Economy

How Northern Laos Is Being Swallowed By China

Thousands of Chinese are moving to Laos to benefit from an expatriation bonus. But their mass use of pesticides on banana plantations has created a serious health issue, and displacement of locals has fomented anti-Chinese sentiment.

Woman selling bananas north of Vientiane, Laos.
Woman selling bananas north of Vientiane, Laos.
Arnaud Dubus

BOKEO â€" With its casino surrounded by pseudo-Greek statues, its early century Shanghai-like neighborhood and its Beijing pagodas, the "Golden Triangle Special Economic Zone" is the most extravagant example of Chinese economic presence in northern Laos. This zone, which the Laotian government has allocated to a Chinese company for 99 years, is a Chinese enclave where people live a Beijing lifestyle and speak only Chinese.

It's a sign of the economic changes that have transformed northern Laos, on the border with China. There is a massive penetration of Chinese entrepreneurs in this country, which is one of Asia's poorest in terms of per capita income.

Chinese leaseholders

Around the cities of Luang Prabang, Oudomxay and Luang Namtha, large numbers of Laotian farmers lease their land to Chinese, who plant rubber trees, banana trees or vegetables, in most cases to export them home.

"Laotians often rent out their land to Chinese people because they think they can earn money without working," says Kalia Sompavong, a Laotian guide. But the trend is affecting many sectors.

In Luang Prabang, Laotians who ran a hotel they built with little success eventually rented it out to Chinese entrepreneurs. "I'm fully satisfied," says a Laotian woman who leased her hotel for 10 years to a Chinese man from Yunnan. "I earn more by renting it out to him, and he has contacts to bring in Chinese customers."

These aren't isolated cases. The Chinese nationals who leave to try their luck in Laos receive an expatriation bonus from the Chinese government. "If the husband leaves for Laos, he receives $100,000," says an agricultural development expert in Laos, who wishes to remain anonymous because of the sensitivity of the subject. "If his wife leaves with him, they get an extra $100,000. If a child goes with them, it's another $100,000. But they are forbidden from returning to China before a certain number of years. Their mission is to become successful entrepreneurs."

In certain districts of the Bokeo province, for instance, Chinese nationals are developing banana plantations spreading across thousands of acres on land leased from Laotians.

A serious public health issue

But the massive use of pesticides on these banana plantations has led to a serious public health issue. In the Ton Pheung district, a Laotian family sits in the bamboo hut that they use as a shelter on the banana plantation where they work. "They lost a son, aged 1 1/2, two weeks ago," says a shop owner who resupplies the camp with food every day. "The child suddenly became completely yellow. He was spitting blood and his lips were charred. The doctor said it was a liver problem."

Child in a banana plantation in northern Laos â€" Source: Marcus Wiese screenshot

In a hospital nearby, a doctor confirms that the employees of Chinese banana plantations, and especially their very young children, have been coming in sick in large numbers because of the toxic effects of the pesticides.

The problem has become sufficiently serious for the Laotian government itself to react. In late September, the Ministry of Agriculture and Forestry warned four Chinese companies to stop their "excessive use of pesticides" and ordered inspections at banana plantations in several provinces. It also banned the development of any new such plantations.

But out in the fields, things aren't so unequivocal. Chinese entrepreneurs are masters in the art of persuasion. Thanks to "little gifts," local officials often turn a blind eye. "The Chinese come to Laos partly because they no longer have enough land at home," the Laotian guide says. "Also because they've been destroying their land by flooding it with pesticides for the past 30 years. Now, they want to do the same here."

Displaced families

It's not individual Laotians who are affected by all the Chinese nationals in northern Laos. Entire communities â€" tens of thousands of families â€" have been displaced to make way for "casino zones" managed by Chinese people or dams built by Chinese companies. Though demonstrations are rare among Laotians, villagers organized a march in the Golden Triangle Special Economic Zone in July to protest their displacement.

The accumulation of tension, displacement and illness is starting to create anti-Chinese resentment in the country. Most recently, there has been major pushback over a government project to turn over one of the country's most beloved natural areas â€"the Kuang Si Falls near Luang Prabang â€" to a Chinese company. After an official document about the project was posted on Facebook, tens of thousands of Laotians protested online.

"Soon, the word "Laotian" will disappear from northern Laos, and everything will be controlled by the Chinese, because the Laotian government has sold this part of the country to China," one Laotian commentater wrote.

In the face of an avalanche of such protests, the Laotian government realized it had gone too far and decided to suspend the project. Still, so much of what has wound up in Chinese hands may never return.

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New Delhi, India: Fumigation Against Dengue Fever In New Delhi

Anne-Sophie Goninet, Jane Herbelin and Bertrand Hauger

👋 வணக்கம்*

Welcome to Thursday, where America's top general reacts to China's test of a hypersonic weapon system, Russia is forced to reimpose lockdown measures and Venice's historic gondola race is hit by a doping scandal. French daily Les Echos also offers a cautionary tale of fraud in the crypto economy.

