Full of online fraud activities: The Golden Triangle Special Economic Zone at Mekong river in the north of Laos
David Hutt, a research fellow at the Central European Institute of Asian Studies (CEIAS), analyzes on rfa.org, what happened lately in the Golden Triangle Special Economic Zone in the north of Laos. Since August hundreds of people have been arrested due to their involvement in online fraud activities. Hutt writes that in Cambodia and Myanmar scamming tends to be geographically dispersed with compounds across the country and controlled by different syndicates. In Laos the industry was, until very recently, almost entirely centered in the Golden Triangle Special Economic Zone, an autonomous area long notorious for organized crime and run by the Chinese casino mogul Zhao Wei and his Kings Roman Group, which has close ties to organized crime.
David Hutt argues, that Zhao Wei and his associates had established laundering trails to China and Myanmar years earlier, it meant that, unlike in Cambodia, most of the revenue from the scam industry immediately left Laos. This limited the amount of money needing to be recycled or laundered through local conglomerates, thus reducing the sums needed to corrupt Laotian officials, politicians, and tycoons. Hutt thinks that officials, especially those outside Bokeo province where the SEZ is located, weren’t contaminated by scam money, so they were not interested in protecting the racket. This makes it easier to conteract the scam industry. In May, the Lao government reshuffled the leadership of Bokeo province, according to Hutt ostensibly to clean out officials who had been bought off.
Then there is the Chinese Communist Party, which wants to crack down on the scam industry in Southeast Asia after many Chinese people have been victims of fraud activities. The Laotian government, which relies almost entirely on Chinese investment for economic growth and on Chinese debt, "cannot say no when Beijing orders it to move on the scammers", Hutt comments. The raids on the Golden Triangle SEZ came just weeks after Chinese foreign minister Wang Yi visited Vientiane.
But Hutt thinks, that the Laotian government wants to push Zhao Wei and his associates enough for some smaller operators to flee the country, but not enough that the Golden Triangle SEZ collapses. Hutt points to the fact, that in Laos the online scam sector could be worth as much as the equivalent of 40 percent of the formal economy (according to a United States Institute of Peace report earlier this year). It is estimated that criminal gangs could be holding as many as 85,000 workers in slave-like conditions in compounds in Laos.
Bokeo International Airport (BKIA) in Laos was expected to open end of 2023. But that did not happen. There was just a Youtube video announcing the opening soon:
The new airport is located at the Golden Triangle Special Economic Zone (SEZ) and covers 300 ha. It would be the second airport in Bokeo province in addition to the existing small airport located in the provincial capital Huayxai. The new airport has been constructed by the owners of the Golden Triangle Special Economic Zone, Chinese-owned Kings Romans Casino (Dok Ngiew Kham Group with chairman Zhao Wei). The construction cost of US$175 million is being financed by the Hong Kong-based Greater Bay Area Investment and Development (HK) Limited, which is a member of the Dok Ngiew Kham Group, as Vientiane Times reported. The aiport is designed to accommodate large aircrafts including the Boeing 747 and Airbus 320.
Doubts came up in Bokeo province and elsewhere about this airport project. The Lao government can expect to lose customs revenue, taxes and entry fees to Chinese investors who have the 99-year lease on the land in Bokeo where the airport is being built, as rfa.org reported.
The Golden Triangle SEZ has also become a haven for criminal activities including money laundering, prostitution, online scam and drug trafficking, as the International Crisis Group pointed out in a report. It named the Special Economic Zone "South East Asia’s Most Conspicuous Criminal Enclave". In December the Lao authorities deported 462 Chinese nationals for offenses including human trafficking from the Golden Triangle SEZ.
The International Crisis group reported, that online scam operations are running in the Golden Triangle Special Economic Zone. But lately China has asked the countries in South Asia to fight the criminal networks behind these scam operations. This could be one more reason, why the opening of Bokeo International Airport was in delay. Such a big airport, that can handle 2 millions of passengers a year only makes sense, if Chinese authorities agree to flights from Chinese airports to Bokeo to transport customers to the casino and the hotels.
Then Bokeo International airport hold an opening ceremony on 5 February 2024. The ceremony was attended by Lao Prime Minister Sonexay Siphandone. But this ceremony was overshadowed by the announcement of Lao Airliness of the indefinite termination of Bokeo-Vientiane flights, as Laotian Times reported. So this airport for now only handles one passenger flight a day operated by Lanexang Airways International between Vientiane and Ton Pheung (ເມືອງຕົ້ນເຜິ້ງ). And this airline seems to be owned by the same Chinese company, who built the airport and developped the Golden Triangle Special Economic Zone. This company got a 50-years concession for the airport, as Lao News Agency writes.
A video from July 2020 shows the development of Boten (Chinese: 磨丁市, Lao: ບໍ່ເຕ່ນ) town in northern Laos, at the border between Laos and China: Many highrisebuildings, some finished, some under construction - but only a few people on the streets and in the shops. Millions of dollars have been invested in this Special Economic Zone (SEZ) in Laos by Chinese companies, in anticipation of the construction of China-Laos-Railway. The railway in both countries is now finished, but still the border is closed for passengers due to the Covid-19 pandemic. The investors will have to wait longer for the return of investment - if it will arrive ever.
