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Full Steam Ahead For China's Rail Links Abroad?

The CRH2 China Railways high-speed bullet train, departing a Shanghai station in February 2007, is capable of speeds of more than 150 mph. (AFP/Getty Images)

This month, NPR is examining the many ways China is expanding its reach in the world — through investments, infrastructure, military power and more.

After a generation of absorbing foreign capital and technology, China is now beginning to export them. It has found the export of infrastructure especially profitable, both economically and politically. China is building high-speed rail links in Turkey, Venezuela and Saudi Arabia, and has expressed interest in bidding for projects in the United States.

China's first project is to link itself to its Southeast Asian neighbors, so that rail travelers may soon be able to traverse Asia from China to Singapore in a day.

The plan is for trains to make their first stop outside China in the border town of Boten in northern Laos. The zone's vice governor, Vixay Homsombath, is already counting the renminbi, or Chinese currency, pouring into the local economy.

"Of course if the people come here, they should sleep in the hotel and eat here, and we can sell the food," he predicts while sitting at a restaurant on the town's main drag. "We can get the money from the hotel's rent and guest house rent."

Right now, Boten is a ghost town. Vixay is hopeful that the trains will bring back the boom times, as well as the gamblers, tourists and workers who drifted away when the zone's casinos shut down last year after a string of gambling-related murders.

Most of the people, goods and money in Boten come from north of the border in China. Most everything needed for the railway will, too. Critics sometimes complain that Chinese infrastructure projects produce few jobs for the local economy, but Laotian officials lament that there's no other way.

In the Laotian capital, Vientiane, the director general of investment promotion, Houmpheng Souralay, says laws requiring the use of local labor will have to be bent a bit for the new railway.

"We need a lot of skilled labor, and the Lao local people might not be able to do that," he explains. "So I heard that at the beginning there might be some need of about 40,000 skilled laborers to work on the construction sites."

Landlocked To Land-Linked

Laos is one of Asia's poorest countries. Its current railway system stretches for just two miles — enough to get from Vientiane over the Mekong River and into Thailand. Houmpheng says the Chinese-built railway can help the country overcome its isolation.

"Laos has a vision of, as you know, transforming the landlocked country of Laos to the land-linked country."

As to when construction will start land-linking China and Laos, both countries say it will happen soon but that no date has been set. Electricity to build and run the new railway will have to come both from China and from Vientiane. But it may eventually be supplied from hydropower dams on the nearby Namtha River.

For now, the Namtha's coffee-colored waters flow as they always have toward the Mekong, with locals swimming and fishing in them. Much of the area is home to ethnic minority hill tribes, living in thatched huts and practicing slash-and-burn agriculture.

In China, debate has been heating up about whether high-speed rail is really worth the massive investment, or whether China just needs more regular trains. Further doubts were raised by the sacking in February of railway minister Liu Zhijun, who is now under investigation for corruption.

But it's hard to find such debate or any indications of public opinion in Laos or its state-run media. Farmer and ex-village chief Souvanpheng Vongxay will have to move to accommodate the new railway, but he says he trusts his government to help him.

"Everyone's happy about this project," he says, reading from prepared notes, with a government official standing next to him. "We support the government because this railway can help to make transportation to other provinces more convenient."

A Rocky Past

While relations between China and Laos' ruling parties are quite cordial, ties are not what they might be, because of China's historical interventions in Southeast Asia.

In 1979, China launched a punitive invasion against Laos' main backer, Vietnam, after Hanoi aligned itself with Moscow and invaded Cambodia, overthrowing the Beijing-backed Khmer Rouge. Laos, Vietnam and the Soviet Union all accused China of undermining solidarity among communist regimes in Indochina. China and Laos did not normalize ties until 1988.

Ian Storey, a fellow at the Institute of Southeast Asian Studies in Singapore, says that since then, China's investments in Laos, such as mines, rubber plantations and hydropower dams, have helped China catch up with Vietnam in Laos.

"Vietnam still has the inside track politically," he says. "It's still got much more influence in Laos than China. But over time that will probably change as China's economic role becomes more dominant."

Negotiating In The Region

There is no known master plan for the high-speed rail network China wants to build in Southeast Asia. Chinese media have reported that China plans to first complete a line through Laos, Thailand and Malaysia before arriving in Singapore. China is reportedly also planning branches of the network stretching into Vietnam, Cambodia and Myanmar. A separate network may eventually extend through western China and Central Asia toward Europe.