[*Vaṇakkam, Tamil - India, Sri Lanka, Singapore]

💡  SPOTLIGHT

A dove from Hiroshima: Is Fumio Kishida tough enough to lead Japan?

Japan's new prime minister is facing the twin challenges of COVID-19 and regional tensions, and some wonder whether he can even last as long as his predecessor, who was forced out after barely one year.

When Fumio Kishida, Japan's new prime minister. introduced himself earlier this month, he announced that the three major projects of his premiership will be the control of the ongoing pandemic; a new type of capitalism; and national security.

Kishida also pledged to deal with China "as its neighbor, biggest trade partner and an important nation which Japan should continue to dialogue with."

Nothing too surprising. Still, it was a rapid turn of events that brought him to the top job, taking over for highly unpopular predecessor, Yoshihide Suga, who had suddenly announced his resignation from office.

After a fierce race, Kishida defeated Taro Kono to become the president of the ruling Liberal Democratic Party (LDP), and pave the way for the prime minister's job.

A key reason for Kishida's victory is the improving health situation, following Japan's fifth wave of the COVID pandemic that coincided with this summer's Olympic Games in Tokyo.

The best way to describe Kishida is to compare him to a sponge: not the most interesting item in a kitchen, yet it can absorb problems and clean up muck. His slogan ("Leaders exist to make other people shine") reflects well his political philosophy.

Kishida was born into a political family: His grandfather and father were both parliament members. Between the ages of six to nine, he studied in New York because of his father's work at the time. He attended the most prestigious private secondary school — the Kaisei Academy, of which about half of its graduates go to the University of Tokyo.

However, after failing three times the entrance exam, Kishida finally settled for Waseda University. Coming from a family where virtually all the men went to UTokyo, this was Kishida's first great failure in life.

After he graduated from college, Kishida worked for five years in a bank before serving as secretary for his father, Fumitake Kishida. In 1992, his father suddenly died at the age of 65. The following year, Kishida inherited his father's legacy to be elected as a member of the House of Representatives for the Hiroshima constituency. Since then, he has been elected successfully nine straight times, and served as Shinzo Abe's foreign minister for four years, beginning in December 2012. A former subordinate of his from that time commented on Kishida:

"If we are to sum him up in one sentence, he is an excellent actor. Whenever he was meeting his peers from other countries, we would remind him what should be emphasized, or when a firm, unyielding 'No' was necessary, and so on ... At the meetings, he would then put on his best show, just like an actor."

According to some insiders, during this period as foreign minister, his toughest stance was on nuclear weapons. This is due to the fact that his family hails from Hiroshima.

In 2016, following his suggestion, the G7 Ise-Shima Summit was held in Hiroshima, which meant that President Barack Obama visited the city — the first visit by a U.S. president to Hiroshima, where 118,661 lives were annihilated by the U.S. atomic bomb.

In September 2020 when Shinzo Abe stepped down as prime minister, Kishida put out his candidacy for the first time for LDP's presidency. He didn't even get close. This was his second great failure.

But reading his biography, Kishida Vision, I must say that besides the two aforementioned hiccups, Kishida's life has been smooth sailing over the past 64 years.

When one has had a happy and easy life, one tends to think that human nature is fundamentally good. Yet, the world doesn't work like that. And Japanese tend to believe that "human nature is vice," and have always felt a bit uneasy with the dovish Kishida diplomacy when he was foreign minister.

Hiroshima has always been a city with a leftist political tradition. Kishida's character, coupled with the fact that he belongs to the moderate Kochikai faction within the LDP, inevitably means that he won't be a right-wing prime minister.

Kishida would never have the courage to be engaged in any military action alongside Japan's ally, the United States, nor will he set off to rewrite the country's constitution.

So after barely a year of Yoshihide Suga in office, how long will a Fumio Kishida government last? If Japan can maintain its relatively stable health situation for some time, it could be a while. But if COVID comes roaring back, and the winter brings a sixth wave of the pandemic as virtually all Japanese experts in infectious diseases have predicted, then Kishida may just end up like Suga. No sponge can clean up that mess.

Daisuke Kondo / Economic Observer

🌎  7 THINGS TO KNOW RIGHT NOW

Top U.S. general says Chinese weapon nearly a "Sputnik moment": China recently conducted a "very concerning" test of a hypersonic weapon system as part of its push to expand space and military technologies, Gen. Mark Milley, the U.S. Chairman of the Joint Chiefs of Staff, told Bloomberg News. America's top military officer said that this was akin to the Soviet Union's stunning launch of the world's first satellite, Sputnik, 1957, which sparked the Cold War space race. Milley also called the test of the weapon "a very significant technological event" that is just one element of China's military capabilities.

Brexit: France seizes British trawler: A British trawler has been seized by France while fishing in French waters without a license, amid escalating conflict over post-Brexit fishing rights. France's Minister for Europe said it will adopt a zero-tolerance attitude towards Britain and block access to virtually all of its boats until it awards licenses to French fishermen.

