Laos opens Chinese built $5.9 bn belt and road railway

Well for the first time freight trains are running between the Chinese regional capital of Kunming and the Laotian capital of Vientiane.

China financed the five-year-long railway project as part of its ambitious belt and road initiative for Laos. The connection represents new opportunity but at a cost almost 6 billion dollars in debt for a poor country of around 7 million people after five years of construction. The Mammoth project is finally complete a more than one thousand kilometer long railway line connecting Southwestern China with the capital of Laos. A central part of Beijing’s belt and road initiative we believe this train route will help Laos transform from a landlocked country to a developed one.

It is the foundation of a common future for our countries and will benefit our countries and peoples as well as help promote regional connectivity stability for industry and supply chains and ultimately development and prosperity. The connection between Kudming and the Liaoshan capital of Vientiane is only the beginning. China plans to eventually extend the rail route to Singapore, Laos and other countries are taking on massive debt provided by Chinese banks to fund the infrastructure projects. Laos already had levels of debt around 50-55 percent of GDP which for a big country that has a lot of exports is something which is viable.

But for Laos it’s problematic. So, they’re already in a somewhat delicate situation and then they’re taking on this debt from the railway despite the financial risks. Many countries with developing and emerging economies signed up hoping to reap benefits surrounded by mountains. Laos is eyeing better sales opportunities for its timber industry. The rail line facilitates access to the Chinese market goods and passengers can reach Kunming in just one day. China is also opening up new markets with its belt and road initiative making more countries dependent on its economy. The West is increasingly uneasy about China’s ongoing expansion of its economic and political influence.

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