Laos should be the easiest stretch. China will put up 70 percent of the investment. Chulacheeb Chinwanno, a China expert at Thammasat University in Bangkok, says that ongoing negotiations between China and Thailand will be tougher, because Thailand will want a controlling share and more technology transfer.

"I think if China really would like to have this system throughout Southeast Asia, they have to be successful in negotiating with the Thais," he argues, "because this can be the model for other countries. Laos is not the model."

Thailand's trade representative, Kiat Sittheeamorn, says China and Thailand are close to reaching a deal, and he's optimistic that China can connect the various segments of the railway.

"I believe China would do all they can in order to complete the line," he recently told reporters. "They already spent so much money building the railway all the way from the south to Laos — they clinched the deal with Laos already — it would be just shameful not to complete it all the way to Singapore."

Benefits Of An 'Iron Silk Road'

China is not the only one to dream of an "Iron Silk Road," crisscrossing the Eurasian land mass. The United Nations conceived of a trans-Asia railway network as early as the 1960s. But at that time, China was still in the grip of the Cultural Revolution, and war was raging in Vietnam.

Plans for that trans-Asia railway lay dormant until the 1990s, when the Cold War ended and China's market reforms sped up, explains Pierre Chartier, a transport expert with the United Nations Economic and Social Commission for Asia and the Pacific, or ESCAP.

"All this suddenly created a huge boom in international trade," he says, speaking in his Bangkok office. "And then the countries in ESCAP decided it was time to equip the region with a transport framework able to accommodate this new international trade."

But experts are far from certain about whether or when China can actually bring its ambitious plans to fruition. Xie Weida, a railway expert at Shanghai's Tongji University, says building the railway itself may be the easiest part.

"I could perhaps talk about it from a technical standpoint," he says, "but in my opinion, whether or not the railway is built or not depends on other factors. One is political, another is economic, and there might even be some military factors involved."

Economically, China's vision for the rail network is one of regional integration. At present, China does more trade with the West than it does with its own neighbors. The railway will help China bring commodities back from Southeast Asia, get its goods to far-flung markets and accelerate the development of China's relatively backward southwestern Yunnan province.

Strategically, China seeks a continental "back door" in case of any maritime blockade. In particular, a railway into Myanmar would give China access to the Indian Ocean and allow it to bring oil supplies up into its southwest without going through a vulnerable choke point in the narrow Straits of Malacca.

It will be a great test of China's diplomacy to get all of its neighbors to agree to its terms, so that one day all railroads will lead to Beijing.

Copyright 2014 NPR. To see more, visit http://www.npr.org/.

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Transcript

STEVE INSKEEP, host:

China spent the last generation absorbing foreign investment and foreign technology. Now it's China's turn to send money and technology abroad.

RENEE MONTAGNE, host:

China's not just exporting cheap consumer goods. It's also exporting infrastructure to strategic locations.

INSKEEP: The Chinese are building high-speed rail links in Turkey, Venezuela and Saudi Arabia. They've even expressed interest in bidding for projects in the U.S.

MONTAGNE: Not only that - the Chinese are building closer links with their neighbors. Someday rail travelers might roll across Asia from China to Singapore in a single day. NPR's Anthony Kuhn reports.

ANTHONY KUHN: The plan is for trains to make their first stop outside China in the border town of Boten in northern Laos. The zone's vice governor, Vixay Homsombath, is already counting the renminbi, or Chinese currency, pouring into the local economy.

Mr. VIXAY HOMSOMBATH (Vice Governor, Boten): Of course, if the people come here, they should sleep in the hotel and eat here, and we can sell the food. And we can get the money from the hotel's rent and guest house rent or something like that.

KUHN: Right now, Boten is a ghost town. Vixay is hopeful that the trains will bring back the boom times, along with the gamblers and workers that drifted away when the zone's casinos shut down last year after a string of gambling-related murders.

Most of the people, goods and money in Boten come from north of the border in China. Most everything needed for the railway will too.

Houmpheng Souralay is a Lao official in charge of investment promotion. He says Lao laws requiring the use of local labor will have to be bent a bit for the new railway.

Mr. HOUMPHENG SOURALAY (Laos Official): We need a lot of skilled labor, and the Lao local people might not have the ability to do that. So I heard that at the beginning there might be some need of about 40,000 skilled laborers to work on the construction sites.

