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China-Laos Highspeed Rail Starts Operation (Part 2)

China-Laos Highspeed Rail Starts Operation (Part 2)

By Charles F Moreira, Editor

This is a continuation article, part 1 can be read here

Strengthening relationships

Besides his interest in the railway, Thai Lao Together is also very passionate about promoting closer relationships between Thai and Lao peoples who share very similar histories, language, culture and traditions.

The major difference between these two countries is that Thailand is a capitalist-governed constitutional monarchy with a western-style, multi-party, parliamentary system of government, whilst Laos is a one-party, communist-ruled republic, similar to China and Vietnam, which allow some degree of private capitalism to operate under state supervision, and which also welcome foreign capitalist investment to enable them to develop their economies and acquire foreign advanced technologies.

Economic benefits

Laos covers a land area of 236,800 sq km and according to Laos’ National Statistics Centre, its population was 7.23 million in 2020, with a per-capita GDP equivalent to US$2,642 per annum and an annual growth rate of 3.28%.

According to the Laotian lifestyle and culture You Tuber Neenee Lao Life, average per-capita income in Laos derives from three major industry-sectors – namely, Services and Tourism – 39.56%, Industry – 33.36% and Agriculture – 16.51%.

“Laos has much beautiful scenery and many people around the world want to visit Laos”, said Neenee Lao Life.

Laos’ industrial sector is growing rapidly, especially in mining of its rich mineral deposits and in hydroelectricity generation, whilst its comparatively low wages are attractive to foreign investors, whilst its main agricultural exports are rubber, tea, coffee, vegetables, timber, bananas, corn, cassava, rice, beef, buffalo and goat meat.

At the same time, several special economic zones are being built, which the Lao government is promoting.

“To be sure, the Lao-China railway has enormous benefits for these three sectors which generate GDP-per capita per year and will definitely improve economic growth” said Neenee Lao Life.

Besides enabling more tourists from neighbouring countries as well as Europe to visit Laos, together with additional foreign currency, she expects the Laos-China railway to save time and costs for industry and agriculture by making it easier to import and export.

At the same time, the railway will enable faster and more convenient travel within Laos and overall she expects the Laos – China railway will stimulate the economy and increase Laos’ national income.

Rail Freight

Whilst much public and media attention is focused on these sleek-looking, aerodynamic high-speed passenger trains, however Laos has prioritised freight trains drawn by more conventional and less sexy-looking electric locomotives travelling at a more sedate 120 kmph along the same tracks.

“Right now, the transport of freight to China takes from five to seven days by sea and two days by road, and transport of freight from Thailand to China through Laos typically covers a distance of 1,320 km in total, takes around 19 hours and costs around 2,565 Baht (RM320) per tonne”,  said Thai Lao Together.

Such rail freight on regular-speed rail transport on 3 metre gauge tracks, within Thailand to Nong Khai on border with Laos and across the Mekong river to Vientiane, where it continues by road to China.

He estimates that with the Thailand – Laos – China railway (including Thailand’s current trains), the cost of freight from Thailand to China can be reduced by between 40% to 60%, and the travel time by rail (from Vientiane to Kunming) taking between eight to ten hours.

Right now, Thailand sells lots of fruits to China and the volume of e-commerce purchases delivered will be a major major part of goods delivered.

Once the Thai to Laos high-speed rail is completed, expectedly in about five years, freight to Thailand can be carried on the same train all the way to Kunming without having to change between trains.

“And later, both freight and passenger traffic can travel all the way down through Malaysia and Singapore, which will strengthen (the economies) of ASEAN nations, whilst at the same time, freight from ASEAN nations transported to China can continue their journey to Russia and Europe”, he said.

According to the Travel China Guide website, there currently are international trains between China and Mongolia, Vietnam, North Korea, Kazakhstan and Russia. These trains enable the transport of goods between Laos and these countries through Kunming, which already has a high-speed rail link to Beijing.

Freight prioritised

Meanwhile, Laos originally has two high-speed passenger train schedules per day travelling between Laos and China, whilst it has five freight train schedules, and this translates into 500,000 passengers per year and 2.2 million tonnes of freight transported by rail, and under the next phase, the frequency will be increased to 14 freight train schedules per day and four passenger train schedules per day.

“Also, I’ve heard news that lots of Chinese investors are investing in Laos and Thailand right now, with 249 investors looking to invest in Thailand, which is the highest in 10 years” said Thai Lao Together.

“They see the benefits of faster, easier and cheaper transport of goods, without having to change between different modes of transport which is expensive, so with high-speed rail enabling lower transport costs, it creates benefits for Laos, Thailand and ASEAN as a whole”, he added.

With high-speed rail passenger ticket prices and freight charges being published in Laos recently freight charges are 0.6 yuan (40 sen) per km, whilst transport of a 20-foot container costs 13.5 yuan (RM8.95) per km, a 35 foot container costs 16 yuan (RM10.60) per km and a 40 foot container costs 18.7 yuan (RM12.40) per km.

“At that rate, I’ve worked out that transporting a 40 foot container by high-speed rail the 406 km between Vientiane and Bo’Ten costs 40,000 baht (RM4,997)”, said Thai Lao Together.

Meanwhile, it may interest Malaysians to know that it’s estimated that 70% of the traffic carried on the rather controversial high-speed East Coast Rail Link (ECRL) currently under construction between major cities, towns and sea ports on the west and east coasts of Peninsular Malaysia is expected to be freight and 30% passenger traffic.

The ECRL will no doubt greatly help to encourage economic activities and investments along the its route, even before the Central Route of the Pan-Asia Railway Network is extended from Bangkok down southern Thailand to the border with Malaysia at Kelantan state, and the Kuala Lumpur to Singapore high-speed rail are completed.

The ECRL will enable faster transport of goods between the west and east coasts of Peninsular to sea ports on the Straits of Malacca and the South China Sea, thus saving time and cost of sea transport around Singapore.

In Part 3, we will look at the background behind the Laos – China high-speed rail, which Laos badly wanted and some of the concerns expressed over its cost and the ability especially of Laos to pay its share of the cost of the railway, including to repay the soft-loans taken to pay its share of the railway.


Thai Lao Together


Neenee Lao Life




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