China moves into laid-back Laos
By Nga Pham
BBC News, Vientiane


A fast-growing Chinese presence is one of the most striking features in Laos these days.


Beijing has been pouring billions of dollars in investment and development aid into the landlocked country, once consigned to the backyard of the Soviet bloc.

Yet it seems China has to do more to win the hearts of the Lao people.

Zeng Xue Dong is so busy he has not got a spare moment to miss his family. The 21-year-old moved from his native Sichuan province to Vientiane just four months ago, yet his business is thriving.

Mr Zeng manages a shop that specialises in cheap China-made mobile phones and Lao Telecom Sim cards.

"I live here by myself, my parents remain in Sichuan," he said. "But life is good and I feel pretty much at home in Vientiane."

His words are echoed by Sun Lei, chairman of the Laos-China Business Association. Mr Sun, owner of the Mekong Hotel and Apartments on Luang Prabang Road in central Vientiane, came to Laos 15 years ago.

He now considers Vientiane his second home.

"Already in 1993, I could see great opportunities as Laos was developing fast. Doing business here is easy," said the native of Liaoning province in northeast China.

The Laos-China Business Association now has more than 100 members, mostly Chinese companies, and the number is growing.

Mr Sun's daughter is studying at Beijing University, and he intends to travel extensively between Laos and China.

"Nowadays, it's easy to move around," he said.

New development projects, such as the highway running from Yunnan province in China to Thailand via Laos, have certainly helped.

But stronger political and economic ties between the two countries are the main reason behind the influx of Chinese people and money into Laos.

Historic links

Talking to the BBC, Yunnan governor Qin Guangrong insisted that China and Laos were "not only neighbours, but also friends, and it's only natural that the two sides would work together to promote a good economic relationship".

In the last few years, the number of Chinese living and working in Laos has been rising steadily. Official statistics say at least 30,000 live there, but in reality the figure could be 10 times greater. Not only is the Chinese presence highly visible in the northern border areas, but in the capital as well.


They (the government) say don't worry but they give away business permissions and visa like sweets.
Xaisomboun Soukhummalay,
Vientiane resident

In Vientiane's downtown Samsenthai quarter, streets are adorned with red lanterns and the smell of Chinese cooking adds to the dusty heat of the dry season.

At the Lao-Chinese market off Asean Street and the newly opened San Jiang trade centre, shops are packed to the ceiling with Chinese goods, from fake flowers to electric massage chairs.

Even the Vietnamese hawkers, once a regular sight on Vientiane streets, have now been replaced with Chinese vendors.

Laos has traditionally had strong links to Vietnam. During the French colonial period, the country was run by Vietnamese civil servants and when Laos became communist after the Vietnam War, its politics and economy tilted towards Hanoi and the Soviet bloc.

But the Chinese are set to regain their foothold in this sleepy regional back-water.

Since 2000 China has been pouring aid and investment into Laos. Chinese companies are involved in almost all areas of the country's economy, from hydropower to mining, agriculture and hospitality.

Local fears

However, the recent influx of Chinese has caused great controversy in Laos.

Thousands of Chinese labourers have been brought in by the China Yunnan Construction Engineering Group Corporation to build a $80m stadium in Xaythany district in Vientiane's outskirts.


The new stadium, to be ready before Lao hosts the next South East Asia Games in 2009, is being financed by the China Development Bank.

In exchange, the Lao government awarded a concession to a Chinese company to develop a 1,600-hectare marshland area in the north-west of the city into a special residential and economic zone.

The That Luang Township is rumoured to be the future home of thousands of Chinese families when completed, making it another Chinatown in the Lao capital.

The government in Vientiane has since denied it, saying the property would be open to Lao nationals as well as foreigners and there is no preference to Chinese citizens.

It has also denied that thousands more Chinese workers will be brought in to develop the marshland. Vice Minister of Foreign Affairs Thongloun Sisoulith said Laos lacked skilled labour, so "foreign workers, not only Chinese, will be invited to participate in this development projects".

"Economic migration is unavoidable in this modern time and it happens anywhere," said Mr Thongloun, adding that the Lao government is confident it can control and manage the influx of foreigners.

But some Laotians remain sceptical, even resentful.

Duangtavan Saichandi, a 24-year-old shopkeeper, said most of people were cautious about the presence of so many Chinese people in Laos.

"But the Lao people are too laid-back. We just say: 'Oh, OK then'," he said.

Another Vientiane resident, Xaisomboun Soukhummalay, was more direct.

"[The government] say don't worry but they give away business permissions and visas like sweets. People just flock in, and we Lao people do worry," he said.

