On the right track?

The first high-speed train and first train crosses a river in Laos. The railway line was built and financed by China through investments and loans. It took 250 structures, bridges and tunnels to link the two countries, from the Chinese city of Kunming to the Laotian capital Vientiane: the first stage in China's strategic development of the 'Silk Road' in South-East Asia.

A high-speed train crosses a river in Laos. The railway line, the first of its kind in the country, was financed by China through investments and loans.

In 2013, Chinese president Xi Jinping announced a massive infrastructure project designed to enhance Beijing’s political and economic influence throughout the world. Ten years and a trillion dollars later, leaders from the 155 countries signed up to the Belt & Road Initiative (BRI), representing almost three quarters of the world’s population, arrived in the Chinese capital for an anniversary summit. The red carpet was rolled out for guests including Vladimir Putin, on his first overseas trip since the International Criminal Court issued an arrest warrant for his alleged war crimes in Ukraine, as well as representatives of the Afghan Taliban.

Less attention was paid to the presence of Thongloun Sisoulith, the Laotian president who has been one of the BRI’s most reliable cheerleaders. According to the Chinese foreign ministry, when Sisoulith met Xi in October he “thanked China for providing Laos with precious help in its economic and social development.” The 78-year-old leader said that the “construction and successful operation of the Laos-China railway has greatly promoted the economic development of the country, and has brought positive changes to the Lao people’s life.”

Staff on the Laos-China railway walk single-file through Vientiane station, the main terminus for the Chinese-built project

Not everyone agrees, however. After French documentary photographer Laurent Weyl took a ride on the railway last year, he reached the conclusion held by some Laotian activists, that the major new piece of transport infrastructure, opened in 2021, “shows that the country is a vassal of China.” While Xi and Sisoulith present the Laos-China Railway as a BRI poster child, many in Laos view it as a symbol of the country’s debt crisis, as well as its growing reliance on the superpower to the north.

Nobody disputes that the railway is a spectacular feat of engineering. Weyl describes the 1,035km track connecting the Laotian capital Vientiane to Kunming, the capital of China’s southern Yunnan province, as a “work of art”. It’s hard not to be dazzled as the single-track railway (a double-track was deemed too technically challenging) weaves and winds across rugged, rural terrain, through the jungle and the mountainous landscape of northern Laos, using no fewer than 301 bridges and 167 tunnels. And that’s just the start. There are plans for the railway eventually to extend through Thailand, Malaysia and Singapore, connecting Laos – and China – to much of south-east Asia. “Today most maritime transport and a large part of the world economy passes through the China Sea. If tomorrow there is a conflict in the region and the area is blocked one of the possibilities would be to go through other routes, and this train which goes to Singapore was an important strategy for China,” says Weyl.

A passenger looks out of the window on the high-speed train

On his journey Weyl met 20-year-old Oum, a Laotian woman travelling with her baby to Boten to meet her Chinese husband

For some the railway has been a godsend. “I saw Laotians from the north who were travelling to towns to go to hospital, and they said that thanks to the train they could reach hospital in one or two hours instead of two days by road,” says Weyl, who has been fascinated by the geopolitics of south-east Asia ever since he began visiting Vietnam in the early 1990s, when the country opened up to the world. He says the railway has reduced the trip from Vientiane to Luang Prabang, Laos’s former royal capital and tourism hotspot, from ten hours by bus to fewer than two by rail. This upgrade on a notoriously bad road network is bringing Laotian families together, and allowing people to explore their own country as tourists. But these benefits come at a price.

Weyl explains that the railway, which cost roughly $6 billion, is 70 percent owned by Chinese state-owned companies, and that to finance its 30 percent share Laos took out loans from the Chinese state bank. “China is operating as it often does in other countries [in the BRI] – it lends money and makes the country dependent on those loans,” he says. Weyl cites Sri Lanka as an example of what can happen when BRI-backed borrowing sprees turn sour; in 2022 it defaulted on its foreign debt of $41 billion. “Sri Lanka went bankrupt because it could no longer repay the loans… because of Chinese debt and the agreements they had set up for the BRI,” says Weyl. “The same could clearly happen to Laos.”

A China Railway goods van seen from a carriage on the Laos-China railway

The economic crisis in Laos is severe. The country of just under seven million people – smaller than some Chinese cities – is almost $16 billion in debt, the equivalent of 125 percent of its GDP. Approximately half of this money is owed to China. Its people are suffering – there’s a cost-of-living crisis driven by sky-high inflation and the devaluation of the kip, the national currency, and the country imports nearly all its food and manufactured goods. Beijing has been offering Laos some short-term debt relief, allowing Vientiane to defer repayments, but it isn’t in the habit of debt forgiveness and the Chinese state bank will eventually have to be repaid.

Weyl suggests that through the BRI, China engages in a policy of ‘debt-trap diplomacy’, the theory that Beijing seduces poorer countries such as Laos with the promise of large-scale infrastructure projects but ultimately leaves them facing unsustainable debt and susceptible to Chinese pressure and influence.

