The man widely expected to become China’s next leader was expected to boost his country’s fast-growing ties with Laos during a visit yesterday, as Beijing competes with Vietnam for influence in the small but resource-rich nation, observers say.
Chinese Vice President Xi Jinping (習近平) will meet his Laotian counterpart during the “very important” one-day stop, Lao government spokesman Khenthong Nuanthasing said.
China, along with Vietnam and Thailand, is among the top investors in Laos, and trade links are “growing very fast,” said Somneuk Davadingm, the World Bank country economist for Laos.
Trade between the two countries reached about US$500 million in value last year, he said. Imports are expected to continue growing while mineral, agricultural and wood exports from Laos will also rise, Somneuk said.
Ian Storey, a fellow at the Institute of Southeast Asian Studies (ISEAS) in Singapore, said it would not be a surprise if several major deals were announced during the visit by Xi, the heir apparent to Chinese President Hu Jintao (胡錦濤).
China is particularly keen on investing in rubber plantations to supply its automotive industry, and in hydroelectricity, Storey said.
It has also devoted a lot of money to upgrading Laos’s transport network to help Chinese goods reach Thailand, he said.
In April, a source said China had signed an agreement to cooperate on developing a railway for Laos, which is a member of ASEAN.
ASEAN leaders want to strengthen the region’s transportation and other links to improve competitiveness.
A free-trade agreement that took effect this year between China and ASEAN is the world’s biggest by population, covering a market of 1.7 billion consumers.
Khenthong said he “expected something” related to investments to be signed during Xi’s visit, but said he had no details.
The Chinese business presence in Laos is already very clear, from small restaurants to major projects such as the Sepon copper and gold mine, controlled by China Minmetals Corp, said a foreign diplomat who declined to be named.
A corresponding influx of Chinese nationals “has become very controversial” in the country of about 7 million, Storey said.
Concerns have been raised that foreign-invested megaprojects in Laos rely too heavily on foreign labor.
Along with its economic power, China’s political influence is increasing through ties with a relatively younger generation of Laotian leaders as it seeks to ensure access to resources and maintain stability on its borders, Storey said.
The older generation was more closely tied to Vietnam, even through family bonds, he said.
“The sort of unstated goal from China’s perspective is, it seeks to displace Vietnam,” Storey said, while Hanoi “has pulled out all the stops to try to maintain influence.”
Vietnam’s official news agency carries frequent reports about the “special solidarity” with Laos.
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