Establishing a trade and logistics cooperation mechanism for the Red River basin

The Lao Cai Department of Industry and Trade has signed a memorandum of understanding with localities in China’s Yunnan Province to strengthen Vietnam–China trade and logistics cooperation in the Red River basin.

Turning policy into concrete action

On the afternoon of 30 March 2026, at the Vietnam–China Import–Export Business Networking Conference in Kunming, Yunnan Province, China, held during a Vietnamese trade delegation’s visit, the Lao Cai Department of Industry and Trade signed a memorandum of understanding on strengthening Vietnam–China trade and logistics cooperation in the Red River basin with the commerce bureaus of Honghe, Kunming, Dali, Chuxiong, Yuxi, Pu’er and Wenshan in Yunnan Province.

The memorandum aims to implement the important shared understandings and joint statement of the senior leaders of the two Parties and countries, and to put into practice the outcomes of the annual conference between the Party secretaries of Lao Cai, Lai Chau, Tuyen Quang and Dien Bien in Vietnam and the Party secretary of Yunnan in China. It seeks to promote economic and trade development in the Red River basin and address bottlenecks in cross-border logistics, trade, customs clearance and industry.

The parties agreed to establish a Vietnam–China trade and logistics cooperation mechanism for the Red River basin. The memorandum reflects a new approach, moving from separate cooperation activities towards a cross-border trade and logistics ecosystem with active participation by government authorities and the business community.

The mechanism is based on major multilateral frameworks, including the Regional Comprehensive Economic Partnership (RCEP) and the ASEAN–China Free Trade Agreement (ACFTA), with the aim of building seamless, stable and resilient production and supply chains.

Speaking to the Industry and Trade Newspaper, Nguyen Huy Tuong, Deputy Director of the Lao Cai Department of Industry and Trade, stressed that the mechanism’s central purpose is to resolve long-standing bottlenecks in border trade, particularly logistics and customs clearance. Coordinating these stages will lower costs, shorten processing times and significantly improve the competitiveness of businesses on both sides.

A key pillar is “three-layer connectivity”: infrastructure connectivity (hard connectivity), institutional and standards connectivity (soft connectivity), and connectivity between people and businesses (heart-to-heart connectivity). This comprehensive approach goes beyond infrastructure investment to focus on harmonising regulations, strengthening trust and increasing interaction among market participants.

Improving the capacity of the Lao Cai–Hekou border crossing is seen as a breakthrough priority. The two sides agreed to promote a smart border crossing and apply digital technologies to management, monitoring and customs clearance. This is increasingly necessary as cross-border e-commerce grows rapidly and demands faster, more transparent processing.

The mechanism also seeks to develop border industrial parks as “policy laboratories” where incentive models, supply chain connections and complementary cooperation between businesses from the two countries can be tested.

Expanding practical cooperation

A leading priority is to improve trade facilitation at border crossings. The parties committed to close coordination between regulatory agencies, regular communication mechanisms and improved facilitation measures for key goods, especially fresh agricultural products, which are sensitive to time and storage conditions.

Nguyen Huy Tuong said: “Lao Cai has significant advantages in agricultural exports such as pineapples, tea, cinnamon and medicinal herbs. However, logistics and preservation remain the biggest bottlenecks. Chinese support for specialised warehouses, particularly for cinnamon essential oil products, would create clear opportunities to expand our markets.”

Alongside traditional agricultural products, the memorandum expands cooperation to higher-value goods such as medicinal herbs and processed foods. It also promotes imports of suitable Chinese products with a view to balancing trade.

For cross-border e-commerce, the two sides agreed to explore models suited to the region and promote Vietnamese–Chinese bilingual livestream training centres. Using digital platforms such as Douyin and TikTok to promote products is expected to open new sales channels, particularly for small and medium-sized enterprises.

The two sides will also pursue solutions to reduce logistics costs, optimise transport routes and promote multimodal transport combining road, rail and waterway services. Building a smart logistics platform that integrates data and services is a long-term objective.

Another important initiative is the establishment of a “Red River Basin Trade and Logistics Business Community”. This non-profit networking platform will bring together import–export companies, logistics and e-commerce businesses, and industry associations from both countries. It will provide a channel for policy feedback, helping regulatory agencies promptly identify and resolve practical difficulties.

“We expect the business community to become a driving force that turns cooperation into practical results. The state provides the framework, but businesses are the actors that operate it and make effective use of the opportunities,” Nguyen Huy Tuong said.

For implementation, the two sides agreed to hold meetings every six months to assess progress, discuss issues and adjust policies when necessary. This demonstrates the mechanism’s flexibility and adaptability amid rapid changes in the international economic environment.

The Red River basin trade and logistics cooperation mechanism could become a reference model for other border regions. Removing bottlenecks in infrastructure, institutions and costs could help the basin develop into a dynamic economic corridor deeply integrated into regional and global value chains.