KUHN: Laos is one of Asia's poorest countries. Its current railway system stretches for about two miles - just enough to get from the capital of Vientiane over the Mekong River and into Thailand. Houmpheng says the Chinese-built railway can help the country overcome its isolation.

Mr. HOUMPHENG: Laos has a vision of, as you know, transforming the landlocked country of Laos to the land-linked country.

KUHN: As to when construction will start land-linking China and Laos, both countries say it will happen soon but that no date has been set.

Electricity to build and run the new railway will have to come both from China and from Vientiane. But it may eventually be supplied from hydropower dams on the nearby Namtha River.

(Soundbite of splashing water)

KUHN: For now, the Namtha's coffee-colored waters flow as they always have towards the Mekong, with locals swimming and fishing in them. Much of the area is home to ethnic minority hill tribes living in thatched huts and practicing slash-and-burn agriculture.

In China, debate has been heating up about whether high-speed rail is really worth the massive investment, especially since the sacking in February of railway minister Liu Zhijun, who is now under investigation for corruption.

But it's hard to find such debate or indications of public opinion in Laos or its state-run media. Farmer and ex-village chief Souvanpheng Vongxay will have to move to accommodate the new railway, but he says he trusts his government to help him.

Mr. SOUVANPHENG VONGXAY (Farmer): (Foreign language spoken)

KUHN: Everyone's happy about this project, he says, reading from prepared notes with a government official standing next to him. We support the government because this railway can make transportation to other provinces more convenient.

(Soundbite of gunfire and yelling)

KUHN: In 1979, China launched a punitive invasion against Laos's main backer, Vietnam. Vietnam, Laos and the Soviet Union all accused China of undermining solidarity among communist regimes in Indochina. China and Laos did not normalize ties until 1988.

Ian Storey, a fellow at the Institute of Southeast Asian Studies in Singapore, says that since then, China's investments in Laos, such as mines, rubber plantations and hydropower dams, have helped China to catch up with Vietnam in Laos.

Mr. IAN STOREY (Institute of Southeast Asian Studies): Vietnam still has the inside track politically. It's still got much more influence in Laos than China. But over time that will probably change as China's economic role becomes more dominant.

Unidentified Woman: (Foreign language spoken)

KUHN: A Lao government computer animation shows a train gliding through pristine forests and futuristic train stations. The plan calls for trains to speed through Laos, Thailand and Malaysia before arriving in Singapore. China is reportedly also planning branches of the network stretching into Vietnam, Cambodia and Myanmar. A separate network may eventually extend through western China and Central Asia towards Europe.

Laos should be the easiest stretch. China will put up 70 percent of the investment there. Other countries, such as Thailand, are likely to push for more control and technology transfer.

Thailand's trade representative, Kiat Sittheeamorn, says China and Thailand are close to reaching a deal, and he's optimistic that China can connect the various segments of the railway.

Mr. KIAT SITTHEEAMORN (Trade Representative, Thailand): China would do all they can in order to complete the line. They already spent so much money building the railway all the way from the south to Laos - they clinched the deal with Laos already - it would be just shameful not to be able to complete all the way to Singapore.

KUHN: China is not the only one to dream of an iron silk road crisscrossing the Eurasian land mass. The United Nations conceived of a trans-Asia railway network as early as the 1960s.

Pierre Chartier is a Bangkok-based transport expert with the United Nations Economic and Social Commission for Asia and the Pacific, or ESCAP. He explains that plans for the trans-Asia railway lay dormant until the 1990s, when the Cold War ended and China's market reforms sped up.

Mr. PIERRE CHARTIER (ESCAP): All this suddenly created a huge boom in international trade. And then the countries in ESCAP decided that it was time to equip the region with a transport framework able to accommodate this new international trade.

KUHN: But experts are far from certain about whether or when China can actually bring its ambitious plans to fruition.

Xie Weida is a railway expert at Shanghai's Tongji University.

Mr. XIE WEIDA (Tongji University): (Through translator) This is hard to say. I could perhaps talk about it from a technical standpoint, but in my opinion whether the railway is built or not depends on other factors. One is political, another is economic, and there might even be some military factors involved.

KUHN: Economically, China's vision for the rail network is one of regional integration. At present, China does more trade with the West than it does with its own neighbors.

Strategically, China is looking for a continental back door in case of any maritime blockade. It will be a great test of China's diplomacy to get all its neighbors to agree to its terms, so that one day all railroads will lead to Beijing.

Anthony Kuhn, NPR News, Bangkok. Transcript provided by NPR, Copyright NPR.

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