The high-speed rail link being planned to connect Kunming, in Yunnan province, and Vientiane will radically transform underdeveloped, landlocked Laos. The railway will not only make moving around the country, which relies on an ageing road system, far easier but will also provide crucial access to ports in neighbouring Thailand.
Much more controversial is the effect the rail line will have on Laos’ financial future. With work on the link expected to begin next year and due to be completed in 2019, it is regarded by some as further evidence of the desperately unequal nature of the relationship between Laos and its giant neighbour to the north. And as an estimated 20,000 workers prepare to move south to build the railway, many Laotians are wondering if their country is destined to become just an economic vassal of China.
“Of course, the railway will bring jobs, but we don’t know whether they’ll go to the Chinese or us,” says Galong Vue, a 53-year-old farmer, one of the thousands of people whose lives will be disrupted by the building of the line. His house and his village, Naseam Kham, are set to disappear next year to make way for a train station serving the nearby town of Oudomxai, in northwest Laos.
Travelling south from the village of Boten, where the railway will cross into Laos from Yunnan, there is already ample evidence of how China dominates the local economy. Laotian farm workers can be found packing bananas into boxes marked “Produce of China” by the side of the road close to the border, under the command of foremen from Sichuan province. The boxes are then sent north in trucks driven by men from as far away as Liaoning province, in China’s northeast.
Chinese companies own an increasing number of the rubber plantations that are the mainstay of northwest Laos’ economy. With China consuming almost four million tonnes of rubber a year – 35 per cent of the total grown in the world – Lao farmers now transport their rubber on their backs to the nearest main road rather than to a market. There it is weighed and immediately loaded onto trucks headed north, or to local Yunnan firm-owned processing plants close to the town of Luang Namtha, set to be the first major stop on the railway.
“These farmers own their land but a lot of the farms are owned by Yunnan companies now,” says a 30-year-old overseer from Jinghong, in southern Yunnan, as Laotian farmers wait to weigh their acrid-smelling crop on a simple scale and to be told how much it is worth. “We pay 6.7 yuan [HK$8.45] a kilo.”
That is far less than what was paid before the Yunnanese arrived and a source of dissatisfaction for the dwindling number of independent local rubber farmers.
“The price of rubber is dropping because so many plantations are owned by the Chinese now. Even if they don’t own the farms, they still set the price because they buy all the rubber. Seven years ago, we got 14 yuan a kilo,” says Ponesack Singpakay, a farmer’s son.
Further south, in Oudomxai, there are so many immigrants that shop signs in Chinese are almost as prevalent as those in Lao. It is estimated that about 15 per cent of the town’s population are from China and because of its proximity to the border, Oudomxai has always been home to Laotian-Chinese families. Many own businesses in the town.
Lao Lee Kui Yong is one of them, running a hotel where the prices are displayed in yuan rather than the Laotian currency, the kip.
“Eighty per cent of our customers are Chinese,” he says. “We’ve had guests connected to the railway staying here before. We expect to see an increase in the numbers of people coming from China when the railway happens. It will bring us guests from further away than Yunnan.”
Oudomxai, though, already has residents from places as distant as Guangdong province.
“I’ve been here two months now,” says 27-year-old Guangzhou native Ah Hai. A former salesman, he came to Laos to help run a shop-front gambling operation, where both Chinese and Laotians play roulette and poker on computers. “You won’t find a single Chinese person in Oudomxai who doesn’t want the railway to come. It will be much better for business because it’ll bring more Chinese here.”
The town’s market is rigidly divided into two sections. One contains Laotian traders, the other vendors from Hunan and Zhejiang provinces.
“It’s too complicated for us to be together in the same area. We’re in competition with each other,” says Vang Chantha, a Laotian trader selling cosmetics and household goods. “And they sell Chinese goods while we sell ones imported from Thailand. They sell their goods cheaper but they’re not as good quality as the ones I sell.”
He believes the railway will help his business: “It’s going to make it much easier for me to get my goods here from Thailand. At the moment, they come by road and it’s expensive and takes a long time.” Yet he is also aware that the line will increase the rivalry.
“More Chinese goods will come for sure,” says Chantha.
Like many Laotians in Oudomxai, his attitude towards the impending arrival of the railway is one of resignation; a consequence, in part, of living in a one-party state under the repressive rule of the Lao People’s Revolutionary Party (LPRP). “We can’t make any decisions because only the government does that. If the government wants it, they do it. So most Laotians aren’t concerned about the railway. The Chinese have been coming here for so long anyway that we don’t care anymore.
“The Chinese are better at marketing and selling than we are and they work harder,” says Chantha, displaying the laidback approach to life Laotians are known for.
