China and Vietnam to Upgrade Regional Rail in Bid to Boost Exchanges

From 13 to 14 April 2025, Chinese President Xi Jinping was on a state visit to Vietnam. The visit of Vietnam forms part of a three-nation tour of ASEAN in a bid to counteract the influence of Trump’s tariff policy.

China and Vietnam have agreed too upgrade two railway lines built during the French colonial period over a century ago and to build a third rail link. China agreed to carry out the feasibility studies for two of the planned rail kinks at a cost of RMB 10 million ($1.4M).

The 3rd railway line will link the northern seaport of Vietnam with the City of Kunming in Yunnan province in China. The construction cost is estimated at USD 8.3 billion and construction is set to kick off in 2025, if all goes as planned.

On 14 April 2025, China and Vietnam signed 45 agreements, including supply chains, AI, joint maritime patrols and railway development. Many Chinese manufacturers have also delocalized to Vietnam in order to avoid the high tariffs imposed by US on China.

Now, with 47% tariff on Vietnam, it is not sure whether Vietnam can serve as a workaround anymore. Fortunately, Vietnam benefits from the 90-day suspension to assess its situation and to negotiate a deal with the US.