Laos - China Relations
China and Laos are friendly neighbors linked by mountains and rivers, and bilateral ties have been deepening and developing for the benefit of the two countries and peoples. Relations with China have traditionally consisted of trade and aid, largely in road construction in the northern provinces of Laos, without directly challenging the interests of Thailand or Vietnam in the central and southern regions.
The Chinese are not concerned about Laos' internal problems. "Non-interference" is more than a slogan to the Chinese, who are happy to leave the Lao to their own internal affairs. The Chinese are much more concerned with Laos' support on external affairs, convincing them to toe the line on several issues dear to China's heart. Laos' foreign policy more and more tracks with that of China, such as on the one-China policy. The Lao are beginning to echo the Chinese even in ASEAN.
Chinese President Xi Jinping on 23 March 2021 congratulated Lao politician Thongloun Sisoulith on election to the presidency. Xi pointed out in his congratulatory message that over the past 60 years since the establishment of diplomatic ties, the relations between the two parties and the two countries have moved forward against all odds and have been consolidated with the passing of time. The Chinese President said bilateral ties have entered a new era of building a community with a shared future with enhanced traditional friendship, strategic mutual trust and practical cooperation.
Xi said he attaches great importance to the development of China-Laos ties and stands ready with Thongloun to further consolidate and expand bilateral comprehensive strategic cooperation, enhance the well-being and friendship of the two peoples, and promote the building of the China-Laos community with a shared future to new heights.
On January 21, 2021, General Secretary of the Communist Party of China (CPC) Central Committee and President of the People's Republic of China Xi Jinping had a phone conversation with General Secretary of the Lao People's Revolutionary Party (LPRP) Central Committee Thongloun Sisoulith at the latter's request. Xi Jinping pointed out that upholding the leadership of the communist party and adhering to the socialist orientation are the essential features of China-Laos relations. At present, the China-Laos relationship is at its historical best. In the face of the combined impact of profound changes unseen in a century in the world and the global COVID-19 pandemic, China is willing to work with Laos to further strengthen high-level exchanges, enhance strategic communication and deepen experience sharing in governing the Party and country.
On January 6, 2020, President Xi Jinping met with Prime Minister Thongloun Sisoulith of Laos at the Great Hall of the People. Thongloun Sisoulith congratulated the People's Republic of China on its great historic achievements since its founding 70 years ago. He believed that under the strong leadership of the Communist Party of China (CPC) with Comrade Xi Jinping at the core, the Chinese people will definitely achieve the first centenary goal of building a moderately prosperous society in all respects on schedule. Thongloun Sisoulith offered his congratulations for the success of the fourth plenary session of the 19th CPC Central Committee, saying that China's experience in upholding and improving socialism with Chinese characteristics and modernizing governance system and capacity is worthy of studying and learning by Laos.
Laos is expected increasingly to shift toward China as Beijing is Laos’ largest debt holder, with more than 75 percent of total bilateral debt. China has a hand in many Lao infrastructure projects as part of Beijing’s Belt and Road Initiative (BRI). in 2020 Laos signed a bilateral cooperation agreement which included the country signing into the BRI “master plan”, saying that the relationship with China was a “partnership of common destiny.”
Some of the major projects Laos is building with Chinese funding include a high-speed railway between the capital Vientiane and southern Chinese city of Kunming. The railway is expected to begin operations at the end of 2021. Laos is also building large scale hydroelectric dams on the Mekong River, many with Chinese funding, as part of its controversial strategy to become the “Battery of Southeast Asia.” In September 2020, Laos asked China for a debt restructuring plan, the Financial Times reported. “Concern is growing that Laos will fall into a debt trap, in which the country will face demands from Beijing to transfer the rights to use and manage its infrastructure as security for repayment,” Nikkei Asia wrote.
Vietnam's invasion of Cambodia in December 1978 to unseat then prime minister Pol Pot, provoked China into a limited invasion of Vietnam-- approximately nineteen kilometers deep--to "teach Vietnam a lesson." Laos was caught in a dangerous bind, not wanting to further provoke China, but not able to oppose its special partner, Vietnam. The Laotian leadership survived the dilemma by making slightly delayed pronouncements in support of Vietnam after some intraparty debate and by sharply reducing diplomatic relations with China to the chargé d'affaires level--without a full break. The low point in Sino-Laotian relations came in 1979, with reports of Chinese assistance and training of Hmong resistance forces under General Vang Pao in China's Yunnan Province.
This hostile relationship gradually softened, however, and in 1989 Prime Minister Kaysone paid a state visit to Beijing. In 1991 Kaysone chose to spend his vacation in China rather than make his customary visit to the Soviet Union. Diplomatic and party-to-party relations were normalized in 1989. Trade expanded from the local sale of consumer goods to the granting of eleven investment licenses in 1991--including an automotive assembly plant. Following the establishment of the Laotian-Chinese Joint Border Committee in 1991, meetings held during 1992 resulted in an agreement delineating their common border. China's commercial investments and trade with Laos have expanded quietly, but not dramatically, in 1993 and 1994.
In 2003, Hong Kong's Fok Hing Company was granted a 30-year concession of 1,640 hectres for development of the Boten Golden City Project, the first phase of which would include infrastructure development as well as a hotel, casino, and trading center. The concession extends from the Lao-China border checkpoint along the first five kilometers of the Kunming-Bangkok (A3) Highway in Laos. The concession agreement stipulates that the company would fund the resettlement of villagers in the area and also pay the GoL two million USD per year for the concession. Beginning in mid-2005, villagers were resettled into four new villages outside the five-kilometer concession area and compensated by the investor for their dwellings.
Chinese investment, and often demographic presence, in the northern Lao provinces of Oudomxay, Luang Namtha, and Bokeo dominates visitors' impressions and still appears to be growing rapidly. While many local government officials are clearly sensitive to the appearance of being overwhelmed by the large Chinese presence, they are also pleased with the investment and want to see more. According to Government of Laos (GOL) statistics, in 2007-2008 China provided all foreign direct investment (FDI) in Luang Namtha, seventy-five percent in Oudomxay, and over fifty percent in Bokeo. The Chinese concession on the Lao side of the Luang Namtha-China border at Boten is a small extra slice of China, centered on a smoky and somewhat seedy casino offering only table games. Agricultural plantation investments, primarily rubber, are the majority of larger investments, although there is also a huge new casino in Bokeo as well as many smaller Chinese businesses selling hardware, dry goods, and filling a variety of retail niches.
"Non-interference" is more than a slogan to the Chinese, who are happy to leave the Lao to their own internal affairs. The Chinese are much more concerned with Laos' support on external affairs, convincing them to toe the line on several issues dear to China's heart. Laos' foreign policy more and more tracks with that of China, such as on the one-China policy. The Lao are beginning to echo the Chinese even in ASEAN.
The Vietnamese see corruption for what it is, a disease eating away at the vitals of their regime, and may be worried about the similar implications for corruption in the country that guards its western flank. Unlike its other neighbors, China has not historically dominated the Laotians. In the final analysis, China represents the most powerful remaining communist state to which Laos might turn for support against Thai or Vietnamese hegemony. The days of Laos-Vietnam as close as "lips and teeth" may be ending.
|
NEWSLETTER
|
| Join the GlobalSecurity.org mailing list |
|
|
|
