By Jarvis Lee | 2025-06-20

The development of a railroad linking Vietnam and China has reignited long-running Vietnamese distrust of Beijing's Belt and Road Initiative (BRI).

In February, Vietnam's parliament passed a law approving Chinese financing for a new railroad linking the two countries.

The project, with an estimated investment of $8.3 billion, will span 391km --running from Lao Cai, China, through Hanoi to the seaport of Haiphong. Construction is expected to begin this year and finish by 2030.

But the plan has raised alarm, with critics warning it may repeat the failures of Hanoi Metro Line 2A -- Vietnam's first mass rapid transit line.

That project, built by the Chinese state-owned China Railway Sixth Group, faced years of delays and cost overruns. Originally set at $552 million, the final cost ballooned to $868 million, with Chinese loans covering $669 million, as reported by the Hong Kong Trade Development Council.

The service opened in 2021. Ridership dropped sharply after an initial free-trial period. Recent online footage shows many trains running nearly empty.

The 13km-long line took a decade to complete.

The BRI has faced significant controversy across Asia, with anti-China sentiment, cost overruns and quality concerns topping the list, Nguyen Hac Giang, a visiting scholar at ISEAS-Yusof Ishak Institute, told Focus.

"Chinese companies will still face strict scrutiny even if they fulfill their obligations," he said.

Both the Vietnamese people and government remain "extremely distrustful" of Chinese investments, especially after construction safety problems and budget overruns plagued the rapid transit line, he added.

Growing skepticism

"Delays and quality problems in past projects have fueled public frustration," while growing fears of debt traps tied to Chinese loans "have only intensified public skepticism," Ha Hoang Hop, chairman of the Hanoi-based think tank Viet Know, told Voice of America in February.

While Hanoi is seeking Chinese loans for the new railroad, it previously opted for domestic financing to build a north-south high-speed line --"a decision that underscores Vietnam's commitment to strategic autonomy," he noted.

"A significant portion of the population remains concerned about growing economic dependence on China," he said.

China is only Vietnam's fifth-largest development partner, making Vietnam one of the few Southeast Asian countries where China is not the top financier, a March report by Australia's Lowy Institute found.

Chinese investments are also heavily concentrated -- 84% of China's spending in Vietnam must go to the energy sector, reflecting limited engagement and Vietnam's guarded approach.

Attitudes among the Vietnamese public reflect that caution.

According to the 2025 State of Southeast Asia report by ISEAS-Yusof Ishak Institute, 74.8% of Vietnamese respondents identified Chinese aggression in the South China Sea as their government's top geopolitical concern.

Some 51% said they lack had no or little confidence that China would "do the right thing" for global peace and security.

Both Vietnam's leadership and general public view China's behavior in the South China Sea as a threat to sovereignty, Nguyen noted.

"I think it would make it very difficult for China to really strengthen their ties with Vietnam, and there will be no major change in Vietnam's policy toward China," said Nguyen.

[Part III of IV in a series on China's Belt and Road Initiative in Southeast Asia]