, linking the capital Hanoi with the economic center of Ho Chi Minh City, was the most important project in Vietnam at the time.

But the plan was rejected by the National Assembly in 2010. In 2015, Vietnam's Ministry of Transport officially restarted the North-South high-speed rail project. After four years of research, the department proposed three new options for the project in 2019. However, the proposal was not approved by a consortium of consultants invited by Vietnam's National Evaluation Committee. To this day, the high-speed railway, which is vital to Vietnam, has not yet begun.

Vietnamese media "Vietnamnet" (Vietnamnet) has published an article that Vietnam's railway system is in urgent need of upgrading. Vietnam's railways are now obsolete after 100 years of use, the railway system has long been at a disadvantage and uncompetitive with land and air transport, and the development of high-speed rail is a solution that has been discussed for years, but decision-making has been quite slow.

Vietnam has also been looking for the best partner to build the North-South high-speed railway. According to the Time Weekly report, on March 11 this year, Vietnamese Minister of Finance Ho Duc Phuke held talks with Japanese Minister of Finance Jun Suzuki, once again introduced the North-South high-speed rail project, this time, the total investment of the project has increased to 67 billion US dollars, will introduce 30% of foreign capital, the rest in domestic financing. Vietnam hopes that Japan will provide financial assistance for the project. The Vietnamese government has also offered an olive branch to Germany's Siemens group, Siemens expressed willingness to provide vehicles and technology transfer and provide rail signaling systems, but did not make a clear statement on undertaking the entire North-South high-speed rail project.

So why has Vietnam turned to China for high-speed rail technology?

From the perspective of China-Vietnam relations, bilateral economic and trade exchanges have continued to warm up in recent years. China is Vietnam's largest trading partner, with two-way trade reaching $200 billion last year, according to Bloomberg data. Trade between China and Vietnam rose 22 per cent in the first quarter from a year earlier to $43.6bn, according to Vietnamese government data.

In December last year, China and Vietnam reached a high degree of consensus on building a China-Vietnam community of shared future with strategic significance. The joint statement issued by China and Vietnam proposed that the two sides will promote the China-Vietnam cross-border standard gauge railway connectivity, study and promote the construction of Vietnam's Lao CAI - Hanoi - Hai Phong standard gauge railway, and carry out the study of Tongteng - Hanoi and Mong CAI - Ha Long - Hai Phong standard gauge railway at an appropriate time.

Since the beginning of this year, Vietnam has also sent several officials to visit Chinese railway companies to seek cooperation in high-speed rail. Vietnamese Prime Minister Pham Minh Thiat said on June 25 that the Vietnamese government is willing to create favorable conditions for Chinese enterprises to invest in Vietnam and carry out mutually beneficial cooperation. He hoped that China Railway Communication and Signal Group and related enterprises would participate in the construction of railways in Vietnam, assist Vietnam in training talents, transfer technology and share experience in railway industry development with Vietnam.

Vietnamese news website "VnExpress" reported on the same day that Vietnam plans to build two cross-border railways, one connecting China's Yunnan province and Vietnam's northern port city of Haiphong, and the other connecting China's Dongxing city and Haiphong. Vietnam also wants to build a railway between Hanoi and the border province of Lang Son, which borders China's Guangxi province, the report said.

At the same time, Vietnam has witnessed the development of China's high-speed rail. From the 200 km/h "Harmony" to the 350 km/h "Fuxing", more and more countries have recognized China's high-speed rail technology and handed over their high-speed rail projects to China. Whether it is the China-Laos railway, the Jakarta-Bandung high-speed railway in Indonesia, or the China-Thailand railway under construction, it has become a model of international engineering cooperation.

Once built, how much impact?

In recent years, with the continuous promotion of the "Belt and Road" construction, the "Trans-Asian Railway" has been put on the agenda, and the interconnection between China and Southeast Asia is a key part of it.

Some analysts pointed out that after the opening of the North-South high-speed railway in Vietnam, it can be connected with the Chinese railway and further open up the railway channel between the two countries. In addition, by connecting with China's railway, Vietnam has opened up the land route to the west of Europe, and with the help of China-Europe freight trains, Vietnam's goods trade can reach the entire Eurasian continent.

Professor Zhao Weihua, director of the China Neighborhood Research Center at Fudan University, believes that the docking of the China-Vietnam railway and the construction of the North-South railway in Vietnam will greatly promote the realization of trade goals, boost the economic and trade development of China and Vietnam and the European Union, Russia and Central Asia, which will greatly change the pattern of international trade and bring greater stability to the international order.

According to the impact assessment of the Ministry of Transport and the General Bureau of Statistics of Vietnam, if the project is effectively promoted, the North-South high-speed rail project can contribute about 1 percentage point to Vietnam's GDP growth annually between 2025 and 2037. By 2050, the annual demand for railway passenger transport will be about 120 million passengers and the annual freight volume will be about 18 million tons. However, Deputy Transport Minister Nguyen Tan Hui also pointed out that the large and complex high-speed rail project faces multiple challenges and requires close coordination between government agencies and localities. At present, no matter which option is chosen, the realization of Vietnam's high-speed rail dream still needs to overcome many difficulties, and it is unknown whether it can start work on time.