Nonetheless, the National Assembly has approved the project as the nation’s part in the much broader trans-Asian rail agreement signed by nearly 20 Asian countries in 2006. While the workings of the communist party that runs Laos are extremely opaque, diplomats here said, the project is most strongly backed by the pro-China Laotion Deputy Prime Minister Somsavat Lengsavad. Efforts to interview Somsavat were unsuccessful.
China’s exploding trade with Southeast Asia reached nearly US$370 billion in 2011, double that of the US in the same year. By 2015, when the Southeast Asian countries aim to have completed an economic community, China projects that its trade with the region will equal about US$500 billion.
Even as it exports a variety of goods to the region, China relies on imports from its neighbors in Southeast Asia — natural resources and intermediate goods — to fuel its export machine, said Yolanda Fernandez Lommen, principal economist for the Asian Development Bank in Beijing.
The European Community, the US and Japan are still China’s largest trading partners, she said, but “Southeast Asia is geostrategically and economically important to China, an increasingly important partner from both the trade and investment perspectives.”
Laos offers a perfect launching pad for China’s stepped-up regional ambitions. China has poured new investments into the capital, including dozens of luxurious villas built on the banks of the Mekong River to house the European and Asian leaders who attended the November summit meeting.
A fancy new convention hall, part of a new complex called Vientiane New World, gives a 21st century veneer to the shabby capital. In Luang Prabang, a popular tourist destination through which the railroad will run, China has built hospitals and upgraded the airport.
Some Laotians, unhappy with the unmistakable Chinese presence, complain that their country is becoming little more than a province of China or, more slyly, a vassal state.
Veterans of the Pathet Lao, the guerrilla movement that fought alongside North Vietnam during the Vietnam War, dominate a government that keeps its distance from Washington. US Secretary of State Hillary Rodham Clinton visited in July last year, the first visit by the US’ top diplomat since the 1950s. The move came as part of US President Barack Obama’s administration’s effort to forge stronger economic and military ties in the region as a counterweight to China.
In Laos, opposition to government policies is often squelched. The director of Helvetas, a Swiss development organization, was expelled on 48 hours notice last month, accused of an unfriendly attitude to the government. The director, Anne-Sophie Gindroz, had raised the issue of the government’s forcing peasants to sell their land at very low prices, a practice that is now seen as mainly serving the interests of Chinese-financed developers.
In Vientiane, the well-known Laotian director of a civil society group, the Participatory Development Training Center, disappeared last month after taking part in a People’s Forum where land issues were discussed on the sidelines of the November summit meeting. Diplomats said the director, Sombath Somphone, appeared to be in police custody.