Lao Cai makes effort to become leading logistics hub

The core of smart border gate

To realize the goal of optimizing cross-border goods flows, Lao Cai Province is accelerating the implementation of its Smart Border Gate project. With Phase 1 targeted for operation in the first quarter of 2027, the project is expected to mark a breakthrough in digital transformation, creating a modern, secure and efficient channel for trade between Viet Nam and China.

As of now, the Smart Border Gate project in Lao Cai has officially selected an investor, and infrastructure preparations are being accelerated. Vuong Trinh Quoc, Head of the Lao Cai Economic Zone Management Board, said the investor is actively completing key legal procedures, including land leasing, basic design approval and construction permits for the infrastructure.

Alongside physical infrastructure, the legal and institutional framework for operating the smart border gate is also being urgently finalized by ministries and agencies in line with the scheme approved by the Prime Minister. Specifically, the Ministry of Construction is expediting the development of safety standards and technical regulations for transport vehicles, while the Ministry of National Defence has assigned relevant units to develop the operating plan. Meanwhile, the Ministry of Finance has tasked the General Department of Customs with drafting a circular on smart customs supervision procedures.

The key factor enabling the smart border gate to significantly accelerate cargo clearance is its ability to share logistics information.

Under the Ministry of Finance’s draft circular, cargo information fields will be shared through the ASEAN Single Window. However, in the initial phase, once the two enterprises operating the border gates on the Vietnamese and Chinese sides agree on the means of cargo handover, data sharing will occur internally between the two operators to ensure security and seamless coordination.

In the future, once the system is fully developed and officially connected to the National Single Window, cargo data fields will be expanded across the international network in accordance with customs control regulations.

This modern model is specifically designed to handle large volumes of goods packed in standard containers, particularly agricultural products and fresh fruit whose information has been standardized, including origin, growing area codes and packing facility codes. When these goods are classified as low-risk shipments (green channel), the system will automatically scan QR codes, conduct screening and allow automated customs clearance.

By contrast, oversized or overweight cargo, bulk goods and mixed consignments of various commodities will continue to be transported using conventional motor vehicles. Shipments subject to 100% inspection (red and yellow channels) may eventually pass through the smart border gate system but will still be required to strictly comply with specialized inspection and control procedures.

The parallel and seamless operation of the traditional and smart border gates is expected not only to resolve congestion in agricultural shipments during peak seasons, but also to reinforce Lao Cai’s position as a key and highly secure logistics link along the economic corridor connecting Viet Nam and China.

Expanding the strategic gateway between Viet Nam and China

According to Vuong Trinh Quoc, since the border gates reopened, authorities on both sides have built close cooperative ties, creating a solid foundation for infrastructure connectivity and attracting businesses to participate.

In particular, China’s Yunnan Province attaches great importance to this trade gateway and has assigned the Honghe Hani and Yi Autonomous Prefecture a direct role in developing it. The route from Kunming through Honghe to the East Sea via Hai Phong Port is the shortest and most convenient option, as it runs along the Red River corridor.

From a geographical perspective, Lao Cai’s advantages become even more apparent. The total distance from Hai Phong Port to Lao Cai and from Hekou to Kunming is only around 1,000 km. By contrast, transporting goods from Kunming through Nanning to Hai Phong Port would extend the route to approximately 1,300-1,400 km. This difference has made Lao Cai an ideal trade gateway, helping sustain strong year-on-year growth in bilateral import and export activity.

This geographical advantage is also reflected in the complementary structure of bilateral trade. On the import side, goods from China mainly consist of subtropical agricultural products in which Yunnan has a competitive advantage, such as apples, pears and grapes, as well as vegetables including potatoes, cabbages and radishes. These are followed by strategic inputs for domestic production, including fertilizers, machinery and equipment, and electricity.

Conversely, Lao Cai International Border Gate serves as a gateway for Vietnamese specialties to enter the market in Yunnan and southwestern China. Demand for tropical fruits from Viet Nam’s southern provinces remains strong, particularly dragon fruit, mangoes, jackfruit, pineapples and durians. At the same time, agricultural products from the Northwest region are also gaining a firm foothold in the market. “Agricultural products such as passion fruit and coffee beans from Son La are in very high demand when exported through this border gate,” Quoc said.

Positioning Lao Cai as a leading logistics hub

Beyond traditional import and export flows, Lao Cai Border Gate has significant potential to attract transit cargo. In reality, southwestern China has huge demand for imported agricultural commodities such as peanuts, soybeans and corn from countries around the world. Therefore, the most efficient option is to bring these goods through Viet Nam’s seaports before transporting them via Lao Cai into the Chinese hinterland.

To handle the growing volume of import, export and transit goods, relying on the few existing border crossings is no longer sufficient. Lao Cai Province and China’s Yunnan Province are now working together to develop infrastructure projects to expand their trade gateways.

Along the two provinces’ more than 182-km land border, the national master plan envisions upgrading and opening three pairs of international border gates. The Lao Cai International Border Gate, with its two clearance points at Ho Kieu and Kim Thanh, is already operating efficiently. Going forward, Muong Khuong Border Gate will be upgraded, while a new clearance point at Ban Vuoc will be developed to international border-gate status.

Construction is progressing rapidly on the Bat Xat–Ba Sai border bridge. The strategic bridge project officially broke ground in March 2025. Although each side is responsible for constructing the section of the bridge within its own territory, the two sides have closely coordinated and reached agreement on the overall design, technical specifications and construction methods. According to the schedule, the bridge is expected to be connected in November and officially completed in December this year. Meanwhile, infrastructure for yards and terminals, as well as the inter-agency facility at Ban Vuoc, is also being urgently prepared.

The Bat Xat–Ba Sai bridge is expected to provide a major boost to Lao Cai’s customs clearance capacity. In practice, the Kim Thanh road bridge, which has a 21-meter-wide cross-section and four lanes and has been in operation since 2012, currently handles around 1,000 vehicle trips per day. By comparison, the Bat Xat-Ba Sai bridge is designed to be 35 meters wide with six lanes and is expected to accommodate an additional 3,000-3,500 vehicles per day.

“When the capacity of the Kim Thanh bridge, the Bat Xat–Ba Sai bridge and the smart border gate model are combined, the total volume of vehicles clearing customs through Lao Cai could reach up to 5,000 vehicles per day by 2027,” Vuong Trinh Quoc said.

In addition to border infrastructure, the interregional transport network is also approaching major turning points. The standard-gauge Lao Cai-Hanoi-Hai Phong railway project has been submitted to the National Assembly for consideration of its investment policy. Once completed, the railway is expected to become a key transport artery, carrying huge volumes of cargo directly from the border gate to Lach Huyen deep-water port.

The Noi Bai-Lao Cai Expressway is also being upgraded to four lanes, helping shorten travel times. Cutting one hour off the expressway journey, combined with reduced customs clearance wait times through smart management systems and green-channel procedures, is expected to deliver significant benefits.