"Our population is six-and-a-half million. Their one Yunnan province is seven times that!"


Story from BBC NEWS:

Interesting Prenders.
When I went over the bridge on Monday there were at least 8 large trucks filled with a variety of different types of steel work waiting to go over from Thailand.
I don't know what the road/rail links are like from China into Laos but I am guessing not very good. Thailand could get quite a bit of transportation work on the back of this expansion.
And maybe now is the time to get into Laos before it gets too busy....

Yes, that's interesting. My LGF tells me that Laos are actively encouraging investment and people from China and Vietnam, and that prices in Vientiane are being driven up because of it.

Arjay,
Does your girlfriend know if there are more Westerners also looking to Laos for investment and business.

Prenders, she doesn't really know.

She says there are farangs in Laos with big money. From what she says I believe these are the ones that work for NGO's, helping with water, irrigation, forestland, electrical or bomb disposal projects etc. I think their numbers are insignificant compared to the number of Chinese coming/flooding in. Also, I don't believe farangs can own land directly, as in Thailand. Though I'm not sure on that, because that may be the answer that suits her to give!

There were a lot of Chinese tourists, cars with Chinese number plates and Chinese vendors when I was in Vang Vieng last year. It was Chinese NewYear at the time,so that may account for the tourists.
Is there anywhere in the world where there isn't a lot of Chinese?
Thanks for the article Prenders and would like to know FRAZDEE'S thoughts too.
Cheers
Lew

I am not sure about a Falang owing "land" RJ (as in going and buying a farm, for example). But I do know that Falang can actually solely own a business (& therefore the property of a business) in Laos. Over a year ago I stayed in a hotel in Vientiane owned & run by an Aussie. He told me that the complete business was solely in his name & that no Laos partners had to be involved. I, obviously do not know if the hotel was leased to him or that it had been totally purchased by him. the impression he gave was the latter, but who knows..

Having spent 5 years living and running a buisiness in Laos, I can assure you, that certainly up until a year ago, the rules for foreigners owning land etc, was vertually the same as here.

You cannot buy land, and you can only hold 49% of a buisiness, there is the normal way around these regulations, but that is the official line!

In my opinion (I

The burgeoning Chinese business presence in Lao?? Money, money, money!!! Ya gotta believe that key players in the Lao government are lining their pockets by allowing thousands of Chinese business folk to open up in Vientiane.. My Lao friends are livid about it and feel they've been betrayed.

Foriegn Investment.. My loose research says:

#1 investor; Thailand
#2 investor: China
#3 Investor; Vietnam

I believe the Japanese are in the top 5..

don't know the rest but Aussie's have a big stake in mining various minerals in the country from gold to tin to bauxite.

U.S.A. is way way down on the list...

The northern "Special Economic zone" on Lao's Chinese border is essentially run by the Chinese government as a tax free zone with factories and a huge casino complex. The Lao have titular control of the area but the Chinese are actually in control. Very few Lao are given jobs there and many villages were relocated when the many square kilometers of land were treatied off by the Lao government for I believe several million dollars a year in rent for many years.

Realistically, the Lao are using a RealPolitik approach here.. The Chinese are the 900 pound gorilla in the cage of Asia and the Lao perhaps are a very tiny spider monkey.. Better to make nicey-nice with big brother to the north and when officials can line their pockets while developing a fraternal socialist relationship.... why not??

This sounds very interesting. I read an article today about the Chinese investing in Burma. Apparently China and India are in competition to secure future markets. The Chinese immigrants have replaced long term Indian immigrants in many communities in Burma. Sounds like the same approach that is also happening in Laos.

China no longer needs its army to secure client states. Just start sending workers to these countries until the balance of power tips in their favor. The local residents will trade one corrupt regime for a more powerful master in Beijing.

Gee what will happen in Thailand. There is already a 12-15 Chinese population base that controls 80% of the economy. Only time will tell. I guess PM Samak needs to make a trip to find out what the Chinese want.

I think Jimbo & Frazee make very valid points. What China are doing (in Asia & Africa) is securing natural resources. This is certainly a long term strategy. Whether their aim is just to protect what they see as China's future or to screw the Western World only time will tell.
America is often accused (rightly or wrongly I will not comment ) of offering assistance to countries that it considers are 'strategic'. Through its aid programs (either directly or indirectly through the UN) it gives assistance to just about anyone.
China is far,far more selective in its assistance & is helping some of the worst governments that exist in the world today to remain in power - but, strangely, only if they have large natural resources!!!!!