Laos-China Railway to Open Despite Debts to Beijing

A high-speed $5.9 billion Chinese-built railway linking China to Laos would officially open on Friday, despite the potential risk of mounting debt.

Laotian leaders hoped the railway would boost their isolated economy by linking it to China and markets as far away as Europe.

“The railway has turned Laos’ disadvantage as a landlocked nation into an advantage,” Lao National Chamber of Commerce and Industry Vice-President Valy Vetsapong said, expecting a logistics and export boom.

“Laos used to pay high freight prices, but now we’re going to be transporting freight ourselves… we will become an investment battlefield for surrounding countries all because of the railway,” Vetsapong added.

However, some foreign experts said the potential benefits to Laos beyond serving as a channel for Chinese trade were unclear, and the cost appears dangerously high.

“The railway would generate very positive economic returns for China and possibly other countries, but it is harder to see exactly what the economic benefits are going to be for Laos,” Center for Global Development in Washington expert Scott Morris said.

Morris added that the railway had only 21 stations in the country, a design that would serve the Chinese needs to reach foreign ports quickly and not rural Laos, or it would have more stations to connect farmers to markets.

“This is essentially a Chinese public infrastructure project that happens to exist in another country,” Morris said.

The Kunming-Vientiane 260-mile railway would be operated by the Laos-China Railway Co., with borrowed money of about 60% of the railway’s investment. 

© Fourth Estate® — All Rights Reserved.
This material may not be published, broadcast, rewritten or redistributed.