Sunday, April 7, 2013

Golden Boten City has been closed down -
will it wake up again with help from China?

Picture by sama sama - massa
Chinese shops along the road in Boten

In Oudomxay province, a mountainous region south of the Chinese border in northern Laos you can see the effects of foreign investment by Chinese business in Laos, notes chinadialogue.net. In 2002, the Lao government earmarked the region for development including hotels, casinos and commercial centres. Sitting on the Chinese border next to Route 3, the town of Boten (磨丁市) was designated a Special Economic Zone. And the big plans led to a big name: "Boten Golden City". The 21 square kilometers on which the town sits have been leased for 30 years by a Hong Kong-registered company, led by Wong Man Suen, with an option to extend this lease by another 60 years, as Asia Times Online noted. The main road, was paved. Chinese workers poured into the Boten Special Economic Zone as construction sites and towering hotels sprang up amid the verdant hills. Dominating the landscape of Boten is the 271-room Royal Jinlun hotel and casino complex, and there were Chinese restaurants, cell-phone outlets, duty free shops and stalls selling cheap Chinese products. It was illegal for Laotians to gamble, in was also illegal for Chinese in China, but Chinese could simply walk across the border without a visa. The town worked on Beijing time, accepted only Chinese currency and spoke only Mandarin Chinese. Electricity and telephone lines ran from China, and electric sockets adhered to Chinese standards. The growing numbers of prostitutes that patrolled the streets were all Chinese, as were the beer and the cigarettes (see pictures by Midnitemapper).

But in April 2011 the casino was shut down after Chinese authorities had urged their neighbors in Laos to do so. This after media reports that Chinese gamblers were held hostage in Boten for unpaid debts. Most shop and restaurant owners then packed up and left, the same did a Thai transvestite show and the Chinese prostitutes. "The enclave’s economy seems to have collapsed just as the builders hit their stride with a new high-rise hotel and a shopping centre bristling with columns in the classical style", reports Lone Rider. Ron Gluckman wrote in Forbes Asia Magazine that the owners of Golden Boten City were looking out for new investors.

In March 2012 Vientiane Times reported that an unnamed Chinese investor had taken over and that Golden Boten City would become a casino-free zone and that the Lao goverment changed the area from a Special Economic Zone to a Specific Economic Zone. The move gives the Luang Namtha provincial administration greater power to control social and security issues. Officials said the new investor wanted to transform Boten Golden City into a tourism destination showcasing the Lue culture. The Lue ethnic group lives along the Lao, Thai and Chinese borders. The investor is said to have put the Lue culture on stage in Xishuangbana in Yunnan province (China) and in Chiang Mai province of Thailand.

In April 2012 came the news, that the Lao government signed a new agreement with Yunnan Hai Cheng Industrial Group Stock Co. and - surprisingly - again Wong Man Suen’s Hong Kong Fuk Hing Travel Entertainment Group. The investors are said to invest 500 Millions US-Dollars.

But until now not much has changed in Boten. Jack Kurtz, a photojournalist based in Bangkok, travelled to Oudomxay last month to document the effect of China’s investment on the landscape and local people. He found sparkling new shopping centres empty of customers – the goods are too expensive for the local people – and a landscape dotted with cranes, construction and trucks. The development, particularly the paving of the road, has transformed life for many in the province, drawing people down from homes in the mountains to earn a living from tourists or truck drivers who frequent the road. See Jack Kurtz about Oudomxay.

Picture by Prince Roy
The Royal Hotel in Boten


Saturday, April 6, 2013

Chinese money brings big change:
A railway from the North of Laos to Vientiane
and Thailand




China has just opened the worlds longest Highspeed-Railway from Beijing in the north along 2298 km to the southern boom city of Guangzhou. There were a lot of international headlines around the first train on this line. And they helped to forget the big problems with Chinese Highspeed Trains as the Wenzou train collision in the not so far past.

But the Chinese Railway policy has much bigger ambitions. It is under way to create a Highspeed Railway System in Southeast Asia, linking China to Laos and Thailand and creating connections from China to Singapore.

Laos is forcing plans for a $7 billion railway link from the capital Vientiane in the South to the Chinese border in the North (passing the towns of Phonhong, Vangvieng, Luang Prabang, Oudomxay and Luang Namtha). The construction shall begin early in 2013. The line will be completed around 2014, said Laotian Deputy Prime Minister Somsavat Lengsavad at an international rail conference in Beijing. "While the exact route isn't clear, the rail line is expected to connect the southwest Chinese city of Kunming with Singapore, passing through Laos, Thailand and Malaysia", wrote wsj.com.

The project is financed by a 30-year loan from Export-Import Bank of China, according to rfa.org. China will be responsible for the construction. "Beijing is seeking to secure raw materials from neighboring countries to feed massive infrastructure investment and its manufacturing industry", wrote wsj.com. There is one more railway project in Laos: On December 24 a contract was signed for a US $5 billion railway line from Savannakhet to Lao Bao at Vietnam border. The construction is undertaken by Malaysian company Giant Consolidated, writes enjoy-laos.com.

Meanwhile preparations for four highspeed-railway lines in Thailand are going on. Funding is to come from a proposed 2-trillion-baht investment programme dedicated to new infrastructure projects over the next seven years. In November 2012 Finance Minister Kittiratt Na-Ranong said according to Bangkok Post the government is planning four high-speed rail lines to support trade and tourism within the country. The four high-speed rail lines are Bangkok-Nong Khai-Vientiane; Bangkok-Ayutthaya-Chiang Mai; Bangkok to Hua Hin; and an expansion of the Airport Rail Link in Bangkok to Chon Buri, Pattaya and Rayong. These plans are supported by a Study of Thailand Development Research Institute Foundation. And China is aggressively lobbying the Thai government to select its train and construction technology, writes Bangkok Post. Chinese Deputy Railways Minister Lu Chunfang told Prime Minister Yingluck Shinawatra that its construction costs average only US$20 million per kilometre compared with $81 million in Japan and $50 million in Germany. Thailand and China signed a memorandum of understanding on April 15 to conduct a feasibility study for the Bangkok-Chiang Mai and Bangkok-Nong Khai high-speed rail links. Thailands government plans to open international bidding early next year on the first phase of the high-speed rail project. Chinese government officials advising Thailand have suggested that it begins with a 54km route linking Bangkok and Ayutthaya as it would fall in line with the government's push to have the ancient capital serve as host for the 2020 World Expo, noted Bangkok Post.


Update from April 5 in 2013:

The ruling Party in Laos has given the go-ahead to the government to officially negotiate the controversial US-Dollar 7.2 billion loan with China to finance the high-speed railway project linking the two countries, notes Radio Free Asia.


Read also:
Growing Chinese influence in Cambodia: A railway from Preah Vihear, a steel plant and a seaport in Koh Kong

China and Laos: An Uneasy Embrace
by Prashanth Parameswaran for The Jamestown Foundation