REACTIONS OF LAO CAPITAL RESIDENTS TO GROWING CHINESE PRESENCE VARY
Once seen as a sleepy backwater, Vientiane is being transformed by foreign direct investment, with views divided on increasing economic dependence on Beijing
Vientiane, the capital of Laos situated on t he banks of the Mekong River, has long been known for its laidback, calm atmosphere. But residents of this fastgrowing city of more than 850,000 people now find themselves having to adjust to changes brought about by an influx of foreign direct investment, much of it from China.
Luxury condominiums, grand restaurants, open-air shopping areas, department stores, cafes, pubs and night markets are slowly but surely transforming the once sleepy backwater.
Nam Phanvilay, a 39-year-old owner of a book and stationary shop in Talat Sao, a big central market that attracts many tourists, welcomed the Chinese investment pouring into the country, saying it does more good than harm.
Citing the emergence of quality shopping malls in Vientiane, he said its residents no longer have to make frequent trips across the river to Thailand to buy goods from there.
“Many Lao people have started buying essential goods and fashion items here instead,” he said.
In 2016, the government imposed a 10% value-added tax on goods worth more than $50 being brought in from Thailand across the Friendship Bridge, near Vientiane, or through Wattay International Airport by those making more than two cross-border trips per month.
The move caused a sharp drop in spending by Lao people on the Thai side of the border.
Nam’s positive sentiments were echoed by a 29-year-old official at the Bank of Lao PDR, the country’s central bank. “Chinese investment has spawned great job opportunities in Laos. Chinese companies provide higher wages for local employees,” she said, declining to reveal her name.
Besides China, which is the largest source of FDI investment in Laos, Thailand, Vietnam and Malaysia are also key sources of investment.
Samaykham Boupha, 25, a Lao health information support official at the World Health Organisation, also praised Chinese investment in Laos, saying it can spur economic growth through exploitation of the country’s rich natural resources.
“Having abundant resources but doing nothing with them to better livelihood of the people is useless,” Samaykham said, noting Laos lacks financial and human resources necessary to build itself up alone.
“Laos is developing, but Chinese investment helps boost the Lao government’s efforts to develop the country at a fast pace,” he added.
Song Gang, a Chinese investor, said a megaproject to link Kunming, the capital of southwest China’s Yunnan Province, with Vientiane by high-speed railway will transform Laos from a landlocked country into a “land-linked” one.
The director of sales at Lao International Development Co, which plans to open a largescale department store in Vientiane in June, said the railway, which will ultimately be extended all the way to Singapore, via Thailand and Malaysia, will further stimulate Chinese investment in Southeast Asia.
The Lao portion of the railway, a project under Chinese President Xi Jinping’s flagship “One Belt, One Road” initiative, starts from the Mohan-Moten border area and will run over 400 kilometres to Vientiane, with designed speed of 160km per hour. It is scheduled for completion in a few years.
However, not all Lao people are carefree about the massive changes under way in their capital as they wonder what actually lies ahead for their future.
Phout Oaundee, a 25-year-old staff at Leuxay Hotel, originally from the northeastern province of Xiangkhouang, was concerned about the government’s ability to sustainably manage the city’s alarmingly rising population.
“Vientiane is far more developed than it once was, but the city is getting crowded. Traffic jams are worse. I do not want Vientiane to become like Bangkok or other crowded cities. It is not our lifestyle,” Phout said.
Vangxay Samanty, 37, who works at the same hotel, hoped to see national economic growth to be driven by local start-ups, an area in which Laos still lags behind its fellow members of the Association of Southeast Asian Nations.
“Very few Laotians run business because of shortage of skilled workers and a weak education system. These hindrances are serious to Laos’ development efforts,” Vangxay said.
On China’s key role in many megaprojects in the country, he sounded a note of caution, saying the government should take care in seeking to “avoid excessive economic dependence on Beijing.”