Laos steps into the globalised world

China’s expanding influence in Laos is particularly significant in the light of its long-term rivalry with Vietnam for influence. Since the early 1950s, when the Vietnamese Communist Party helped found the Pathet Lao, Hanoi had a dominating influence: North Vietnamese regular units fought alongside the Laotians they had trained to overthrow the US-backed Rightist government. Liberated zones under the Pathet Lao in turn provided valuable rear area and supply routes to south Vietnam. Vietnamese officials ran much of the administration during the French colonial era, which ended in 1953, and many stayed on as businessmen and private entrepreneurs. Newly arrived Vietnamese often have relatives in Mekong river-valley towns like Vientiane, and can more easily obtain local identification documents - and, after a while, citizenship. Vietnamese economic influence, and investment, is especially evident in the south.

But even there, cheap Chinese consumer goods abound in local markets, and it’s only a matter of time before China’s entrepreneurs become more firmly established there as well. A foothold in southern Laos would give China more direct access to Cambodia - another country that has moved closer to China in recent years - and comparatively prosperous urban areas in northeastern Thailand. But despite recent economic progress, Laos’ small population alone will never provide a sufficient volume of demand for Chinese goods that Beijing seeks.

On October 23, Chinese President Hu Jintao and his Laotian counterpart, Choummaly Sayasone, met in Beijing to reaffirm their cordial relationship. A member of the Lao delegation stated that Laos and China would strengthen their “comprehensive strategic partnership of co-operation,” and that “with joint efforts, Laos-China traditional friendship will last forever”.

Although shrouded in traditional, communist rhetoric, the message was clear: China is in Laos to stay - well beyond the Asian Games. And, once completed, the soon-to-be-built, fourth bridge on the Mekong River could expand that influence and change the geopolitics of the region as well.