The Importance of the China Laos Railway Development

I am currently in Vientiane, the capital of Laos. It’s three years since I was last in Laos and one of the first things that I noticed is the large number of Chinese tourists, ahead of the Chinese New Year. A trekking guide in Luang Prabang, the UNESCO heritage approved town, who was born on the Chinese border, boasted of many Chinese clients and told me that the Chinese like to travel in large groups and frequently by road across the border. Soon the Chinese will swarm across South East Asia in increasing numbers but by rail. Chinese consumers can be demanding posing major challenges but they are big spenders.

China is financing the important rail link with Laos. For a summary of the related news open this link.

I have travelled extensively in Eastern and South-Eastern Asia, including to Southern China and Tibet. Putting political considerations aside, the soft loans from China for infrastructure projects are massively important for developing the economy. I have witnessed first-hand the benefits of Chinese infrastructure investment in Tibet. By comparison, I have seen Asian economies that have developed without infrastructure investment and there are deep scars.

In international terms of GDP per head, Laos is a poor country but it has a rich cultural heritage and is incredibly beautiful, with 75% of the country covered by forests and jungle in rugged mountains. Rapid economic growth will change Laos. Let’s hope that the best of Laos can be preserved for both the Lao people and visitors alike.

Eventually, Southern China will be linked by rail to Thailand and Singapore. In terms of geopolitics, one is reminded that China is increasing her reach. Sadly, visitors to South East Asia quickly see the scars of the colonial years and of the American post-colonial years.

This leaves me with two interesting open questions:

  1. Why can’t the global financial system provide infrastructure investment for developing countries?
  2. Why don’t Western countries match China will soft loans to developing countries for infrastructure investment?

Thoughts?

 

2 responses

  1. HI there Dr Alf. While I really enjoyed reading your post, alas I am always scratching my head as to why Western countries take such an opposite approach. It’s been refreshing reading about China in a positive light for once. It seems very easy to go jumping on the anti-China bandwagon but really China works with other countries rather than placing demands on them. Thanks for a great post.

  2. The short answer to Dr Alf’s incisive post is that they can but that they take a short term view.

    Western governments and plutocrats are prepared to invest in what they see as a short-term “sure things” like China itself and companies in prosperous parts of it or in technology firms that offer high returns.

    The Chinese invest in long-term potential in African countries which are growing very fast from a low base and in countries immediately surrounding them, like Laos where Dr Alf now is, and Cambodia which he has visited before.

    That long-term view is based on the concept of the “Blending of the Five Colours” and is hundreds of years into the future, whereas with a Western viewpoint you are lucky to get even a 20-year view.

    The Bible gives us the right perspective when it says “The meek shall inherit the earth”, meek does not mean humble in the King James 1st English it was translated into, rather it means” Many”.

    Westerners who are white are few and not many, so if we carry on as we have been we will “inherit” very little.

    The Chinese follow these policies of swarming out and investing for the long haul to ensure food security and as a means of increasing their soft power by binding these countries more tightly into the Chinese orbit and “gravitational pull”.

    This creates a buffer zone around China in its landlocked areas and a series of countries with which it can form military alliances over time whilst trading with them now or getting them into a position where they can trade in the medium term.

    Western leaders are, as Donald Trump accurately points out, for the most part, extremely stupid people who are not competent.

    Angela Merkel is an exception but has badly bungled the approach to refugee influxes.

    The Chinese take a similar view when they talk of people like Obama and others as “children playing in a sandpit”.

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