Pan-Asian Railway Circle Construction Accelerates: Why Have Thailand and Vietnam Changed Their Attitudes? | Overseas Investment (AI Translation)
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文｜财新 邹晓桐
By Caixin Zou Xiaotong
【财新网】铁路联通东南亚构想加快落地，两条铁路有望年内开工。
[Caixin Online] The concept of rail connectivity in Southeast Asia is accelerating its implementation, with the construction of two railway lines expected to begin this year.
2025年2月8日，也就是泰国总理佩通坦访华的最后一天，中泰两国发布联合声明：双方同意共同加快中泰铁路一期工程建设，尽快确定二期合作模式，争取尽早启动二期工程建设。双方认为应当扎实推进中老泰联通发展构想，确保三国早日实现“无缝联结”。而在2月4日，泰国内阁已经批准了中泰铁路二期工程，计划2025年年内开工。
On February 8, 2025, the final day of Thai Prime Minister Paetongtarn's visit to China, both China and Thailand issued a joint statement: The two countries agreed to jointly expedite the construction of the first phase of the China-Thailand railway and swiftly determine the cooperation model for the second phase, with the goal of launching its construction as soon as possible. Both parties emphasized the importance of advancing the China-Laos-Thailand connectivity development initiative to ensure the seamless integration of all three countries. Moreover, on February 4, the Thai Cabinet approved the second phase of the China-Thailand railway, with plans to commence construction within the year 2025.
仅仅两天后，据越通社报道，2月10日，越南国会常务委员会第 42 次会议审议了由越南铁路管理委员会提请的老街—海防—河内铁路项目投资提案。会上披露，该项目预计需要约 2632公顷土地，将通过公共投资提供资金，预计总成本为203.23万亿越南盾（约合人民币581亿元）。资金来源将包括国家预算（中央和地方）、国内资本、外国贷款（来自中国的银行）等。
Just two days later, according to the Vietnam News Agency, on February 10, the 42nd session of the Standing Committee of the National Assembly of Vietnam reviewed the investment proposal for the Lao Cai-Hai Phong-Hanoi railway project, submitted by the Vietnam Railway Administration. During the meeting, it was revealed that the project is expected to require approximately 2,632 hectares of land and will be funded through public investment, with an estimated total cost of 203.23 trillion Vietnamese dong (approximately 58.1 billion RMB). The funding sources will include the national budget (both central and local), domestic capital, and foreign loans (from Chinese banks), among others.
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- The rail connectivity in Southeast Asia is rapidly advancing with significant projects including the China-Thailand railway and the Lao Cai-Hai Phong-Hanoi railway in Vietnam, expected to enhance regional transportation and integration.
- By 2024, the China-Laos railway has shown considerable growth with passenger transport increasing by 15.2% and freight by 10.6%, significantly reducing freight and transportation costs.
- The railway developments aim to improve regional trade and connectivity, enhance economic cooperation, and mitigate geopolitical risks within the complex trade environment of Southeast Asia.
The development of rail connectivity in Southeast Asia is advancing rapidly, with significant projects underway in multiple countries, indicating a pivotal shift towards enhancing regional transportation networks. On February 8, 2025, a joint announcement by China and Thailand revealed plans to expedite the construction of the China-Thailand railway. Both countries aim to swiftly complete the first phase and determine the cooperation model for the second phase to start construction as early as possible. Their joint initiative, which includes the China-Laos-Thailand connectivity development, seeks to achieve a seamless integration of all three countries. The Thai Cabinet recently approved the second phase of the railway project, set to begin in 2025 [para. 1][para. 4].
In Vietnam, the Standing Committee of the National Assembly is reviewing the investment proposal for the Lao Cai-Hai Phong-Hanoi railway, submitted by the Vietnam Railway Administration. The project is part of the broader China-Vietnam railway initiative and is expected to begin construction in December 2025. This proposal will require approximately 2,632 hectares of land and an estimated cost of 203.23 trillion Vietnamese dong [para. 2][para. 4].
Both the China-Thailand Railway and China-Vietnam Railway are critical components of the Pan-Asia Railway Network, a vision first introduced in the 1990s by former Malaysian Prime Minister Mahathir Mohamad [para. 5][para. 6]. The planning of this network faced delays due to various political and economic factors. However, the China-Laos Railway, operational since December 2021, has successfully demonstrated its value with significant passenger and freight transport increases [para. 1][para. 6].
The Pan-Asia Railway Network is expected to transform Southeast Asia by enhancing passenger and freight transport capabilities, invigorating route-based industries, promoting multilateral trade, and mitigating geopolitical risks. It is also poised to integrate with the China-Europe freight trains, reaching to Europe, underscoring China's commitment to the project [para. 6][para. 13].
The China-Thailand Railway has faced delays primarily due to funding, technology, and environmental challenges since its groundbreaking in December 2015. The first phase, connecting Bangkok to Nakhon Ratchasima, is being constructed to high-speed rail standards and is financed independently by Thailand, using Chinese technology and operational systems. However, completion is now pushed to 2028 [para. 3][para. 8].