Beijing rejects this narrative, describing it as a myth, and many analysts do argue that Sri Lanka’s problems were largely self-inflicted by a corrupt political class. Researchers have also found that Chinese banks have been quite flexible in restructuring loan repayments for indebted BRI countries. However, nobody believes that the BRI is a wholly benevolent project, and with developing nations taking more than $1 trillion in loans since its launch – and China becoming both the world’s biggest creditor and debt collector – the debate over Xi’s motives will continue.

There is little doubt, however, that China’s footprint in Laos is big – and getting bigger.  A number of Chinese-funded highways are under construction, as are several massive Chinese-backed hydropower dams along the Mekong river. Laos has even ceded majority control of its national power grid to a state-run Chinese firm, raising fears that if it chose to do so, Beijing could literally turn out the lights.

The first motorway in Laos has also been financed and built by China

When he was in Laos, Weyl witnessed another example of Chinese influence. He explains how Chinese demand for the root vegetable cassava resulted in Laotian farmers, keen to cash in on the lucrative crop, starting fires to quickly and cheaply clear land for cassava cultivation, despite the adverse impact on the environment. “It felt like the whole country was on fire,” he says. “And it’s not just cassava, it’s also watermelons, tangerines… Farmers often cannot choose [what they grow] because there’s strong pressure on local officials to plant the crops that China wants.”

A group eating Chinese food at an outside table in Boten, a new town on the Laotian side of the border with China, entirely financed by a Chinese government company where most of the inhabitants are Chinese.

Nowhere is Chinese influence in Laos more evident than in the Boten Special Economic Zone. Boten is technically in Laos, the site of the first train station on its side of the border, but Weyl says that it feels like you’re still in China: the dominant language is Chinese Mandarin, goods are paid for in Chinese yuan rather than the Laotian kip, and the clocks are set to Beijing time, an hour ahead of the rest of Laos. Chinese developers have built numerous high-rise residential buildings in what was until fairly recently a tiny village, but today they are largely empty. “The idea was to reach 200,000 inhabitants within 15 years, but for the moment there are only 3,000 inhabitants,” says Weyl, who describes Boten as a “ghost town”. “Cities like Boten exist everywhere in China, some of which have been completely abandoned now thanks to the property crisis.” Since the high-profile collapse of property giant Evergrande in 2021, dozens of major developers have defaulted on their debts and millions of Chinese homebuyers have found they have ploughed their savings into properties which may never be built.

The railway stations on the Laotian side of the border also reminded Weyl of the People’s Republic. “They are a direct copy of those in China,” he says. “The way they are managed is the same, the trains are in Chinese colours, the names above the stations are written in Laotian and Chinese. And the latest book by Xi Jinping is available in the stations’ shops – his image is everywhere.” He describes the experience of going through security and boarding the trains in Laos as “very militarised, regulated and organised – the Chinese model.”

A group eat outdoors in Boten, a new town on the Laotian side of the border with China, where most of
the inhabitants are Chinese

Buying food in Boten with Chinese yuan rather than the Laotian kip

While discontent over growing Chinese influence has been expressed on Laotian social media, speaking out is risky. According to US nonprofit Freedom House, the country is a “one-party state in which the ruling Lao People’s Revolutionary Party dominates all aspects of politics and harshly restricts civil liberties.” While Weyl was in the country, Laotian activist Anousa Luangsuphom was shot in the face and chest in a Vientiane cafe. On the morning Luangsuphom was attacked, he had changed the motto of his Facebook group to “Fighting for Laos’s survival, so we don’t become China’s slave”. He survived the attack but no longer publicly criticises the government, or its relationship with Beijing.

Several times a month the online Belt & Road Portal, part of Chinese state media, publishes good news stories about newly completed projects:  bridges in Croatia, cement factories in Ethiopia, football stadiums in Ghana – all funded by Chinese loans and with Chinese firms involved in the construction. Some of the stories are certainly heartwarming – a Chinese electronics firm recently completed a project to bring digital satellite TV to around 1,000 remote villages in Mozambique. Infrastructure projects are underway all over the world, although the only major western nation to sign up to the initiative during its first decade, Italy, withdrew in December 2023.

China likes to say that the BRI is accelerating economic development in poorer countries, and lifting millions of people out of poverty. And BRI megaprojects such as the railway have clearly brought benefits to ordinary people – you only need to see Laotians boarding the train to access formerly hard-to-reach medical care to realise that it’s changing some people’s lives for the better. Weyl acknowledges that “this small, reclusive country in the middle of nowhere… is the first in the region to have a high-speed train. It feeds into an image of a country that is moving forward economically and trying to develop.”

“But I am not sure that it is the Laotians who will benefit the most from the train,” Weyl continues. “It seems the main thing that will travel on it is not exported goods from Laos, but imported people from China.”

The photographer left the country sceptical about Beijing’s motives for the BRI and nervous about the future of Laos – and what it means to be so in hock to China. “Debt is a way of controlling a country,” he says.

A crew member stands in front of a door in a carriage of the train on the Laos-China railway

Posted on Friday, June 21st, 2024 - Categories: #53 - Oct-Dec 2023, App Issues.