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Page last updated at 14:39 GMT, Tuesday, 8 April 2008 15:39 UK

China moves into laid-back Laos

By Nga Pham
BBC News, Vientiane

A fast-growing Chinese presence is one of the most striking features in Laos these days.

New arrival Zeng Xue Dong
Mr Zeng is happy to have made Vientiane his home

Beijing has been pouring billions of dollars in investment and development aid into the landlocked country, once consigned to the backyard of the Soviet bloc.

Yet it seems China has to do more to win the hearts of the Lao people.

Zeng Xue Dong is so busy he has not got a spare moment to miss his family. The 21-year-old moved from his native Sichuan province to Vientiane just four months ago, yet his business is thriving.

Mr Zeng manages a shop that specialises in cheap China-made mobile phones and Lao Telecom Sim cards.

"I live here by myself, my parents remain in Sichuan," he said. "But life is good and I feel pretty much at home in Vientiane."

His words are echoed by Sun Lei, chairman of the Laos-China Business Association. Mr Sun, owner of the Mekong Hotel and Apartments on Luang Prabang Road in central Vientiane, came to Laos 15 years ago.

He now considers Vientiane his second home.

"Already in 1993, I could see great opportunities as Laos was developing fast. Doing business here is easy," said the native of Liaoning province in northeast China.

The Laos-China Business Association now has more than 100 members, mostly Chinese companies, and the number is growing.

Mr Sun's daughter is studying at Beijing University, and he intends to travel extensively between Laos and China.

"Nowadays, it's easy to move around," he said.

New development projects, such as the highway running from Yunnan province in China to Thailand via Laos, have certainly helped.

But stronger political and economic ties between the two countries are the main reason behind the influx of Chinese people and money into Laos.

Historic links

Talking to the BBC, Yunnan governor Qin Guangrong insisted that China and Laos were "not only neighbours, but also friends, and it's only natural that the two sides would work together to promote a good economic relationship".

In the last few years, the number of Chinese living and working in Laos has been rising steadily. Official statistics say at least 30,000 live there, but in reality the figure could be 10 times greater. Not only is the Chinese presence highly visible in the northern border areas, but in the capital as well.

They (the government) say don't worry but they give away business permissions and visa like sweets.
Xaisomboun Soukhummalay,
Vientiane resident

In Vientiane's downtown Samsenthai quarter, streets are adorned with red lanterns and the smell of Chinese cooking adds to the dusty heat of the dry season.

At the Lao-Chinese market off Asean Street and the newly opened San Jiang trade centre, shops are packed to the ceiling with Chinese goods, from fake flowers to electric massage chairs.

Even the Vietnamese hawkers, once a regular sight on Vientiane streets, have now been replaced with Chinese vendors.

Laos has traditionally had strong links to Vietnam. During the French colonial period, the country was run by Vietnamese civil servants and when Laos became communist after the Vietnam War, its politics and economy tilted towards Hanoi and the Soviet bloc.

But the Chinese are set to regain their foothold in this sleepy regional back-water.

Since 2000 China has been pouring aid and investment into Laos. Chinese companies are involved in almost all areas of the country's economy, from hydropower to mining, agriculture and hospitality.

Local fears

However, the recent influx of Chinese has caused great controversy in Laos.

Thousands of Chinese labourers have been brought in by the China Yunnan Construction Engineering Group Corporation to build a $80m stadium in Xaythany district in Vientiane's outskirts.

Shopkeeper Duangtavan Saichandi
Duangtavan Saichandi said local people were concerned

The new stadium, to be ready before Lao hosts the next South East Asia Games in 2009, is being financed by the China Development Bank.

In exchange, the Lao government awarded a concession to a Chinese company to develop a 1,600-hectare marshland area in the north-west of the city into a special residential and economic zone.

The That Luang Township is rumoured to be the future home of thousands of Chinese families when completed, making it another Chinatown in the Lao capital.

The government in Vientiane has since denied it, saying the property would be open to Lao nationals as well as foreigners and there is no preference to Chinese citizens.

It has also denied that thousands more Chinese workers will be brought in to develop the marshland. Vice Minister of Foreign Affairs Thongloun Sisoulith said Laos lacked skilled labour, so "foreign workers, not only Chinese, will be invited to participate in this development projects".

"Economic migration is unavoidable in this modern time and it happens anywhere," said Mr Thongloun, adding that the Lao government is confident it can control and manage the influx of foreigners.

But some Laotians remain sceptical, even resentful.

Duangtavan Saichandi, a 24-year-old shopkeeper, said most of people were cautious about the presence of so many Chinese people in Laos.

"But the Lao people are too laid-back. We just say: 'Oh, OK then'," he said.

Another Vientiane resident, Xaisomboun Soukhummalay, was more direct.

"[The government] say don't worry but they give away business permissions and visas like sweets. People just flock in, and we Lao people do worry," he said.

"Our population is six-and-a-half million. Their one Yunnan province is seven times that!"



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