In the Laotian border town of Boten, the arrival of a sleek, modern train on a route that connects with southern China is a sign of growing trade and tourism links between one of Southeast Asia’s poorest countries and its giant neighbor. But it also signifies a marked rise in Chinese influence in Laos, and the drawing of the country closer into Beijing’s orbit.
The 1,035-kilometer line connecting Kunming in southwest China’s Yunnan Province with the Laotian capital Vientiane opened in late 2021, although trains only started crossing the border after the lifting of COVID-19 restrictions in April 2023.
For Laos, the line is its first long-distance railway. Stops along the way include World Heritage sites such as Laos’ Luang Prabang, known for its Buddhist temples, and Puer in Yunnan, which is celebrated for its tea forests.
At present, there are just two direct passenger services a day between Vientiane and Kunming, with one running in each direction, but other trains run along the route in both countries up to the border.
Railway staff stand on the platform of Boten Station near the border with China in northern Laos on Oct. 12, 2024. (Kyodo)
In October, passengers on a train making the nearly four-hour journey from Vientiane to Boten were a mix of foreign travelers and locals. First-class and second-class cars were available, with announcements made in Laotian, Chinese and English.
In-com Suriyawong, a 63-year-old Laotian woman from Luang Namtha who requires treatment at a Vientiane hospital, said the new train that travels at a maximum speed of 160 kilometers per hour is a huge boon. “Before I had to ride a public bus and it took 24 hours. It is very convenient,” she said.
Foreign passengers were impressed, too. Ryuichi Sakata, 40, a Japanese passenger who lives in Bangkok, rated the ride as no less comfortable than a journey on a shinkansen in his home country. A Chinese traveler in the buffet car, where sausages and noodles were among the fare available, agreed it was a “very good service” matching standards in China.
A group of Thai passengers, meanwhile, were on a tour to Yunnan Province cities across the border. The train experience was a “relaxing way to enjoy the scenery,” they said. They were taking advantage of a program launched in March allowing Thais and Chinese to make visa-free short-term visits to each other’s countries. Laos and China have yet to come to a similar arrangement.
Freight trucks gather at a depot near Boten Station on Oct. 12, 2024. (Kyodo)
In Boten, many cargo trucks were carrying freight to and from a depot near the railway station. In a special economic zone near the border checkpoint, most people spoke Chinese and made cashless payments via China’s WeChat app.
China’s growing economic presence is also being felt more broadly. In Vientiane, a man who works as a driver said his daughter plans to study in China after graduating from high school. Even though many Laotian people study both English and Chinese now, “in the future, we will use Chinese more than English,” he said.
Railway staff said speaking Chinese is a prerequisite for their job. A China-funded vocational technical college opened in Vientiane last year to train personnel for the Laos-China train, the first such railway school in the country.
Chinese Premier Li Qiang, who attended regional summits in Vientiane in October, stressed the significance of the rail project during his visit, saying China is ready to work with Laos to “speed up the development” along the railway in the landlocked country.
As of September, the rail service had transported over 10 million tons of goods valued at approximately $5.74 billion. Up to early July, 222,000 cross-border passengers had traveled on the railway, according to China’s official Xinhua News Agency.
The railway has contributed to the recovery of the Laos tourism sector, which was hit hard by the pandemic. The country welcomed over 3.4 million international visitors in 2023, with the figure more than doubling from the previous year, and has set a goal of attracting 4 million overseas tourists this year.
Passengers wait inside Vientiane Station before boarding a Laos-China railway train on Oct. 12, 2024. (Kyodo)
Kenichiro Yamada, senior director at the government-linked Japan External Trade Organization’s Vientiane office, said goods transport data has exceeded planned figures in terms of volume, particularly to the benefit of Laos.
“We initially expected there would be more goods transported from China to Laos than vice versa, but we now see overwhelming Laotian shipments to China,” he said.
Key export items from Laos include minerals and agricultural goods. The country has seen a boom in mine development, with Beijing desperately seeking potassium for use as fertilizer, whose supply was disrupted by Russia’s invasion of Ukraine that started in 2022, Yamada said.
The freight services of the Laos-China railway and the State Railway of Thailand have been connected, with a transshipment platform established in Vientiane, shortening cargo travel time compared with transportation by trucks.
At the same time, however, the $5.9 billion project’s financing has placed a big burden on Laos. Beijing put up 70 percent of the funds, but it also finances most of Laos’ remaining share through loans.
The situation has raised concerns about Laos falling into a “debt trap,” in which recipient countries of Chinese investment are saddled with loans they cannot repay.
The massive debts owed by Laos for the rail and other projects have already caused the depreciation of the country’s currency the kip and led to double-digit inflation, with Vientiane seeing slower growth compared with pre-COVID levels. About half of the $10.5 billion external Laotian government debt in 2023 was owed to China.
Photo taken on Oct. 12, 2024, shows Vientiane Station on the Laos-China railway in the Laotian capital. (Kyodo)
China aims to extend the railway to Bangkok and eventually to Singapore via Malaysia as part of its Belt and Road infrastructure initiative. The outlook, however, remains dubious as it faces substantial costs to acquire land and other difficulties in becoming profitable.
Daniele Carminati, a lecturer of international relations at Thailand’s Mahidol University International College, called the prospect of having a connection to Kuala Lumpur and eventually Singapore “unlikely” and “very distant,” if not impossible.
He cited a long-running conflict in southern Thailand where Muslim groups seeking more autonomy often engage in violence. “Until this lingering and deeply rooted dispute is resolved, I doubt a safe and reliable connection can be built,” he said.
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