Scholar says China-Laos railway links Laos to global, regional supply chains
By Li Xiaoyao

The newly opened China-Laos railway provides Laos with a land link to global and regional supply chains, a political science scholar said on Friday.

"The China-Laos railway is an integral part of the Belt and Road Initiative's key infrastructure network, which may contribute to the interconnection and economic cooperation between China and not only Laos but also the ASEAN (Association of Southeast Asian Nations) countries," Yin Chengzhi, the associate professor at the School of Public Policy and Management of Tsinghua University, told CGTN.

Laos is a landlocked country with vast mountainous territories that had no access to the sea for a long time. These geographical barriers and undeveloped transportation infrastructure restricted its economic growth and cooperation with other ASEAN countries. 

With direct passenger and freight transportation from southwest China's Yunnan Province's capital, Kunming, to Vientiane, the capital of Laos, the railway is the most efficient infrastructure connection between China and ASEAN economies, said Yin.

According to a report released by the World Bank in June, the China-Laos railway is expected to "increase aggregate income in Laos by up to 21 percent over the long term." 

In addition, the transit trade through Laos along the railway corridor "could reach an estimated 3.9 million tonnes per year by 2030, which would include a shift of an estimated 1.5 million tonnes of trade from maritime transport to the railway," said the report.

Facilitate China-Laos cross border trade

"The operation of the railway highlights the regional pivotal role of Kunming," said Yin. "Thereby, [it will] promote the economic development of southwestern provinces in China."

By June this year, Laos had set up more than 10 enterprises in Yunnan Province, and Yunnan had set up more than 280 in Laos, reported local media Kaiping News. 

According to World Bank estimates, the railway could reduce land transport prices by 40-50 percent between Kunming and Vientiane, which would benefit bilateral cooperation between the two countries.

Yin said the railway would increase the export of agriculture products from Laos to China and improve its farmers' incomes.

Hunan Xuanye Ecological Agricultural, a Chinese company, is building a modern agricultural park with the Laos Ministry of Agriculture and Forestry, only two kilometers away from Vientiane Station, according to a report by the Newspaper of China Discipline Inspection and Supervision.

The park is expected to export 3 million tonnes of agricultural products to China annually by 2025, with an annual export value of over $4 billion, reported the newspaper, citing Xu Guowu, the chairman of the company.

"It will increase Laos' fiscal revenue by $170 million every year and help 330,000 farmers in Laos to get rid of poverty through employment."

The China-Laos railway under construction, November 19, 2020. /CFP

The China-Laos railway under construction, November 19, 2020. /CFP

Benefit tourism sector

The China-Laos railway also helps Laos to attract international tourists, said Yin.

The World Bank report shows that Laos' tourism industry could benefit from an increase in demand for passenger rail traffic, which is expected to account for the majority of train traffic by 2030. 

The railway will also benefit China's tourism sector. According to Kaiping News, citing an official from the Yunnan Provincial Department of Culture and Tourism, the province plans to highlight the regional cultural characteristics and make better use of the railway system. 

It also aims to integrate the rich tourism resources along the China-Laos railway to create distinctive cross-border tourism railway products to attract more international visitors, Kaiping News said.

(Edited by Wang Tianyu)

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