The Lane Xang EMU train of the China-Laos Railway departs from Vientiane Railway Station in Vientiane, Laos, Dec 3, 2021. (PHOTO/XINHUA)
Businesses in Laos, especially smaller firms, need more support to help them better capture the opportunities arising from the China-Laos railway and enhance their competitiveness in regional trade, experts say.
“The Laos-China railway is a very good project that has been started and implemented successfully. We can see so far that … the railway is fully in use,” said Xaybandith Rasphone, president of the Association of the Lao Garment Industry and vice president of Lao National Chamber of Commerce and Industry.
But Xaybandith believes that compared to big companies, including those from China and other neighboring countries like Thailand, it is still challenging for Laotian companies, especially the small and medium-sized ones, to make use of the railway.
“The capacity and the products that we produce here have not yet been in the volume that can be supplied to the Chinese market,” said Xaybandith Rasphone, president of the Association of the Lao Garment Industry and vice president of Lao National Chamber of Commerce and Industry, adding that there is a need for government support
“The capacity and the products that we produce here have not yet been in the volume that can be supplied to the Chinese market,” said Xaybandith, adding that there is a need for government support.
The volume of cross-border goods transported by the China-Laos railway had exceeded 1 million metric tons as of Aug 9, according to Xinhua News Agency. Of that total, the Lao section of the railway transported 1,076,500 tons, of which 263,400 tons went from China to Laos, and 813,100 tons in the opposite direction, with an average monthly growth rate of nearly 17 percent.
Opened on Dec 3 last year, the 1,035-kilometer line connects Kunming, the capital of Southwest China’s Yunnan province, with Vientiane, the capital of Laos. With train speeds reaching up to 200 kilometers per hour, the route slashes the travelling time between the two cities to 10 hours, from 30 hours by road.
Litthikay Phoummasak, president of the Small and Medium Enterprise Promotion Association of the Lao PDR, said business communities in Laos and neighboring countries like Thailand have been working seriously since the beginning of this year to make better collaboration in using the China-Laos railway to promote trade.
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“Many local investors invest in agriculture, logistics, warehouse and industrial property as (they expect) the Lao-China railway will make Laos the trade-logistic hub of the region,” Litthikay said.
Litthikay said there are still many issues that need to be improved to allow Lao businesses to have better access to the railway. These include high logistics prices charged by agents and a lack of an online ticket booking platform for passengers.
Noting news reports of an influx of Thai tourists as a result of the railway, Litthikay said it is important to make the ticketing process smoother and better regulated to support the recovery of the tourism sector, a key contributor to the Laotian economy.
In the past, Laos and China traded mostly just copper and rubber, but the railway has made it easier for other goods such as agricultural products to be exported to China, said Philaiphone Vongpraseuth, vice president of the Young Entrepreneur Association in Laos and CEO of the consultancy Solver Laos Sole Co.
Citing examples from her association, Philaiphone said that young entrepreneurs in Laos, especially those who live along the railway route, have been preparing to enter the cross-border trade business and seize new opportunities from the new line.
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The total value of Laos’ trade in July was $968 million, made up of $427 million in exports and $541 million in imports, according to Lao Trade portal website. China remained the country’s top export destination.
Most of the young entrepreneurs are focused on agricultural products to be exported to China, as well as tourism, which Philaiphone said she expects to grow threefold if the COVID-related border restrictions are lifted.
Xaybandith from the Lao National Chamber of Commerce and Industry said he hopes more guidance can be provided to local small and medium-sized enterprises as many of them still do not have much knowledge about how to use the railway. A more comprehensive logistics network around stations will also be necessary, he said.
Xaybandith said the railway provides opportunities for Laos to grow the capacity of high-end agricultural products related to green and healthy concepts, such as organic food, and export them to China.
“We would like to encourage Chinese businesses to make use of (the railway) and also invest more in Laos,” he said.