The success and smooth launch of the China-Vietnam Railway project, a major Asian continental connectivity initiative, seem plausible due to Vietnam’s proactive stance and organizational clarity. Vietnam's commitment is underscored by its Prime Minister's engagement with China Railway Construction Corporation (CRCC), fostering their collaboration on several key railway projects [para. 16].
Public information indicates that the Lao Cai-Haiphong-Hanoi railway project will heavily rely on preferential loans from the Chinese government. Technical compatibility and enhanced cross-border transportation efficacy are driving factors in adopting the standard-gauge railway, promising a logistic competitiveness boost similar to that witnessed with the China-Laos railway [para. 18][para. 19].
Zhao Weihua, from Fudan University’s Institute of International Studies, emphasizes that the accelerated engagement of Vietnam in this initiative might be inspired by the positive impact and swift operations of the China-Laos railway. This acceleration aligns with China's expanding railway influence, expanding into Vietnam, where current international standards differ [para. 20].
Overall, as Southeast Asian countries, along with China, expedite their rail connectivity strategies, these transportation developments are poised to have a transformative impact on regional economic dynamics, fostering stronger economic and cultural interconnections across Southeast Asia and beyond [para. 22].
- China State Railway Group Co., Ltd.
- China State Railway Group Co., Ltd., also known as "China Railway" or "CR," is involved in the Chinese railway projects mentioned in the article. It is responsible for implementing the track, electrical, and rolling stock systems for the China-Thailand railway. Additionally, the company has been notable for facilitating the seamless integration of the China-Laos railway with the China-Europe freight train services.
- China Railway International Co., Ltd.
- China Railway International Co., Ltd., part of China Railway Group, is involved in the implementation of railway projects such as the China-Thailand high-speed rail. It leads Chinese enterprises in constructing tracks, electrical systems, and rolling stock. The company's collaboration emphasizes utilizing Chinese high-speed rail technology and operational systems in international projects.
- China Railway Construction Corporation Limited
- According to the article, Vietnam's Prime Minister personally visited the Chairman of China Railway Construction Corporation Limited (CRCC), indicating Vietnam's commitment to the railway project. CRCC is mainly responsible for the project's implementation without financial obligations, facilitating its smooth advancement. Vietnam also hopes CRCC will participate in other railway projects that could extend to the China-Vietnam border, alongside providing financial support, transferring technology, and assisting in talent development.
- The Export-Import Bank of China
- The Export-Import Bank of China is mentioned as the expected lender for the "Lao Cai–Hai Phong–Hanoi" railway project in Vietnam. The project plans to use preferential loans from the bank to fund the railway's construction, which aims to enhance connectivity between China and Vietnam by employing standard gauge tracks compatible with China's railway system.
- China Railway Group Limited
- The article mentions that China Railway Group Limited, also known as China Railway Construction Corporation (CRCC), plays a significant role in the development of the China-Vietnam railway. CRCC is responsible for implementing the project, which benefits from clear role divisions that enhance its feasibility and progression. CRCC's involvement indicates a focus on engineering execution without financial obligations, supporting Vietnam with construction expertise and potentially contributing to other railway projects extending to the China-Vietnam border.
- 1990s：
- Former Malaysian Prime Minister Mahathir Mohamad introduced the concept of the Pan-Asia Railway.
- October 2006：
- ASEAN countries signed the 'Intergovernmental Agreement on the Trans-Asian Railway Network.'
- 2010：
- China and Laos first reached a railway construction agreement.
- 2015：
- China and Laos officially signed the China-Laos Railway project agreement.
- December 2016：
- Construction on the China-Laos Railway (from Mohan to Vientiane) began.
- November 2021：
- Vietnam's first urban light rail, constructed by China Railway Group, commenced operations.
- December 3, 2021：
- The China-Laos Railway officially commenced operations.
- July 2023：
- The 'Lancang-Mekong Rong-Ou Express' was launched, realizing the integration of the China-Laos Railway and the China-Europe Railway Express.
- December 2023：
- China and Vietnam signed a memorandum of understanding to advance cross-border standard-gauge railway connectivity.
- After September 2024：
- Issues related to the location of Ayutthaya Station caused delays in signing contracts for the China-Thailand Railway.
- By December 2024：
- The first phase of the China-Thailand high-speed railway's construction progress was at 39.48%.
- November 2024：
- Vietnamese Prime Minister met with the CRCC Chairman in Kunming, stating Vietnam's aim to start construction of the 'Lao Cai-Hai Phong-Hanoi' railway in 2025.
- Early December 2024：
- Directors from the China National Railway Administration held discussions with Southeast Asian counterparts to enhance railway development cooperation.
- Late December 2024：
- Vietnamese Prime Minister requested that the Lao Cai-Haiphong-Hanoi railway project commence in December 2025.
- January 2025：
- The freight volume of the China-Vietnam freight trains showed strong growth momentum.
- February 4, 2025：
- Thai Cabinet approved the second phase of the China-Thailand railway with plans to commence construction within the year 2025.
- February 8, 2025：
- China and Thailand issued a joint statement to expedite construction of the China-Thailand railway.
- February 10, 2025：
- The 42nd session of the Standing Committee of the National Assembly of Vietnam reviewed the investment proposal for the Lao Cai-Hai Phong-Hanoi railway project.
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