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22 Aug, 2012

Historic Pact Opens New Road Transport Route Between China, Viet Nam

22 August 2012  (ADB Press release) – For the first time, buses and trucks will be able to cross overland between the rugged southern regions of the People’s Republic of China (PRC) and the remote northern regions of Viet Nam using a 1,300 kilometer route spanning from Ha Noi to Shenzhen made possible through a road transport agreement between the two countries.

“The new transport agreement will have a profound impact not only on bilateral trade and tourism, but also on Greater Mekong Subregion (GMS) transport facilitation,” said Yushu Feng, Principal Economist, Regional Cooperation, at the Asian Development Bank (ADB), which facilitated the bilateral road transport agreement in line with GMS transport facilitation initiatives. “This is a key milestone for regional cooperation.”

The new agreement will ease restrictions on trucks and buses travelling between major economic zones in PRC’s Yunnan province, Guangxi Zhuang autonomous region, Guangdong province and six provinces in Viet Nam, including Lang Son and Quang Ninh provinces, and the cities of Ha Noi and Hai Phong.

Previously, transport operators were only allowed to travel up to 20 kilometers into each other’s territories. Starting August 2012, each country will be able to issue up to 15,100 permits for trucks and buses that travel within the border province area, and each will be able to issue up to 500 permits for trucks and buses than can go to inland provincial areas.

Another significant route, connecting Kunming to Ha Noi and Hai Phong and governed by the same agreement, was inaugurated in Kunming on 16 August 2012.

In 2011, road transport volume between PRC and Viet Nam through the Yuyi-Friendship border gate was as much as 1 million tons for goods and around 726,000 passengers traveled overland between both countries. Transport volume is expected to increase with the newly-implemented road transport agreement. To accommodate market demand, the permit quota for 2013 will be increased, accordingly.

Bilateral transport agreements amongst GMS member countries are building blocks for an all-encompassing GMS Cross Border Trade Agreement, which aims to remove impediments to regional trade and development. The GMS subregion, bound together by the Mekong River, covers an area about the size of Western Europe and has a combined population larger than that of the United States.