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China's Big Designs On Small And Strategic Laos

Hillary Clinton's historic visit this week to Laos highlights the reality on the ground: China's influence grows bigger with each passing day. There are decidedly mixed opinions about what Beijing will bring.

Chinese stores line a village in Luang Namtha province (Prince Roy)
Chinese stores line a village in Luang Namtha province (Prince Roy)
Bruno Philip

LUANG NAMTHA – Hillary Clinton's visit to Laos this past week, as was well noted, marks the first appearance here by a U.S. Secretary of State since 1955. Clearly, it has also been noted –- particularly in Washington -- that Laos is a country under the powerful influence of Beijing.

The Chinese government has already invested $4 billion in Laos, joining Vietnam and Thailand as the country's main partners. In fact in 2011, China replaced Vietnam as the top foreign investor in the Lao People's Democratic Republic, as Laos is officially known. The country's single-party, Communist government has been in power since the victory of the "revolutionaries' in 1975.

The heightened Chinese presence brings with it a certain amount of mistrust not to say out-and-out hostility in Laos. This is typical of the ambiguity marking relations between China and southeast Asian countries, split as the latter are between the necessity of trading with the People's Republic and a natural reflex of distrust at its cumbersome proximity.

China weighs especially heavily on the shoulders of ethnically-diverse Laos, which is landlocked and under-populated. In the capital, Vientiane, an intellectual who is no fan of China says: "When the Chinese piss in the Mekong, we're the ones that drown..."

A major – and highly controversial – project involving the Chinese is the construction of a railroad line for a high-speed train that would link Kunming, the capital of the Chinese province of Yunnan, with Bangkok via Laos. The line would ensure rapid access to Malaysia and Singapore from southwestern China.

The Laotian part of the massive project is slated to be 70% financed by the Chinese, to the tune of $7 billion. The train tracks will cover a distance of 480 kilometers (298 miles), of which 200 km (124 miles) are tunnels and bridges.

In 2011, however, the project was postponed indefinitely by the Laotian government. Chinese demands may explain the postponement: they were asking for use of the land – several hundred meters worth, sometimes as much as 10 km (6 miles) -- on either side of the tracks.

A changed landscape

By using the land for farming and real estate development, the Chinese would be reimbursing themselves, and would additionally be providing jobs for thousands of Chinese workers who would descend on the suburbs of Luang Namtha, the capital of one of the provinces along the Chinese border.

Area farmers already understand what would await them once construction starts. "The railway line will cross straight through my village, then that road over there before entering a tunnel built into the mountain," says "Uncle" Kumpan, making a sweeping gesture with his arm that encompasses an asphalt road and surrounding hills and jungle-covered mountains. "And since it will run through our village, we will have to move out."

A member of the minority Kmou tribe, Kumpan is a small, frail man of 66. He lives in Ban Guen, a village in a valley where the population earns a living from salt mining. "We were told that we would be relocated over there, behind the mountain. I'm fine with that, because it means I finally get to live in a proper house with my family," says Kumpan optimistically.

In Luang Namtha, many Chinese merchants run businesses in a part of the market located near a large main street that looks like the Far Eastern version of an outpost in an American Western film. Shop-fronts with Chinese lettering are increasing all over the region. "A lot of merchants selling electrical home appliances, TVs, computers and mobile phones have come over," says Thip, a Laotian woman who is watching television in the tiny shop where she sells T-shirts.

In the "Chinese" part of the market dozens of electronics shops are huddled together. A man who gives his name as Mr. Liu says he comes from Hunan province in western China. In a mixture of Chinese and the Hunan dialect – and a bit wary of a foreigner asking him questions – he says: "Business is okay, yes..."

"The Chinese come here and buy everything we have to sell, and we buy the low-priced Chinese things they sell. The Chinese are bringing us prosperity," says Sen, a 31-year-old Hmong woman who owns 1,000 rubber trees in the neighboring hills.

In the capital, Vientiane, the increasing Chinese presence is also making waves. In 2007, the government signed an agreement with a consortium of three Chinese companies. They were to build a luxury residential complex that included a shopping mall and restaurants around a swampy area near the famous Pha That Luang Buddhist stupa, a symbol of the nation. Because some of the land belonged to party members, this caused an uproar – even in a country where the right to demonstrate doesn't exist. The upshot was that the government canceled the project in 2009.

"Some people have started to say that certain party members are selling the country down the river to the Chinese," says a Laotian businessman. "When people heard there was going to be a Chinatown in Vientiane, they didn't like it. They didn't like it at all!" laughs a high-level official. "But we'll get the project up and running again. Only this time we won't call it Chinatown!"

photo - Prince Roy

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