Laos’ first ever high-speed railway receives blessing of religious groups on Thursday and is expected to deliver improved connectivity that will create more business opportunities and transform the landlocked country.
The China-Laos railway, scheduled for official opening on Friday, is a docking project between the China-proposed Belt and Road Initiative and Laos’ strategy to convert itself from a landlocked country to a land-linked hub.
To coincide with the Lao National Day, a religious ceremony for the railway’s inauguration was held at the newly built train station in Laos’ capital Vientiane. The ceremony was joined by Lao Prime Minister Phankham Viphavanh and other senior officials.
The electrified passenger and cargo railway connects Kunming of Southwest China’s Yunnan province to Vientiane, with a total length of 1,035 kilometers, according to Xinhua News Agency.
Construction of the railway commenced in December 2016, with the full application of Chinese management and technical standards. It is scheduled to begin formal operations on Dec 3. Chinese President Xi Jinping and Lao President Thongloun Sisoulith are set to jointly witness its opening at a virtual ceremony.
“The improvement of infrastructure will serve as a driving force to boost socioeconomic development in Laos in the coming years,” Thongloun said in a speech marking the 46th anniversary of the establishment of Laos on Dec 2, as quoted by local media Vientiane Times.
With a designed speed of 160 kilometers per hour, the railway will shorten travel between Vientiane and the China-Laos border from 2 days to 3 hours.
The railway link could reduce transport costs between Kunming and Vientiane by 40-50 percent, a reduction of about $30 per metric ton, according to a report released by the World Bank last year. The reduction of domestic transport costs within Laos is expected to be around 20-40 percent.
Phouphet Kyophilavong, associate professor and dean of the Faculty of Economics and Business Management at the National University of Laos in Vientiane, told China Daily he is “really happy” that the railway was completed on time, which is well establishes that China’s Belt and Road Initiative can be implemented well.
Noting the project was completed as scheduled despite challenges brought by the COVID-19 pandemic, Kyophilavong said he hopes it can bring Laos more benefits, not only for its economic growth but also for poverty alleviation.
Though more policy support is needed for trade facilitation on both tariff and non-tariff barriers, Kyophilavong said he expects the railway to create more potential for the Lao business sector. He said Laos should also open up more to welcome investors from China and other countries to set up joint ventures, which will also create more job opportunities for the local people.
Tee Chee Seng, general manager of Savan Park, said the railway between China and Laos will provide a new and convenient logistics route for trade and turn the Southeast Asian country into a regional connector.
Savan Park is a joint venture between the Lao government and Malaysian company Pacific Streams Development to develop a commercial and logistics hub for Laos by building the country’s first special economic zone. Around 70 companies from countries including China, Thailand, Japan, Australia, and the United States have invested in the zone.
“When the China-Laos railway is launched on Dec 3, we will send all the goods to Kunming from Vientiane and transit to our special economic zone,” said Tee, noting the company used to depend on sea freight, which could take days to transport. The railway can shorten transit time to just 10 hours, he said.
The railway “will not only benefits investors in the park, but will also benefit manufacturing companies in Bangladesh, Cambodia, Malaysia and Singapore. There is a linkage,” said Tee, adding that his company will also work to expand its warehouse and logistics capacity to better facilitate the flow of goods between China and Southeast Asian countries.
Experts believe benefits from the China-Laos railway will extend beyond the two countries as it forms an important section of a proposed pan-Asia railway network which, once completed, will further connect China and Southeast Asia.
Southeast Asian countries have long desired to connect to each other as well as to China, which now has the capital, technology and expertise to work with its neighbors to realize this vision, said David Lampton, senior fellow at the Foreign Policy Institute of Johns Hopkins School of Advanced International Studies and former president of the National Committee of US-China Relations in New York.
Thailand’s Bangkok Post reported on Dec 1 that the Thai government is being advised to accelerate efforts to link the country’s rail system with the China-Laos railway, citing comments by Danucha Pichayanan, secretary-general of Thailand’s National Economic and Social Development Council.
“Opening the high-speed rail line in Laos is a key step in realizing this vision because it runs down the spine of Southeast Asia,” said Lampton, who is a co-author of the book Rivers of Iron: Railroads and Chinese Power in Southeast Asia.
Noting the overall idea for development is that it is easier to get rich in a regional neighborhood where everyone is prospering, Lampton told China Daily that the completion of the China-Laos railway is “an important moment in this evolution”, and that he expects subsequent links involving Thailand, Malaysia and perhaps Singapore to emerge over time.
In terms of policy support to ensure the success of the China-Laos railway, Lampton also said it is important to work closely with the local communities, move ahead the extension of the railway link, and cooperate with both local and international companies.