From gleaming rail lines to enhanced trade ties, region taps opportunities

For travel business owner Benny Kong, the China-Laos Railway has brought many benefits over the past year, and for many others, it's creating a buzz over yet another transformative infrastructure project improving lives in Southeast Asia.

"The occupation rate of our hotels has seen a rise of 20 to 30 percent after the railway opened to traffic," said Kong, who owns two hotels in the northern region of Luang Prabang, one of the famous tourist destinations in Laos. "Thanks to the line, interprovincial tours are convenient and fast for local people and tourists."

Currently, several trains are running on the Lao section of the railway every day but they can barely meet the demand, said Kong, adding that it's very difficult for his travel agency to get tickets for his clients in advance and he hopes in future more trains would be put into operation.

"The trains are popular. Local people are excited because they are able to travel faster with less cost. For tourists, the clean, well-designed trains not only cut a lot of travel time but also provide them with high-quality service. Many people want to go to Laos now, it (the China-Laos Railway) helps us a lot."

Kong said railway infrastructure is crucial to Laos, a country that lacked rail transport due to its mountainous terrain.

The China-Laos Railway has brought a lot of economic benefits for the country and its people, said the hotel owner, who is looking forward to even bigger gains for the travel industry after more trains are put into service on the line.

The line connects Kunming in Yunnan province with the Laotian capital Vientiane. The 1,035-kilometer railway, a landmark project of the China-proposed Belt and Road Initiative, started operations in December 2021.

Marking the first anniversary of rail operations, Lao Deputy Prime Minister Sonexay Siphandone on Dec 3 hailed the infrastructure project's contribution to Laos' socioeconomic development.

The cross-border railway, which has become a gleaming symbol of the Laos-China friendship, has succeeded in converting Laos from a landlocked country to a land-linked hub able to take advantage of the synergies flowing from the BRI, he said.

According to the China State Railway Group, as of Dec 2, the China-Laos Railway has handled over 8.5 million passenger trips and transported 11.2 million metric tons of cargo since its launch a year ago.

For the section in China, the railway has handled 7.2 million passenger trips since its launch, with the maximum number of trips reaching 50,000 in a single day. On the Lao side, 1.3 million passenger trips have been logged over the period, with the daily figure reaching 8,200.

Ju Guojiang, chairman of the Laos-China Railway Co, a Vientiane-based joint venture responsible for the Lao section, said the railway has carried nearly 2 million tons of goods, including some 1.6 million tons of cross-border goods, as of early December. Ju said that the company has also cultivated local talent for the railway with more than 100,000 jobs created.

Elsewhere in the region, the G20 Summit in Bali in November put another railway line under the international spotlight.

The Jakarta-Bandung High-Speed Railway, which is expected to begin operations by June 2023, is a flagship project that synergizes the BRI and Indonesia's Global Maritime Fulcrum strategy.

Designed for speeds of up to 350 kilometers per hour, the high-speed railway built with Chinese technology is expected to slash the traveling time between the Indonesian capital and Bandung to just 40 minutes from over three hours, boosting economic competitiveness in regions along the route. Each of the two rail lines is often seen as a poster child for cooperation between China and ASEAN countries under the BRI framework, facilitating a more open and dynamic regional economic integration.

Leaps and bounds

Song Qingrun, associate professor at Beijing Foreign Studies University's School of Asian Studies, said that over the past three decades, relations between China and the Association of Southeast Asian Nations have developed by leaps and bounds.

The two sides established a dialogue mechanism in 1991, and formed a strategic partnership for peace and prosperity in 2003, elevating it to a comprehensive strategic partnership in 2021.

Economic and trade cooperation has been a highlight in China-ASEAN cooperation. The value of trade had jumped from less than $8 billion in 1991 to $878.2 billion in 2021, an increase of more than 100 times.

In 2020, ASEAN became China's largest trading partner for the first time. In addition, China has remained the regional bloc's largest trading partner for 13 consecutive years. Two-way investment exceeded $340 billion by the end of July this year. For 2021, China's investment in ASEAN countries reached $14.35 billion; in turn, they poured $10.58 billion into China.

During the first 10 months of 2022, China's imports and exports to the other 14 countries of the Regional Comprehensive Economic Partnership posted a growth of 8.4 percent. The expansion attests to the regional trade liberalization driven by the trade agreement.

With Jan 1 marking the anniversary of the implementation of the RCEP, Liang Haoguang, director of the China Center for Modernization Research at the Chinese Academy of Sciences, said the trade pact has got off to a good start.