The plans for the new Boten city (sometimes written Borten) are centered around an international finance centre in a cluster of 20-storey towers and a 30-plus-storey International Trade Centre. They aim at attracting nternational commerce and finance, international duty-free logistics and assembly, international education and medical industry and international services. Residential housing is dimensioned for 300,000 people. This at the location of a once small and sleepy rural village nestled in agricultural fields and surrounded by mountains covered by tropical forests. Promoting this new city is Haicheng, a private real estate development company headquartered in Kunming, where it has built commercial and residential properties. Since 2016 Haicheng has got a 90-year land lease. It has already invested around US$1 billion, completed 80% of land clearance, 258,526 m2 of commercial and residential real estate and is planning to invest a total of US$ 10 billion and complete the project over 10–15 years. This we can read in the publication "The BRI and Urbanisation" (February 2021) by Research Gate. Se this promotion video.
Much of Haicheng’s investment in Boten has come from bank loans made by the China–Laos Bank, a joint venture between a Laotian state bank and the Yunnan Fudian Bank, say the authors of Research Gate. Jinxin Fertility Group, a private healthcare company with hospitals in China, has recently acquired the first medical facility in Boten, the Rhea International Medical Centre, and plans to upgrade it for dealing with COVID-19 patients.
For now Boten has attracted mostly Chinese corporate and individual investors who have purchased the bulk of the completed commercial and residential properties. And a flood of Chinese workers and entrepreneurs have come to Boten, notes Murray Hiebert in his book "Under Beijing's Shadow: Southeast Asia's China Challenge". He also notes that Lao people are only hired if they speak Chinese.
CNA Insider has produced a documentary: The Rebirth of Casino Town Boten, Laos / Borderlands, a powerful and intimate look at the people who are living at this border town:
Get impressions of Boten City by these pictures on Instagram:
Officials from China and Laos marked the official launch of the $5.9 billion railway connecting the two nations on December 3. The first passenger services were running on December 4. The first red, blue and white bullet train called Lane Xang departed from Vientiane station. It can reach 160 kph. The standard gauge single-track line cuts through 417 kilometers of rugged terrain from Vientiane to Boten, the main border crossing with China. The line includes 61 kilometers of bridges (167) and 198 kilometers of tunnels. The travel from Vientiane to the Chinese border, which so far took around 15 hours by road, now takes less than four hours. "The Laos-China Railway is part of the Belt and Road Initiative (BRI), Beijing’s $1 trillion transnational development strategy that aims at connecting China with over 70 countries across Asia, Africa, and Europe via the construction of roads, rails, seaports, and airports", describes The Diplomat.
No way to China for passengers right now
Right now passenger services are only offered inside Laos. Due to the Covid-19 pandemic the border between Laos and China is not open for passengertrains. But freight trains are running now between the two countries. Lao-China Railways has stated that once the immigration prohibition will be lifted after 1 January 2022 they would extend the services to Sipsongpanna station at Jinhong city in Yunnan. The CR200J Fuxing EMU trains take about three and a half hours from Kunming to Xishuangbanna Dai Autonomous Prefecture and less than three hours to Puer.
Passenger trains also started on Yuxi-Mohan line in China
According to Chinese news agency Xinhua the passenger trains on the line from Yuxi to Mohan in Yunnan have started operation also on December 3. Until December 9 a total of 114,000 passengers have been transported. The number of trains running on the line meanwhile have been increased from 17.5 pairs to 25.5 pairs. The new line ends the history of no rail service between Puer and Xishuangbanna. There are 93 tunnels and 136 bridges in the 508-kilometer segment. 15 tunnels are more than 10 kilometers long.
Laos opens the borders for international tourist groups
Laos has officially announced it will reopen for tourism on 1 January 2022 after the lockdown due to the pandemic. According to the Ministry of Information, Culture, and Tourism, the reopening will be implemented in three phases. The first phase will be from 1 January to 30 March 2022, the second phase from 1 April 2022 to 30 June 2022, and the third phase from 1 July 2022 onward.
During the first phase tourists from the following countries will be allowed in: China, Vietnam, Cambodia, Thailand, Malaysia, Singapore, South Korea, Japan, France, United Kingdom, Germany, the Netherlands, Spain, Italy, United States, Canada, and Australia. Tourism will be restricted to group tours at first, with tours arranged by authorized tour operators under the Lao Travel Green Zone Plan.
Tourists must be fully vaccinated against Covid-19 no less than 14 days prior to arrival. They need a health insurance policy with coverage no less than USD 50,000 and a negative RT-PCR test taken within the last 72 hours. Arrivals will be tested for Covid-19 and placed in a 24-hour quarantine in their hotel until a negative result is found. Tourists have to download and register at the LaoKYC and the LaoStaySafe mobile applications prior to arriving in the country and to upload their vaccination certification and Covid-19 test results.
