Laos-China High Speed Railway to Open

The Laos-China high speed railway will officially open today.

Part of China’s Belt and Road Initiative, the railway will link the Laotian capital Vientiane to Kunming—the capital of China’s Yunnan province. This is the first completed link in Beijing’s Pan-Asia Railway Network, which looks to boost trade and economic growth by connecting Southeast Asia to China’s landlocked southern provinces. The completion of the route is expected to bring significant economic benefits to Laos by lowering the cost of exports and consumer goods, while improving foreign investment and tourism from China.

In the process of constructing the railway, Laos has incurred an estimated $1.5 billion debt to China, leading Laos to cede majority control of its power grid last year. Therefore, the project can be seen as a long-term extension of China’s ‘debt diplomacy’ strategy, inundating developing countries with unsustainable debt with to increase their dependency on China.

The completion of the Laos route is critical to China’s plans as several projects in Vietnam and Myanmar have been delayed due to geopolitical tensions and environmental concerns. Despite the implications of debt-trap diplomacy, expect other states to streamline government approval for infrastructure projects in the medium-term as economic recovery concerns outweigh Chinese regional control.