That mentality also seems to be undermining the optimism of those qualified to take one of the few jobs for Laotians that the building of the railway will offer: that of a translator.
“I’ve thought about using my Putonghua to find work with a Chinese company when the railway comes, but I’ve decided that I’m going to be a teacher instead,” says Mee Kham, a 25-year-old university graduate.
“The Chinese work too hard and don’t speak nicely. They don’t seem to have any fun. Actually, I am scared of them.”
Yet the Chinese do not just come to Laos to work.
“We’re seeing a massive influx of middle-class Chinese driving to Laos for holidays,” says Vianney Catteau, managing director of Green Discovery Laos, a travel company with offices across the country. “They’re travelling all over northern Laos, especially to Vang Vieng and Luang Prabang. At Chinese New Year it’s crazy in Luang Prabang now. There are so many cars with Chinese licence plates it’s almost impossible to park.” Some are perhaps also keeping an eye open for business opportunities.
But despite the economic impact the railway is having in the northwest, it takes a trip to Vientiane, the Laotian capital, for the full extent of Beijing’s desire to expand its influence in Laos to become apparent.
Vietnam remains the biggest foreign investor in Laos, a result of the political ties it forged with the Pathet Lao, the LPRP’s forerunners, during the Vietnam war. But China is now the second-largest investor in the country, with more than 800 projects, worth a combined HK$31 billion.
They range from the shopping malls going up in Vientiane to dams on the Mekong River.
When Laos staged the ninth Asia-Europe Meeting in Vientiane last November, top-ranking attendees stayed in a hotel and villas that had been built by a Chinese company. The hotel is currently being refurbished for the growing number of visitors from the north and the workers doing the job are all from China and Vietnam.
“They were hired because they work much faster and harder than Laotians. Sometimes, they start work at 7am and don’t finish until 10 at night,” says a security guard at the hotel.
Now entire streets in Vientiane are dominated by Chinese shops.
Guangdong purveyors of hardware made in China are plentiful on Rue Chao Anou, in the Thong Khan Kham district. Ah Ming, 35, from Shantou, has been here for two years: “I don’t think it’s a big surprise that there are so many Chinese coming to Laos now. We’re next door to Laos, so it’s easy to live here and to get products from home.”
Nearby, the San Jiang International Market is like a miniature Chinese city, packed with thousands of mainland traders, as well as restaurants, apartments and hotels. Opened 10 years ago, it has grown rapidly and warehouses are being built to accommodate the demand for shop space.
“It’s got much bigger in the past five years,” says Li Feng, from Wenzhou, in Zhejiang, who sells cheongsams in the market.
Owned by a company based in Hangzhou, in Zhejiang, the market is home to so many vendors from the province’s manufacturing hubs of Wenzhou and Yiwu that the Zhejiang government opened an office in the market three months ago, to boost trade. The local Chinese Chamber of Commerce is located here, too.
But San Jiang is now so massive, it attracts immigrants from across China. Li Hong, 16, from Jiangxi province, is manning her parents’ shop, which sells bedding and other household goods, while they are at lunch.
“My father and mother moved here from Nanchang five years ago and I came last year,” she says. “We have two shops in the market and business is good.
“I’m trying to learn Lao because most of our customers are local people and because I’m going to stay here rather than go back to China,” says Hong. “I like Laos, apart from the food, and the people are friendly. But they do things much slower than Han people. They’re sleepy. That’s why I won’t marry a Laotian man. I don’t really know any Laotians apart from the customers anyway.”
“It’s only Chinese people who live here and own the businesses,” says a trader from Hunan. “They’re too expensive for Lao people.”
Few of the Laotian workers in the market voice any complaints, though, at being shut out from the most lucrative aspect of the market.
“I earn 1.2 million kip [HK$1,170] a month. Before, I was earning 800,000 kip in a Laotian-run shop, so this is the best job for me,” says 30-year-old Kosyabone Manivone, an assistant in a clothing store owned by a Hangzhou native. “I know local people here who have bosses who make them work very hard, but mine is OK.”
By the time the high-speed railway arrives in Vientiane, there may be more discontent among ordinary Laotians about the ever-rising number of immigrants and their domination of the construction and retail sectors in the capital. But at the moment, it is only educated Laotians who feel uneasy about what will happen in the next few years.
“There are so many Chinese people here now that I think, in the future, they will get all the good jobs. It’s already hard to find a well-paid job and it’s going to get worse,” says Somchay Somsamay, a 21-year-old business student at the National University of Laos. “We have to work harder to make ourselves better at business. But we’re still a small, developing nation and China is so big and has so many people.
“If the government keeps letting them come, this will be a Chinese town soon and not Vientiane anymore.”