Tourists will be authorized to travel within two zones: Green Travel Zones and Green Travel Trails. During Phase 1 tourists may visit the following green travel zones with at least 70 percent of the population vaccinated: Vientiane Capital, Luang Prabang Province and Vang Vieng District in Vientiane Province. Meanwhile, five provinces will be authorized for Green Travel Trails, including Oudomxay, Xayaboury, Xieng Khouang, Khammouane, and Champasak. Read more details on Laotian Times.
The timetable of the new railway
The following timetable has been published: Vientiane - Boten:
Vientiane dep 08:00
Phonhong dep 09:04
Luang Prabang dep 10:01
Meuang Xay dep 10:49
Boten arr 11:20
Luang Prabang - Vientiane
Luang Prabang dep 18:30
Vang Vieng dep 19:44
Phon Hong dep 20:15
Vientiane arr 20:46
A ticket costs of 330,000 Kip (around $33) for a second class seat from Vientiane to Boten. More ticket prices here. Passengers need to make 3-day reservation in advance and arrive at the station 1 hour before departure
Laos debts after the financing of China-Laos-Railway
"Laos opens scenic railway built on a mountain of Chinese debt", writes Yahoo News. In December 2016 Lao-China Railway Company — a joint venture between three Chinese state-owned enterprises that collectively hold a 70% ownership stake and one Lao state-owned enterprise that owns a 30% ownership stake — signed a BOT concession agreement with the Government of Laos for the China-Laos Railway Project.
Lao-China Railway Company directly secured $3.54 billion of debt financing from China Eximbank while the government of Laos and the Chinese Government jointly contributed $730 million and $1.63 billion of equity financing. Interestingly to make its own share of $730 million equity contribution to the rail project, the Government of Laos secured a $480 million loan from China Eximbank.
The government of Laos is hopeful the railway will turn a profit by 2027. But: With a tiny domestic market, there is "limited commercial logic for an expensive railway" to connect the country of seven million to Kunming, said Jonathan Andrew Lane in an Asian Development Bank Institute report. "That debt service will put further strain on the limited tax-raising abilities of the government," Lane wrote. In September 2021, Laos sold its electricity transmission grid for $600 million with a 25-year concession agreement, that allows a majority Chinese state-owned company to build and manage a large part of the country’s power grid.
What happens in Boten, at the border of Laos with China
In "Boten: the renaissance of Laos' Golden city" documentary photographer Nicholas Bosoni describes how Boten, a rural village counting a few hundred inhabitants less than twenty years ago, is shaping up as China’s gateway to Laos and Southeast Asia, this in form of a Special Economic Zone (SEZ). The Haicheng group, a Yunnan-based developer, presented a $10 billion to transform the former “Golden City” into “Boten Beautiful Land Specific Economic Zone.” The developers estimate that 300,000 people will live in Boten by 2035.
The China-Laos railway ends at the Vientiane south cargo station. There are plans to upgrade the first Thai-Lao friendship bridge linking Vientiane and Nong Khai across Mekong river because the bridge is too small with limited capacity to expand. The railway crossing the Mekong bridge from Nong Khai in Thailand to Thanaleng in Laos has a one metre gauge, while the China-Laos railway has a standard gauge with 1.45 metres. Piti Srisangnam, director of academic affairs at the Asean Studies Centre at Chulalongkorn University in Bangkok, told Bangkok Post, there was no need to wait for the state to build a Bangkok-Nong Khai line with standard gauge, as containers could be delivered to Vientiane using the existing narrow gauge. "Obviously, it won't be as smooth as if the same gauge applied all the way to China, but there are many other things we can start improving, such as border crossings, customs, logistics needed for handling a massive amount of container traffic, and better visa connections between three countries."
Bangkok–Nong Khai high-speed railway is partially under construction as a double-track standard-gauge line that follows the same route as the current Northeastern line. it's being built in partnership with Chinese companies (China Railway International and China Railway Design Corp). The first stage between Bangkok and Nakhon Ratchasima is scheduled to open in 2026. Phase 1 means the construction of the 253km section between Bangkok and Nakhon Ratchasima, at a cost of $1.67 billion USD with the stations Bang Sue, Don Muang, Ayutthaya, Saraburi, Pak Chong and Nakhon Ratchasima. Phase 2 of the 354.5km section from Nakhon Ratchasima to Nong Khai is still under planning. The stations will include Nakhon Ratchasima, Bua Yai, Ban Phai, Khon Kaen, Udon Thani, and Nong Khai according to futuresoutheastasia.com.
Meanwhile in Thailand there are concerns about products from China flooding markets in Thailand. Opposition MPs submitted a motion to question the government following a report that 33 containers with 20 tonnes each of fresh vegetables from China were sent to Thailand in the first week of December, reports Bangkok Post. The development is challenging to Thailand as Chinese fresh produce can be sent to the Thai border in one day at a much cheaper cost than air transport. The Chinese government has erected non tariff trade barriers for exporting fruits and Durain from Thailand to China.
