By Beth Main.
20,000 Chinese workers will soon arrive in Northern Laos to start construction on a new 260 mile railroad that will link China to Southeast Asia. The new railroad will run from Kunming, the capital of Yunnan province, through Vientiane to Bangkok and on to Dawei in Burma.
The railroad will tighten trade links between China and Southeast Asia, open up the massive market potential of Bangkok and provide an alternative route to transport oil from the Middle East to China, further adding to China’s seemingly endless economic growth.
China is set to benefit enormously from the project while Laos will suffer all the cost of construction and the associated damage to its countryside and environment. The Chinese are lending Laos the $7 billion for the railway which will significantly expand China’s already enormous trade with Southeast Asia. This is nearly equal to the $8 billion in annual economic activity in Laos.
The plans for the railroad have run into some serious objections, including a highly critical report on the project by a consultant for the United Nations Development Program. The report said that the terms of the loan from China’s Export-Import Bank were so onerous they put Laos’s “macroeconomic stability in danger.”
The railroad also somewhat negates Southeast Asian countries’ recent spending on defense as China literally paves its way into the area.