China has accelerated its infrastructure investments in Southeast Asia in recent years. Among the most significant of these investments are railway projects. Developed under the Belt and Road Initiative, these railway projects strengthen transportation and logistics connections between countries, facilitating faster trade. Vietnam’s recent approval of the $8 billion China-Vietnam railway project once again highlighted the importance of railway projects. Countries such as Thailand, Vietnam, Laos, and Malaysia are making significant investments in railway projects under China’s Belt and Road Initiative, aiming to both strengthen their economies and deepen their relations with China. These projects not only enhance regional economic integration but also significantly expand trade and tourism potential among nations.
Laos took one of the first major steps in railway development by implementing a $6 billion railway project built by China in 2021.[1] This railway connects China’s Kunming city to the capital of Laos, Vientiane, with plans to extend it further to Singapore. Laos, which was previously a country with weak infrastructure and had only a 4-kilometer railway network, has undergone a major transformation with the completion of this project. Despite the economic and social challenges posed by the project, it has had a significant positive impact on Laos’ tourism sector and has contributed to the enhancement of regional trade.
The final phase of the rail link between Thailand and China has been approved, paving the way for a $10.2 billion project that is expected to be completed by 2030. This project encompasses the 357-kilometre railway line extending from Bangkok to Nong Khai along the border with Laos. The completion of the project will enable high-speed rail services from Bangkok, the capital of Thailand, to Kunming, the capital of China’s Yunnan province. This initiative is regarded as a response to the success of the China-Laos railway. Experts have pointed out that the China-Laos railway has led to a significant increase in exports and tourism to the Laotian economy, thereby generating interest in similar projects in neighboring countries. Thailand’s investment in this project is driven by its strong economic and trade relations with China. For the last decade, China has been the largest trading partner of Thailand and its most important source of tourism. In addition, the 50th anniversary of diplomatic relations between the two countries is imminent, which makes this project symbolically significant.[2]
Vietnam has also recently approved an $8.3 billion railway project aimed at strengthening its relations with China. This railway will connect Lao Cai in northern Vietnam to the capital, Hanoi, and further extend to the port city of Haiphong. The project intends to modernize Vietnam’s existing railway infrastructure and adapt it to China’s standard rail gauge. This is expected to deepen the integration between Vietnam’s manufacturing hubs in the north and China’s industrial regions in the south.
Vietnam’s investment in this project aligns with the economic development goals of the country, which prioritize infrastructure investments. Although China and Vietnam have experienced diplomatic tensions, northern Vietnam’s industrial zones are deeply linked to China-based supply chains. Consequently, experts believe that the economic benefits of such railway projects outweigh the potential risks.[3]
Malaysia has also revived a $17 billion railway project with the support of China, to facilitate passenger and freight transportation between its eastern and western coasts.[4] This project aims to strengthen the connection between the east and west coasts, providing a significant advancement in trade and logistics. Initially launched under a previous administration, the project was canceled due to payment disputes but is now set to be completed by 2027.
China’s railway projects in Southeast Asia have immense potential to enhance regional economic integration and strengthen trade relations. Countries such as Thailand, Vietnam, Laos, and Malaysia aim to use these projects to both improve their own economies and deepen their relations with China. However, for these projects to be sustainable, it is crucial to address social, environmental, and economic challenges. The railway projects under China’s Belt and Road Initiative are expected to play a significant role in further shaping Southeast Asia. However, the successful management of the challenges encountered in this process will be a determining factor in their overall success.
[1] “China’s Sprawling Rail Projects Around Asia”, Irrawaddy, https://www.irrawaddy.com/news/asia/chinas-sprawling-rail-projects-around-asia.html (Date Accessed: 26.02.2025).
[2] “Thailand adds last piece in China rail link as bilateral ties get back on track”, SCMP, https://www.scmp.com/economy/china-economy/article/3297552/thailand-adds-last-piece-china-rail-link-bilateral-ties-get-back-track (Date Accessed: 26.02.2025).
[3] “Vietnam’s National Assembly Approves $8B Rail Link to China”, The Diplomat, https://thediplomat.com/2025/02/vietnams-national-assembly-approves-8b-rail-link-to-china/ (Date Accessed: 26.02.2025).
[4] “China’s Sprawling Rail Projects Around Asia”, Irrawaddy, https://www.irrawaddy.com/news/asia/chinas-sprawling-rail-projects-around-asia.html, (Date Accessed: 26.02.2025).
