Via Der Spiegel, a report on how Laos’ new high-speed rail connection connecting the capital to China is a boon for many but is it a luxury it can really afford?

It is late July and we are just outside of Vientiane, the capital of Laos. Here, in the middle of nowhere, is where the train station of the Laos-China Railway Company is located. The building, with its flattened and elongated wing roof, houses the waiting hall for the new high-speed train between China and Laos. For now, the station in Vientiane is the southern terminus of the line.

 Construction on the rail connection began in 2016, and it opened in December 2021, not quite six years later. It stretches 414 kilometers (257 miles) from the Chinese province of Yunnan to the Laotian capital of Vientiane on the border with Thailand – across 167 bridges, through 75 tunnels, winding its way along deep valleys and through rugged forest.

A Lao woman waiting at the ticket counter says that the old joke Laotians have long told about themselves – namely that the abbreviation PDR, which refers to the Lao People’s Democratic Republic, actually stands for “please don’t rush” and refers to the country’s leisurely pace – no longer applies. Since the high-speed rail line has been in operation, she says, it’s time for a new joke, because the people of Laos can now get from one end of the country to the other at breakneck speed.

But this isn’t just any old railway improvement project. It is the first true rail line that the country, one of the poorest in Southeast Asia, has ever had. The communist country, with 7 million inhabitants, is leaving its isolation behind and can now conduct trade far more easily with Thailand to the west and the vastly larger China in the north.

Critics, though, view the project skeptically, arguing that it is far more than Laos can afford and could plunge the country into economic crisis, similar to the one in Sri Lanka. They view the rail line as yet another successful move by China to force its neighbors into dependency – luring them in with huge infrastructure projects and loans that they can never pay back.

Inside the station, four long lines have formed, with travelers waiting to have their tickets checked. Painted in white, blue and red stripes, the colors of the Laotian flag, the high-speed train has seats for 720 people, and it heads north from the Vientiane station twice daily. On this day, it is sold out. The ticket check goes quickly and the passengers begin boarding, with three seats on the left-hand side of the cars and two on the right. The panel hanging from the ceiling displays messages in Chinese, Laotian and English, in that order.

The train pulls out of the station at 7:30 a.m.

Announcement: “If you are sitting in the wrong seat, you will have to pay a surcharge of 30 percent.” “Please do not throw toilet paper into the toilets.” “This is a non-smoking train.”

A Chinese couple takes their seats. They say that they have been living in Laos for a long time, and have been waiting patiently for the border to China to finally be reopened after having been completely sealed during the pandemic. They haven’t seen their families in so long. They say they think the rail line will prove beneficial to Laos, particularly for imports and exports. In contrast to its neighbors, they point out, Laos has no access to the sea, a geographical disadvantage that the rail line could slightly ameliorate. They believe that a lot of Chinese will be interested in investing in Laos.

Outside the train on the way north along the Mekong River, the landscape streams past. Green valleys with rice fields, the sides of the hills covered in jungle. Fishponds can be seen every so often, along with muddy brown fields and the occasional house. The hills to the right and left of the rail line get bigger and bigger. And then, after about an hour, the long series of tunnels starts – with almost half of the line to the border running beneath the mountains.

For China, the high-speed train through Laos is a further decisive step toward the completion of its Belt and Road Initiative, the vast development program launched in 2013 with the aim of substantially expanding Beijing’s influence. The initiative opens up markets, trade corridors and access to resources in Africa, Central Asia and Europe. China’s influence in Southeast Asia, especially in Laos, is particularly large.

For Laos, the “New Silk Road,” as the investment initiative is frequently called, means the opportunity to enjoy a state-of-the-art rail line of the kind the country never could have built and operated on its own. Other countries, like Japan, Vietnam and Thailand, also invest in Laos, of course, but China is by far the country’s largest lender. Chinese money is financing the construction of hydroelectric plants and dams on the Mekong, agricultural projects, mining operations and caoutchouc production. The rail line, Laos’ most expensive infrastructure project ever, was built by the Laos-China Railway Company, a joint venture largely owned by Chinese investors. The plans, the equipment, the workers, the material – almost all of it came from China. 

For China, the train line offers a way of connecting the economically weak western part of the country through Laos with Thailand, and potentially beyond. Plans call for the line to be extended further to the south, all the way to Singapore, with its vast container port.

But for the people on the platform, the train offers convenience more than anything else. They say that before, when they wanted to travel to another city, they had to take the car or the bus – and it tended to be an arduous journey.

