The Boten-Vientiane railway, or the China-Laos railway, is a 414 km electrified high-speed railway that connects the capital city of Vientiane and the town of Boten on the Laos-China border. The railway project started in 2015 and was inaugurated on 03 December 2021. The project, costing USD six billion, is supported by China’s Export-Import Bank as part of its Belt and Road Initiative (BRI). 

The project's northern line is directly connected to China’s rail system at Yunnan in China’s southern province and has the provision to connect the south line with Thailand. The Boten-Vientiane railway is a critical section of the Kunming-Singapore railway under the BRI.

The high-speed rail project is seen as a potential transformation of Laos from a landlocked country to a land-linked country now connected to China and other ASEAN countries, thereby boosting the overall trade and commerce in the Mekong Delta region.

The Boten-Vientiane railway: A brief background
The project discussion between Laos and China started in 2001. In October 2010, plans were announced to build a 414-kilometer standard gauge railway linking Vientiane to Boten on Lao's northern border. The plans were revised so that the project would run under the build-operate-transfer model. The construction work was given to the China Railway Group in September 2015. On 25 December, the construction began at Luang Prabang in Laos. The deliveries of the first train set started on 16 October 2021, with the final line opened on 03 December 2021.

The project cost is estimated to be around USD 5.965 billion. China funded USD 3.6 billion using debt financing, and the remaining funding was made by establishing a joint venture between the two countries. China financed 70 per cent of the project, whereas Laos financed 30 per cent of the project.

What does the project mean for Laos and China?
Laos is a landlocked country with no access to the sea for trade and travel. The new railway project will transform Laos as it connects the country to China, a manufacturing power in the region. The railway line has reduced the travel time from the northern border town of Boten to the capital city of Vientiane from one day to four hours. 

The project has led to a rise in tourism in Laos. According to the data from the Lao Ministry of Information, Culture, and Tourism, more than 2.4 million foreign tourists visited Laos within the first nine months of 2023, a 285 per cent rise compared to 2022. The railway project has generated employment for more than 3,500 direct jobs and 100,000 indirect jobs. According to China State Railway Group Co., Ltd., the railway project has handled 24.2 million passenger trips and transported 29.1 million tonnes in 2023. It further mentioned that the monthly passenger trips have grown from 600,000 passengers in December 2021 to more than 1.1 million in 2023.

According to the Institute of Developing Economies’ estimates, the railway project will boost Laos’ GDP by USD81.63 million with a potential additional five per cent rise in the service sector's productivity. For Laos, the project is a significant economic opportunity as the country’s excessive dependence on countries such as Thailand and Vietnam can now be diversified by trading with China. This will reduce Laos's import dependency and will help the country boost its exports to China.

For China, the project will enable it to have greater political and economic influence over Laos. Its geographic positioning helps China to expand its land connectivity with Cambodia, Vietnam, and Thailand through various connectivity projects via railway and canals. This will enable Beijing to secure a land route as an alternative to the current shipping lanes, which may be disrupted in the South China Sea or the Straits of Malacca.

For China, the abundance of natural resources such as timber, rubber, granite, limestone, copper, iron ore, lead, and agricultural products will benefit its industries through connectivity projects like the high-speed railway corridor. China has already had a presence in Laos since the early 2000s through various infrastructure projects on roads, dams, telecommunication networks, development of mining, agriculture, etc.

With President Xi Jinping’s visit to Laos in 2017, the two countries have stepped up their relationship to a strategic level. His visit also marked China’s long-term commitment to the country, enabling it to play an active role in shaping geopolitical dynamics in a region that it viewed as its own backyard.

 Reference:
“Xinhua Commentary: China-Laos Railway, flagship Belt and Road project for regional connectivity, common development,” Xinhua, 04 December 2023
“China-Laos Railway opens, putting Laos on track from landlocked to land-linked,” Xinhua, 04 December 2021
 Ayman Falak Medina, “The Completed China-Laos Railway: Bringing Opportunities for ASEAN and the Asia Pacific,” ASEAN Briefing, 21 December 2021
Toru Takahashi, “Ambition, concern drive Lao-China high-speed rail project,” Nikkei Asia, 14 January 2023
Eleanor Albert, “China Digs Deep in Landlocked Laos,” The Diplomat, 24 April 2019