The International Herald Tribune recently reported that plans for a four-lane highway from Hanoi to Kunming are expected to be confirmed soon. While this will definitely lead to the greater integration of northern Vietnam and southern China, I think its long-term significance will be measured as part of the increasing network of trade corridors within & across Asia, as well as, between Asia and markets in Europe & the Middle East. As the article notes:

“…By 2012, when the highway is completed, cars, buses and trucks will be able to speed people and goods between northern Vietnam and southern China, opening the prospect of a significant new economic development zone in Asia.

A journey that now takes three days by truck will be reduced to just nine hours. Goods made in China’s Yunnan Province will gain quick access to the Vietnamese seaport of Haiphong, and Vietnamese exporters will be given the opportunity to reach untapped markets in China.

…The construction will add a section to the ambitious Asian Highway program under which 27 Asian countries have pledged to build a 140,000-kilometer network of roads that meet minimum uniform standards.

… The highway, one of several transport infrastructure projects that is integrating the economies of northern Vietnam with southern China, is seen by government and Asian Development Bank officials as a vital spur to the region’s growth, particularly lifting the pace of development in the four poorest provinces of Vietnam.

“I think the integration will be of mutual benefit,” said Ho Quang Minh, a director general in Vietnam’s Ministry of Planning and Investment, in a telephone interview from Hanoi. “Southern China is a very big potential market, not just for Vietnam, but for other countries. On the other hand, China can utilize the seaport facilities in northern Vietnam and obtain a short cut to other countries of Southeast Asia.”

The Vietnamese government and the Asian Development Bank hope that replacing the existing Hanoi-to-Kunming road – a narrow, dangerous and congested artery that winds through towns and over many small bridges along the Red River – will be the catalyst for the establishment of industrial parks that will attract multinational corporations. Traffic on the route is forecast to rise from about 3 million vehicles a year now to 5.5 million in 2012 and 17 million in 2022.

With rising costs in China, improved transport connections could entice more investors into Vietnam, where lower wages give workers a competitive edge….”