Belt and Road
China-Laos Railway: Make the dream of a national logistics hub in Laos come true
Seetao 2022-08-06 08:55
  • Laos dreams of becoming a logistics hub in Southeast Asia, and the China-Laos railway opening in 2021 is helping Laos realize this dream
  • The series of achievements made by the China-Laos Railway are not only the crystallization of the common wisdom of the people of China and Laos, but will also become a valuable asset for the world's railway construction
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Geographically, Laos is sandwiched between countries, but can provide China with access to Thailand and its seaports. Laos also dreams of becoming a logistics hub in Southeast Asia. The China-Laos railway, which opens in 2021, makes it easier for people and goods to reach Laos from China: it can connect Vientiane and Kunming. Although there are still few Chinese tourists, its appeal is growing, especially from Monday to Friday.

On the trains, Laotians returning from the north to their weddings can be seen in full costumes, and possibly with boxes of rice wine. By car, the journey takes at least two days round-trip. We can also see some young people from Mangsai in the northern region taking their father to Vientiane to see a doctor.

At many passenger stations in Laos of the railway line, you can see some industrial parks that have been delineated to be built. The World Bank and the International Fund for Agricultural Development have also funded projects, one of which is to improve the road network to the train station.

"The railway has brought Laos an incredible link to the Chinese market: trucks transport the goods to the railway station and then to China," said Frank Khosang, a technical advisor to the Lao Ministry of Agriculture's International Agricultural Development Fund project. In 2019, before the outbreak, Laos welcomed millions of Chinese tourists.

If borders are fully opened, through new railways and highways under construction, the number of Chinese tourists could grow significantly. The expressway under construction will start in 2020. The first section will connect Vientiane and Vang Vieng. The contractor is also a Chinese company.

Boden in northern Laos, near the Chinese border, is now a beneficiary of a new railway because of its location: it has become a new city, with more than 30 buildings of 20 to 30 floors under construction. Chinese construction companies believe that with the influx of Chinese businessmen, the city's population may reach 300,000 by 2035. Different from the "Golden Triangle" special economic zone at the junction of China, Myanmar and Thailand, Boding has become an integral part of the "cross-border free trade zone" due to the Belt and Road Initiative.

Long before the opening of the China-Laos railway, Laos' efforts to become a logistics hub had already begun: in Savannakhet, an important Laos city in the south near the Laos-Thailand border, Jean-Pierre Grercic, owner of a French logistics company, An inland port was created in 2016, and in 2021 the volume of transit trade has already reached $9 billion. From here, trucks can travel by highway to Lan Chabang, Thailand in the west, and Da Nang, Vietnam in the east, and then the goods can reach the Chinese port.

"Between Laos and China, the railway has only recently been built and it will take time to get in," said Gzhelchik. "It is more suitable to transport ore, cassava, rubber, etc. by railway, but for other products, trucks are more suitable. Competitive and more flexible.”

Now Savannakhet has become an important industrial center in Laos, and there is an industrial park jointly held by Gzhelchik, the Lao government and a Malaysian company. It has hosted dozens of factories in recent years, including Essilor Optical Co Ltd and some technology and chip factories, where Nike will manufacture women's sportswear. "More and more factories in Thailand will be relocated to Laos in order to obtain the 'Made in Laos' label and take advantage of cheaper labor and electricity," said the head of the industrial park.

Laos wants to change its position in trade: At Vientiane's new inland port, some trucks with Thai license plates are waiting to load containers from China. The park, which has just started business, is located on the extension line of the China-Laos high-speed railway.Editor/Ma Xue

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