China and Vietnam consider rail links through rare earth heartland.

Senior officials and diplomats have stated that China and Vietnam are now working on a potential considerable improvement of their undeveloped rail lines to improve a line that traverses the heartland of Vietnam’s rare earth industry and delivers goods to the most important port in the nation’s northern region.

Officials and diplomats have reported that the talks are taking place as preparations for a possible visit to Hanoi by Chinese President Xi Jinping in the coming weeks. This would further confirm Vietnam’s increasingly strategic role in global supply chains, which is becoming increasingly important as significant powers such as the United States compete to gain influence in that region.

China’s top diplomat, Wang Yi, is scheduled to meet with Vietnam’s Deputy Prime Minister, Tran Luu Quang, in Hanoi on Friday. According to diplomats, the two leaders will likely discuss the possibility of deepening commercial relations and establishing railway links.

The Vietnamese Prime Minister, Pham Minh Chinh, issued a statement in which he advocated for the improvement of the railway that connects Kunming, which is located in southern China, to the port city of Haiphong, which is located in Vietnam. This statement was issued after China’s Commerce Minister Wang Wentao made a rare visit to Vietnam.

In recent statements, Chinese officials have emphasized the need of enhancing the connection of their infrastructure with their southern neighbor.

The train links between Vietnam and China are already in place; however, the system is somewhat outdated and has a restricted capacity on the Vietnam side. Because the two systems are not yet compatible, trains must stop at the border when passengers and freight are switched to domestic services.

The improved railway will travel through the region where Vietnam has the highest reserves of rare earths, and China is by far the largest refiner of rare earths in the world.

Even though Vietnam attempts to establish its sector in what is perceived as a potential threat to China’s supremacy, these efforts have been hampered by what appear to be arguments inside the country.

According to Vietnamese official media, Chinese and Vietnamese industry specialists in the rare earths sector came together last week to explore ways to further their collaboration on the processing of the minerals.

The amount of money that China would give to the modernization of the railway track in Vietnam is unknown, and it is also unknown whether or not Hanoi would accept significant finance from Beijing for this project.

A diplomat stated that it is unclear if the line would be categorized as a Belt and Road Initiative (BRI) project, even though it may be considered a component of China’s flagship Belt and Road Initiative (BRI), which is aimed at facilitating investments in infrastructure all over the world.

In addition, a strengthened railway link could increase Vietnam’s exports to China, which are primarily agricultural products; it could also increase the number of Chinese tourists who visit northern Vietnam, and it could further integrate the manufacturing industries of the two countries, which experts already consider to be mutually beneficial, with factories in Vietnam primarily assembling components that are produced in China.

China is Vietnam’s most important trading partner and has also been the country’s primary investor up to this point in the year. This is especially true when Hong Kong’s investment is taken into consideration. This is because many Chinese businesses are moving some of their operations south in response to trade tensions between Beijing and Washington.

The two communist nations are engaged in a maritime dispute in the South China Sea that has been going on for years. They also fought a brief war in the late 1970s, China’s most recent conflict. This is even though their economic ties are flourishing.