The interior regions of the People’s Republic of China (PRC) have not benefited as much from economic growth and reforms as the east coast. In fact, the gap in economic and social development had been increasing in the years leading to the project appraisal in 2005. Inadequate transport infrastructure and high logistics costs were among the key constraints.
The project line is a section of the Eastern Economic Corridor of the Greater Mekong Subregion (GMS) Economic Cooperation Program. It opened in the early 1900s and runs for about 285 kilometers (km) northwest from Hanoi to Lao Cai City on the border with Yunnan province in the People’s Republic of China (PRC).