VietNamNet Bridge - Is Vietnam capable of controlling the international transportation railway, or will it be controlled by Chinese companies?

The Kazakhstani Ambassador to Vietnam has suggested building an international railway from Vietnam to EAEU (Eurasian Economic Union) countries (Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan) with transit points in China, and an international shipping line between Vietnam and Kazakhstan, with transit points in China.

The railway and shipping line aim to boost trade between Vietnam and EAEU countries within the framework of the Vietnam-EAEU free trade agreement (FTA) which took effect on October 5.

There are two ways of organization. First, goods will be carried from Vietnam to EAEU countries and from EAEU countries to Vietnam through stations in the Vietnam-China border areas with transit points in China.

With the second choice, goods will be carried from Vietnam’s ports to Khazakhstan harbor at Chinese Lianyungang Port (49 percent of the port’s stake is being held by Kazakhstan railway corporation). After that, goods will be shipped by container vessels to Kazakhstan and other EAEU countries.

Vietnam needs to think carefully if the potential is great enough for it to take such high risks

Nguyen Ngoc Son, a lecturer of the Ton Duc Thang University, said in principle, transport routes would facilitate the development of trade. However, he said, in this case, Vietnam will still need to think carefully about the project.

Son said it was necessary to think if the railway and shipping line would pave the way for Chinese backflow to Vietnam instead of serving as routes to bring Vietnamese goods to the EAEU market.

He also pointed out that there are many things for Vietnam to consider in this case, where the transit points are in Chinese territory. Vietnam would feel safe if the transit points are in Japan or South Korea, which make high-quality products and have trade prestige.

Meanwhile, the flow of low-quality Chinese products is not what Vietnam wants. Besides, there are many other concerns about issues not related to trade. 

“A question has been raised about Vietnam’s resources. Are they strong enough to control the railway and shipping line, or they would be controlled by Chinese companies,” Son said.

Surveys show that Khazakhstan, Belarus and Kirgizia are markets with great potential, while Vietnamese goods are still not available there. However, there are also high risks. Vietnam needs to think carefully if the potential is great enough for it to take such high risks, one analyst said. 

“I think one cannot say for sure that if the international transportation routes are built, the economic relations between Vietnam and EAEU, headed by Russia, would be better,” he said.

Thanh Lich