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Trade & Investment

China will finance Laos rail link

Trucks transporting timber toward the Laos-Chinese border, where Chinese workers are carrying out drilling works in preparation of building a railway linking China to Laos.

Laotian officials announced Thursday that China and Laos have agreed on a railway project that would cross the Laotian highlands to the Chinese border.

The Wall Street Journal reports: “Laos’s Energy and Mining Minister Soulivong Dalavong said in an interview that under the new agreement, which is expected to be signed within days, Chinese banks will provide financing to build a 418-kilometer rail link from the capital Vientiane to the Chinese border…

“In return for financing the project, China will secure supply of around 5 million tons a year of mineral resources, mainly potash, by 2020, along with other raw materials such as timber and agricultural products that may be shipped to China, Mr Dalavong said.”

In the “Game of Thrones”, Beijing was dealt a serious blow when Myanmar’s president canceled plans for a massive China-financed dam and then announced a series of reforms that would free the country from Western sanctions and welcome it back into the mainstream global economy. Japan, the United States, and investors from other countries have since jumped into Myanmar at China’s expense.

Yet China still has its allies in Laos and Cambodia. Sri Lanka, irked when India, a traditional ally, insisted that Colombo investigate alleged war crimes, has swung toward China as well.

“Everyone is selling to China, so why shouldn’t we do the same?” Dalavong told the WSJ. For China, with its insatiable appetite for raw materials, Laos’s promising natural resources and its limited export avenues offer a promising opportunity.

Originally published on Living In Phnom Penh

About Political Atheist

Living in South East Asia (Vietnam & Cambodia). At the ending/starting point of the more than 1000 year old SIlk Road.

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