The RCEP covers a market of 2.2 billion people in territories with a combined economic size of $26.2 trillion, or 30 percent of the world's GDP. It comprises 15 Asia-Pacific countries: the 10 ASEAN member states and China, Japan, South Korea, Australia and New Zealand.

Under the free-trade agreement, more than 90 percent of trade in goods within the region will eventually be tariff-free.

"The RCEP has promoted regional trade and investment liberalization, lowered tariffs, removed intraregional trade barriers, and boosted economic integration in the Asia-Pacific region," Liang said. "It is an all-dimensional and multiform cooperation platform that has injected strong impetus to the post-COVID-19 economic recovery in the region."

Farmers have been among the main beneficiaries. From Cambodian rice to Thai fragrant coconut and Vietnamese passion fruit and durian, a growing number of agricultural products from ASEAN countries have easier access to the Chinese market thanks to the RCEP.

"Since the RCEP went into effect, especially after China recently allowed imports of a number of Vietnamese agricultural products such as durian, bird's nest, sweet potato and passion fruit, Vietnamese enterprises nationwide, including our company, have found big opportunities to export new products to our northern neighbor," Dinh Gia Nghia, deputy general director of Dong Giao Foodstuff Export Joint Stock Company in the northern province of Ninh Binh, told Xinhua News Agency in December.

He said that with the upcoming Lunar New Year Festival, the demand from the Chinese market will account for more than 50 percent of Vietnam's fresh fruit exports.

In 2023, Vietnam's fruit and vegetable exports to China may increase by 20 to 30 percent, mainly thanks to smoother transport, quicker customs clearance, lower tariffs under the RCEP, and e-commerce development, Nghia said, adding that his company is also looking forward to exporting frozen durian to the neighboring country.

"Besides durian, other fruits such as passion fruit, banana, pineapple, and mango still have many opportunities for export growth to China, as long as they meet the requirements of Chinese partners, like complying with full and strict procedures from planting to harvesting, preserving and packing," he said.

So far, at least 66 kinds of fruit from nine countries, including Vietnam, Thailand, the Philippines, and Cambodia, have gained approval to be imported into China.

Shared prosperity

In a summit to commemorate the 30th anniversary of China-ASEAN dialogue relations in November 2021, Chinese President Xi Jinping called for harnessing the role of the RCEP, beginning work toward a new round of upgrading of the China-ASEAN Free Trade Area at an early date, and enhancing the level of trade and investment liberalization and facilitation.

"China stands ready to work with ASEAN to grasp the overriding trend, remove interference, share opportunities and promote shared prosperity. We will implement in earnest our Comprehensive Strategic Partnership, and make new strides toward building a closer China-ASEAN community with a shared future," he said via video link.

Liang said that China and ASEAN countries are close neighbors bound by traditional friendships and a shared future. For the past year, the two sides have strengthened cooperation, which has injected a vital impetus into efforts for the post-pandemic economic recovery within the region and the world as a whole.

"As a regional economic free-trade agreement, the RCEP will gradually unleash great potential for its member states' cooperation in different areas," Liang said. "It has helped create new business and employment opportunities, strengthen supply chains in the region, and promote the participation of micro, small and medium-sized enterprises in the regional value chains and production hubs."

Liang said that more business opportunities for RCEP member states in the next three years are expected to mushroom, covering areas such as new energy technology, artificial intelligence, green investment and financing.

Following the successful implementation of the RCEP, China and the ASEAN countries announced the launch of negotiations on the 3.0 version of the ASEAN-China Free Trade Area, or ACFTA, during the East Asia Cooperation Leaders' Meeting held in Cambodia in November, opening a new chapter on regional cooperation.

Version 1.0 of the China-ASEAN Free Trade Area was established in 2010. In 2019, the upgraded version 2.0 was launched.

Shi Zhongjun, secretary-general of the ASEAN-China Center, told the Global Times that the 3.0 version of the ACFTA will focus on industrial cooperation and trade and investment liberalization and facilitation, as well as the digital economy and the green economy — the latter fields representing new areas of cooperation that deserve special attention.

"The initiation of the negotiation is an inevitable result of the close economic and trade cooperation in the region and the detailed division of labor," Shi said. "The 3.0 version of the ACFTA is the common aspiration of ASEAN member states and China for future development, and it will make the economic and trade ties between the two sides closer than ever."

Xinhua contributed to this story.