Volkswacht Bodensee - Vietnam, China to expand rail links, cross-border payments

The signings followed a meeting between Vietnamese Prime Minister Pham Minh Chinh and visiting Chinese Premier Li Qiang.

They agreed to work on a technical plan for a rail link between Lao Cai in northern Vietnam and Hekou in China's Yunnan province.

The two sides also signed a memorandum of understanding (MoU) on the implementation of cross-border payment services via QR codes and an agreement to study a model for an "economic cooperation zone" across their border.

China is Vietnam's biggest trade partner, but the two countries share historic tensions -- including in the South China Sea, a waterway through which trillions of dollars of trade pass each year.

Vietnam's top leader To Lam and Li agreed on Saturday to boost defence and economic cooperation, Vietnamese state media reported.

The two agreed to "maintain regular high-level exchanges and cooperation in defence, security, and foreign affairs... expanding the implementation of new mechanisms", the Nhan Dan newspaper said.

Vietnam would facilitate more high-tech Chinese investment in the country and Beijing would strengthen market access for Vietnamese agricultural products, the newspaper said.

Tensions have flared recently between the two nations over territorial claims in the South China Sea.

China has for years sought to expand its presence in contested areas of the sea, brushing aside an international ruling that its claim to most of the waterway has no legal basis.

Hanoi protested last week what it said was a "brutal" attack by Chinese vessels on Vietnamese fishermen in a disputed area of the sea.

At Saturday's meeting Vietnam's Lam "urged both parties to... better manage and resolve differences" in maritime issues, the Nhan Dan newspaper said.

Lam took office in early August as general secretary following the death of his predecessor, Nguyen Phu Trong.

He later met Chinese President Xi Jinping in Beijing during his first overseas trip.

M.Betschart--VB