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Last Updated: Friday, 14 December 2007, 13:37 GMT
Vietnam-to-China road to be built
A dock on the border of Vietnam and China where goods are transported
The new highway will increase trade between Vietnam and China
Vietnam will get a $1.1bn (542m) loan from the Asian Development Bank (ADB) to build a highway linking its capital Hanoi with mainland China.

Once the highway is completed in 2012, drivers will be able to make the trip in less than one day, reducing the time from two or even three days.

The ADB said the project would help stimulate the economy in Vietnam's poor north-west region.

The poverty-fighting body added the loan was the biggest in its history.

Vietnam's economy has been rapidly expanding over the past decade as the communist government has supported free market policies, but development has tended to cluster around the country's urban centres and port cities.

The ADB said that the reduced travel time would increase employment opportunities in Vietnam's north-west region, where communities have not been able to join in the country's new prosperity.

"Vietnam needs modern highways to help remove the country's transportation bottlenecks, accelerate economic growth and ultimately expand economic opportunity for Vietnamese families," said John Cooney, a director of the ADB.

Cross-border benefits

The 244km (151 mile) highway will stretch from Hanoi to Lao Cai, on Vietnam's border with China's Yunnan province.

It will operate as a toll road, with analysts predicting that it will generate sufficient revenue to recover the entire loan within its first 10 years of operation.

Bank officials say it will increase Vietnam's ability to export agricultural and maritime products to China.

At the same time, Chinese exporters will benefit from a faster route to global markets as Vietnam's Hai Phong and Cai Lan ports are significantly closer to Kunming, the capital of Yunnan, than the Chinese port that they currently use.

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