COVID update: Russia confirmed a new record of coronavirus deaths, forcing officials to reimpose some lockdown measures, including a nationwide workplace shutdown in the first week of November. Germany also saw its numbers spike, with more than 28,000 new infections yesterday, adding to worries about restrictions this winter there and elsewhere in Europe. Singapore, meanwhile, reported the biggest surge in the city-state since the coronavirus pandemic began. Positive news on the vaccine front, as U.S. pharmaceutical giant Merck granted royalty-free license for a COVID-19 antiviral pill to help protect people in the developing world.

Iran nuclear talks to resume: Iran's top nuclear negotiator said multilateral talks in Vienna with world powers about its nuclear development program will resume before the end of November. The announcement comes after the U.S. warned efforts to revive the deal were in "critical phase."

First U.S. passport with "X" gender marker: The U.S. State Department has issued its first American passport with an "X" gender marker. It is designed to give nonbinary, intersex and gender-nonconforming people a marker other than male or female on their travel document. Several other countries, including Canada, Argentina and Nepal, already offer the same option.

China limits construction of super skyscrapers: China has restricted smaller cities in the country from building extremely tall skyscrapers, as part of a larger bid to crack down on wasteful vanity projects by local governments. Earlier this year the country issued a ban on "ugly architecture."

Doping scandal hits Venice's gondola race: For the first time in the history of the Venice Historical Regatta, a participant has tested positive to marijuana in a doping test: Gondolier Renato Busetto, who finished the race in second place, will be suspended for 13 months.

🗞️  FRONT PAGE

"End of the ice age," titles German-language Luxembourgish daily Luxemburger Wort, writing about how the ice melting in the Arctic opens up new economic opportunities with a new passage for countries like Russia and China but with potentially devastating effects for the environment. The issue of the Arctic is one of the topics that will be discussed at the COP26 Climate Change Conference which kicks off in Glasgow on Sunday.


#️⃣  BY THE NUMBERS

$87 billion

A new United Nations report found that extreme weather events such as tropical cyclones, floods and droughts have caused India an average annual loss of about $87 billion in 2020. India is among the countries which suffered the most from weather hazards this year along with China and Japan.

📰  STORY OF THE DAY

Air Next: How a crypto scam collapsed on a single spelling mistake

It is today a proven fraud, nailed by the French stock market watchdog: Air Next resorted to a full range of dubious practices to raise money for a blockchain-powered e-commerce app. But the simplest of errors exposed the scam and limited the damage to investors. A cautionary tale for the crypto economy from Laurence Boisseau in Paris-based daily Les Echos.

📲 The story began last February, when Air Next registered with the Paris Commercial Court. The new company stated it was developing an application that would allow the purchase of airline tickets by using cryptocurrency, at unbeatable prices and with an automatic guarantee in case of cancellation or delay, via a "smart contract" system. Last summer, Air Next started recruiting. The company also wanted to raise money to have the assets on hand to allow passenger compensation.

📝 On Sept. 30, the AMF issued an alert, by way of a press release, on the risks of fraud associated with the ICO, as it suspected some documents to be forgeries. For employees of the new company, it was a brutal wake-up call. They quickly understood that they had been duped, that they'd bet on the proverbial house of cards. Challenged by one of his employees on Telegram, the CEO admitted that "many documents provided were false", that "an error cost the life of this project."

⚠️ What was the "error" he was referring to? A typo in the name of the would-be bank backing the startup. A very small one, at the bottom of the page of the false bank certificate, where the name "Edmond de Rothschild" is misspelled "Edemond". Before the AMF's public alert, websites specializing in crypto-assets had already noted certain inconsistencies. The company had declared a share capital of 1 billion euros, which is an enormous amount. Air Next's CEO also boasted about having discovered bitcoin at a time when only a few geeks knew about cryptocurrency.


➡️ Read more on Worldcrunch.com


📣 VERBATIM

"A weapon was handed to Mr. Baldwin. The weapon is functional, and fired a live round."


— Following the Oct. 21 on-set shooting death of cinematographer Halyna Hutchins, Sante Fe County Sheriff Adan Mendoza told a press conference that the "facts are clear" about the final moments before Hutchins was shot. The investigation continues to determine what led up to that moment, and any possible criminal responsibility related to how the "prop" gun that actor Alec Baldwin fired was loaded.

📸  PHOTO DU JOUR

Fumigation is used as a precautionary measure against the spread of dengue disease in New Delhi, India, where more than 1,000 cases have been reported — Photo: Naveen Sharma/SOPA Images/ZUMA

✍️ Newsletter by Anne-Sophie Goninet, Jane Herbelin and Bertrand Hauger

Share with us your favorite gondola memories or worst crypto scams — and let us know what the news looks like from your corner of the world! - info@worldcrunch.com

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