Transport network plays key role in keeping region connected(2)

Driving economy

In 2020, the Vientiane-Vangvieng Expressway, a key section of the Laos-China Expressway and the Kunming-Bangkok Expressway, opened to traffic. One year later in 2021, the China-Laos Railway opened. This ended Laos' history without highways and railways, marking a significant step in its infrastructure development.

The expressways and railways make Vientiane and Kunming important logistical hubs, and this has had big economic impacts, particularly with trade, said Somdeth Bodhisane, a researcher at the Institute for Industry and Commerce of Laos in Vientiane.

"The growth in international trade, especially with China, has brought tangible benefits to the people of Vientiane, including creating jobs, improving access to goods and increasing economic opportunities."

The variety of goods transported across the border has also grown, from more than 500 types to more than 3,000. The railway has handled more than 10.6 million tonnes of imported and exported goods since it opened, with a total value of more than $6.11 billion, China State Railway Group said.

The people of Vientiane are benefiting from the transportation network, Bodhisane said. It allows for the import of affordable goods from China, and Laos can export products such as bananas and cassava to China, which benefits local industries, particularly agriculture.

"There has been a significant collaboration between Vientiane and Kunming in areas such as special economic zone development and hydropower initiatives, boosting poverty alleviation, rural development and capacity-building," Bodhisane said.

The Vientiane Saysettha Development Zone, a joint project between the two governments, with Kunming and Vientiane playing key roles in attracting Chinese investment, has further strengthened economic ties.

A total of 155 enterprises from nine countries, including China, Laos, Thailand, Singapore, Japan, and South Korea, have settled in the zone. Once fully operational, it is expected to achieve an annual output exceeding $3 billion and create more than 17,000 jobs, Kunming Daily reported in early December.

Chinese companies invested in 17 projects worth $986 million in Laos last year, compared with $339 million on 30 projects in 2022, the Vientiane Times newspaper said.

Furthermore, regional economic integration has been enhanced. Both Kunming and Vientiane are key partners in the Greater Mekong Subregion Economic Cooperation Program, which aligns with the BRI's goals to improve connectivity and trade in the region, Bodhisane said.

Tounalom, the Vientiane official, said: "In recent years, collaboration between Laos and China has strengthened at all levels, from the highest to the grassroots, with significant progress in both scope and depth. … Both sides have signed strategic cooperation agreements to build long-term partnerships, establishing us as reliable partners who can depend on one another."