Noi, a Laotian mother of two small children, says that before the train line was built, she was forced to travel across poor, heavily potholed roads, frequently washed out by the rain or unpassable because of mudslides and flooding. She says she was almost never able to visit her family, and especially not with the children in tow. The train tickets are expensive for Noi, and prices went up only recently. She paid the equivalent of 16 euros for her ticket, from her monthly earnings of just over 100 euros. Plus, she says, it isn’t easy to get a ticket. The online system still doesn’t work, meaning would-be travelers have to spend hours standing in line and hoping that tickets are still available when they finally make it to the counter. Still, says Noi, she hopes to take the trip to see her family a couple of times per year.

Another says from experience that the trip from Vientiane to the Chinese border by car can take up to 15 hours. The train, with a high speed of 160 kilometers per hour (100 mph), covers the same distance in less than four hours.

A group of young men is hoping that the freight traffic that has begun heading back and forth on the tracks between China and Laos will provide their country with an economic boost and more jobs.

The opposite, however, could also be true. When the project was launched, construction costs were projected to be $6 billion, the equivalent at the time to roughly half of Laos’ gross domestic project. The two countries split the bill, to be sure, but the financial obligations are nevertheless oppressive for Laos.

Laos took out a loan of more than $400 million from the Export-Import Bank of China for the project in addition to granting China ownership of a strip of land to the left and right of the rail line. Should Laos be unable to pay back its loan, the entire train line would fall into Chinese hands.

Some observers fear that Laos could be facing an economic collapse, fueled by the pandemic, by the crisis in Ukraine and by Chinese investments in the country. Inflation is already at its highest level in two decades, making life even more difficult for the fifth of the population that lives below the poverty line. In May, fuel deliveries to the country were suspended as a consequence, with huge lines developing in front of the country’s gas stations. According to the World Bank, the country’s sovereign debt load was $14.5 billion in 2021, with half of that money owed to China.

The first stop is at 8:25 a.m. in the town of Vang Vieng, a place which, before the pandemic, was full of backpackers, who liked to float leisurely down the Nam Song River.

Passengers can stay on the train all the way to the terminal stop in Boten, the northernmost city in Laos, which the train reaches at 11 a.m. after a journey of just over 400 kilometers. For the time being, only freight trains are allowed to cross the border into China.

Boten used to be the last Laotian village before the Chinese border, a small backwater that was home to just a few hundred people. But 20 years ago, it began growing, with Chinese investors transforming it into a city of casinos and hotels, an economic zone in Chinese hands and where Mandarin is spoken. The good times didn’t last, though, and the hope is that the train line will inject new energy into the place.

Most people on this day, though, get off the train at 9:24 in Luang Prabang, a hilly town on the banks of the Mekong River that is home to a vast number of temples, with some streets dotted with up to 30 of them. Perhaps the most famous is Wat Xieng Thong, where the Buddhist faithful, dressed in traditional clothing, line up every morning to hand out sticky rice, hard-boiled eggs and rice cakes to the monks.

The woman with her infant gets off here, as does the group of retirees from Thailand and a few backpackers from Europe.

Luang Prabang, listed as a UNESCO World Heritage site, is a good place to discuss the opportunities presented by the new rail line, as well as the potential dangers. An employee of the tourism office, where China Daily is the only newspaper on display, says he hopes that many Chinese tourists will begin arriving once Beijing reopens the border. For two long years during the coronavirus pandemic, he says, Luang Prabang was a lonely place, and many locals had to close down their shops.

But he is also concerned, he says – which is why he asked to remain unnamed in this story. He says he was born in Luang Prabang and isn’t sure how well the town will be able to handle the large number of tourists who are sure to arrive in the future. He tells the story of a dam that was built across the Mekong, financed by foreign money and constructed on Laotian territory. In 2018, the dam collapsed. Thousands of people lost their homes, and some even lost their lives. Since then, the tourism office employee says, he has had the feeling that it’s a bad idea for Laos to have so little influence and control over these projects – when other countries use his homeland like a field that can simply be harvested. The next Mekong dam, he says, is planned for a site just 25 kilometers from Luang Prabang. Financed by China.

He says he often wonders: Who is responsible if there is an accident on the tracks? According to the Laotian Construction Ministry, the rail line will be free of debt in 23 years. But, as the man from the tourism office points out, the details of the contract have not been made public and the Laotian populace has been left in the dark. What happens if things don’t work out as planned – if, for example, the pandemic returns, China keeps its border closed and traveling becomes impossible again? Or if people can no longer afford to buy tickets? Were all those things part of the calculations?