Value of China-Vietnam Cross-border Freight Trains More Than Triples in Q1, a Stable Supply Chain for ASEAN

By GT staff reporters

Apr 23, 2022 03:34 PM

A train carrying aluminum products departs from Gongxing station of the Chengdu-Kunming Railway and heads for Hanoi, Vietnam on April 18, 2022. This is the first customized train from Chengdu's airport to Hanoi. So far, Chengdu has operated 52 international trains, transporting more than 2,000 containers with a value of 320 million yuan ($50 million). Photo: cnsphoto

The value of cargo on China-Vietnam cross-border freight trains has more than tripled since the beginning of the year, official data showed, highlighting wider trade between the two countries and a stable supply chain for Southeast Asia boosted by the regional economic partnership.

Market watchers said the rising trade is benefiting from the implementation of the Regional Comprehensive Economic Partnership (RCEP), which triggered the growth potential of cross-border trains, and rising shipping fees also push more companies to land transportation. 

The Pingxiang Railway Port in South China's Guangxi Zhuang Autonomous Region oversaw a total of 202,000 tons of goods in the first quarter, an increase of 95.8 percent over the same period last year; the total value was 6.32 billion yuan ($972 million), a year-on-year increase of 240.7 percent. Among them, the growth of imported fruit witnessed a jump, data from the Nanning Customs showed on Saturday.

Located on the China-Vietnam border, Pingxiang is China's biggest land fruit trade port, and the port is the only cross-border railway port in Guangxi.

Ma Siwei, general manager of Heze-based Shandong China Post International Logistics, told the Global Times on Saturday that the company has witnessed a jump in the number of freight trains to Vietnam in recent months.

In the past, one train or 50 TEUs containers' goods could be formed and transported to Vietnam per month. But we now have three or four freight trains each month, especially after the Spring Festival holidays, he said. 

Different cities in China have been busy opening freight trains. On April 15, a freight train loaded with Dell-branded computer parts left the Chengdu International Railway Port in Southwest China's Sichuan Province for Vietnam.

This is the first direct train from a western Chinese city to Vietnam, and it will take seven days for the train to arrive.

Since the beginning of the year, to meet the demand from manufacturing enterprises, international freight trains from Chengdu to Vietnam have shifted from rail-sea combined transportation to railway transportation. The journey requires a track-gauge change on the China-Vietnam border.

Another freight train carrying 82 TEUs of goods left Hefei, East China's Anhui Province for Hanoi, Vietnam in February.

Data showed that a total of 98 trains with 2,940 TEUs between China and Vietnam were launched in the first quarter of the year at the Pingxiang Railway Port.

Ma attributed the growth to fast customs clearance, less transport time, and government subsidies. 

In the past, it would take several weeks for the goods to arrive by sea, but now, it will only take around two weeks to pick up the goods, he said, not to mention the rising shipping fees also make more companies shift to freight trains.  

Nearly half of exporters in neighboring cities are choosing trains, and the type of goods is more diversified including wood products and coffin in Caoxian county in East China's Shandong Province, bicycles from North China's Hebei Province and medical equipment from Central China's Henan Province, he added. 

Official data showed that trade between China and Vietnam exceeded $230 billion last year, and China has remained Vietnam's largest trading partner for many years, and Vietnam continues to be China's largest trading partner in the Association of Southeast Asian Nations (ASEAN).

Zhao Lijian, spokesperson of the Ministry of Foreign Affairs, said on Friday that the newly opened China-Vietnam cross-border freight trains have injected new impetus into bilateral trade, and that China is willing to work with Vietnam to continue to promote the efficiency of cross-border railway intermodal transportation and guarantee the supply chain.

The China-Laos Railway is also a convenient logistics channel between China and ASEAN, and a number of provinces and cities in China have started cross-border freight trains, which Chinese customs data showed that trade by train between China and ASEAN increased three-and-a-half times in the first quarter.

Observers attributed the fast growth of trade between the two sides to the stable recovery of the regional industry chain. According to S&P Global, the manufacturing purchasing managers' index of ASEAN members was 51.7 in March, maintaining the expansion trend, driving China's trade with ASEAN in intermediate products to grow.

Li Kuiwen, an official at the General Administration of Customs, said with the RCEP that came into effect at the beginning of the year, new dividends further boosted economic and trade relations between China and ASEAN. 

China's trade with ASEAN totaled 1.35 trillion yuan in the first quarter of 2022, an increase of 8.4 percent year-on-year, as ASEAN returned as China's largest trading partner after the EU surpassed it in the first two months this year, customs data showed.