The highway linking the town of Xinjie in Hekou County in southeastern Yunnan province with Lao Cai province in northern Vietnam was opened yesterday, marking completion of the first highway linking Yunnan with a neighboring country from the Association of Southeast Asian Nations (ASEAN).

The 56.3 kilometer, 3.58 billion yuan Xinhe highway is one of the numerous infrastructure projects that will increase connectivity between Yunnan and ASEAN and facilitate the transport of people and goods between the two regions, which are expecting to see a major increase in tourism and trade in the coming years.

Yunnan is preparing to serve as a main gateway for trade between China and ASEAN, especially after the launch of the first phase of the China-ASEAN Free Trade Area (CAFTA) in 2010. CAFTA will be the world's largest free trade area in terms of population, with more than 1.8 billion people.

In 2007 trade between Yunnan and ASEAN grew nearly 40 percent year-on-year, totaling more than US$3.03 billion. Yunnan exports to ASEAN states reached US$2.17 billion last year, with Vietnam replacing Myanmar as Yunnan's top trading partner.

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ADB's largest-ever financing project to bring Yunnan, Vietnam closer

Tags: ASEAN, CAFTA, Hehou, Lao Cai, logistics, Vietnam, Xinhe highway

Last week the Asian Development Bank (ADB) announced plans to finance a US$1.1 billion highway project that will connect the Vietnamese capital of Hanoi with Yunnan province via a 244-kilometer (151 mile) highway. The road is the largest single financing project by the ADB to date.

At present, travel times for passenger cars and trucks traveling from Kunming to Hanoi are two and three days, respectively. After the road in Vietnam is completed, the trip between the two cities will take less than a day. Completion of the highway is projected to take place in 2012.

Hanoi and Lao Cai province – on the Vietnamese border with China – are part of the Haiphong transport corridor that is expected to provide economic opportunities to impoverished northwest Vietnam plus greater access to social services for communities near the highway.

The road will also give Kunming greater access to the port of Haiphong, the closest seaport to the Spring City. This will make it easier for companies in Kunming and Yunnan to ship goods internationally. Similarly, agricultural and maritime products from Vietnam will have greater access to Yunnan, Sichuan and elsewhere in China's landlocked west.

The highway is also expected to be a boon to tourism between northern Vietnam and Yunnan, both of which are home to major tourist destinations such as Ha Long Bay and Sa Pa in Vietnam and Xishuangbanna, Dali, Lijiang and Shangri-la (Zhongdian) in Yunnan.

Traffic on the existing roads between Hanoi and Lao Cai has been averaging an annual increase of 12 percent in recent years. More than 5.5 million vehicles are projected to use the new road in 2012, with traffic expected to triple to 17 million over the following ten years.

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Yunnan moves toward greater integration with Vietnam

Tags: Asian Development Bank, business, Ha Long Bay, Haiphong transport corridor, Hanoi, Kunming-Hanoi highway, Lao Cai, logistics, Sa Pa, tourism, Vietnam

Recent transport agreements signed by China and Vietnam highlight the growing importance of the Yunnan-Vietnam trade relationship. The agreements were signed during a visit by Yunnan Governor Qin Guangrong to Hanoi for the Vietnam Expo 2007.

The transportation ministries of Yunnan and Vietnam's Lao Cai province signed an agreement earlier this month which will expedite border-crossing procedures for vehicles carrying cargo or passengers between the neighboring provinces.

The agreement will benefit trucking firms, which will no longer be required to unload their cargo at the border for transport via other trucks. Tourist and passenger services between Yunnan and Lao Cai will also be expedited, giving travelers from Yunnan easier access to destinations including Lao Cai City, Sa Pa and Van Ban.

China's Ministry of Communications and Vietnam's Ministry of Transport also signed a memorandum of understanding (MOU) earlier in the month paving the way for China to help its neighbor to the south build four expressways that will further integrate the two countries' road networks.

In the MOU, China pledged technological support including feasibility studies and road design on a Hanoi Airport expressway as well as the Hanoi-Lang Son, Hanoi-Haiphong and Hanoi-Lao Cai expressways.

According to Chinese government statistics, Vietnam overtook Myanmar as Yunnan's largest Southeast Asian trading partner in January of this year.

The Hanoi-Haiphong and Hanoi-Lao Cai expressways are of particular significance to Kunming as they will provide a road link via the Chinese border city of Hekou to the port of Haiphong - the closest port to Kunming. A 400-kilometer expressway connecting Kunming with Hekou is scheduled for completion this year.

The Hanoi-Lang Son expressway will connect the Vietnamese city with an expressway into Nanning, capital of Guangxi Zhuang Autonomous Region, via the Chinese border city of Youyiguan. Goods traveling into Guangxi will be able to continue on to major cities in and around Guangdong province including Guangzhou, Shenzhen and Hong Kong. No timetable for completion of the roads has been given.

Image: China Daily

Tags: business. logistics, Lao Cai, transportation, Vietnam