China’s Borders: Vietnam

In 2005, then-Vietnamese President Tran Duc Luong and Chinese President Hu Jintao issued a joint communiqué recognizing their common goals for expanding bilateral relations and addressing territorial border issues. The agreement set the ball rolling for a five-year plan that aims to lead to US$15 billion two-way trade by 2010 under the banner, "two corridors, and one economic belt."

In 2007, agreements were signed between the transportation ministries of Yunnan, China and Lao Cai, Vietnam to expedite border-crossing procedures for vehicles carrying cargo or passengers between the two provinces. Another major joint initiative is a four-lane highway link, connecting Hanoi to Kunming in Southern China's Yunnan province.

The project, underwritten by the Asian Development Bank and due to be completed by 2012, will cut transportation times between the two cities from the current three-day journey to a swift nine hours. The bank approved a US$1.1 billion loan to finance work on the 245-kilometer Vietnamese stretch of the highway from Hanoi to the border at Lao Cai. The highway - designated Asian Highway 14 in Vietnam - will link up across the border with one that is already under construction on the Chinese side, and when completed, give access for Chinese goods in Southern China to the Vietnamese port of Haiphong and increased markets in Southern and Central China to Vietnamese exporters.

China is currently Vietnam's largest trade partner. In 2008, trade between the two nations hit US$19.46 billion, a growth of 28.8 percent year on year. Trade is targeted to reach US$25 billion by 2010.

China has infused 407 direct investment projects in the country valued at an estimated US$1.07 billion. Chinese companies also bagged US$5.6 billion worth of construction projects with an expected turnover of US$1.92 billion. The two have also participated in exchanging human resources skills that resulted in China training 1,357 officials and technical personnel along with lending expertise for electric power station, light rail, communication, and mining industry projects.

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