Editor's note: In this weekly feature China Daily gives voice to Asia and its people. The stories presented come mainly from the Asia News Network (ANN), of which China Daily is among its 20 leading titles.

On a high-speed train departing Lao capital Vientiane and heading north one morning, Vongthong Somphavath, a resident of the world heritage town of Luang Prabang, said she could now enjoy making round trips to the city and beyond, all within a day.

Vongthong, 27, said the China-Laos Railway was a game changer. She reminisced about her childhood when visits to other parts of the country were rare due to the treacherous and time-consuming mountain roads. Her story is not unique, but shared by many people living in the north.

"It was not just a month, or months; it could be a year or more before we got the chance to visit Vientiane," Vongthong said.

Those difficult days of travel have become a thing of the past since Dec 3, 2021, when the China-Laos Railway came into service after full-scale construction began in 2016.

It now takes about two hours to travel from Vientiane to Luang Prabang and another two hours to reach Boten in Luang Namtha Province that borders China, compared to at least eight and 15 hours, respectively, by road previously.

Landlocked to land link

The railway — part of the Belt and Road Initiative proposed by China in 2013 — has alleviated landlocked Laos' transport challenges, unlocking its potential as a transit hub for the region and beyond.

Spanning 1,035 kilometers connecting Vientiane to Kunming, capital of Southwest China's Yunnan province, the China-Laos Railway is integrating into the major trans-Asian railway, enabling trains to carry freight from Southeast Asia to China and onward to Kazakhstan, Russia, Belarus and Poland, before reaching Duisburg in Germany. It takes just 14 to 21 days from Southeast Asia to Europe by rail, compared to 45 days by sea.

"The railway has become an important trade gateway between China and ASEAN," Saleumsak Sayamoungkhoun from the Lao Ministry of Public Works and Transport told Chinese and Southeast Asian journalists during their recent eight-day 2024 ASEAN Media China-Laos Railway Tour, which involved a journey from Vientiane to Kunming.

While waiting for the standard-gauge China-Laos Railway to link up with the tracks of Thailand, Malaysia and Singapore to form a broader Pan-Asian network linking Kunming to Singapore, the region has already been benefiting from the current network, which converges the standard and one-meter gauges.

ASEAN Express — a freight train system linking Malaysia to Thailand, Laos and Southwest China's Chongqing — recently completed its first round trip. Carrying 20 wagons loaded with containers, the freight train departed Selangor in Malaysia on June 27, passing through Thai capital Bangkok before crossing the Mekong River and entering Laos.

At the Thanaleng Dry Port, Laos' integrated logistics center in Vientiane, containers were off-loaded from the train on the one-meter gauge Laos-Thailand railway onto a train on the 1.435 meter-gauge China-Laos Railway running northward to Chongqing, taking nine days for a one-way journey compared to 14 to 21 days by sea, resulting in cost savings of about 20 percent.

With the closer links, many entrepreneurs in Thailand, Laos and China said they are looking to ride the wave of regional integration.

Opportunity, not debt trap

Both passenger and freight traffic on the China-Laos Railway has exceeded targets with a high growth rate, according to Liu Hong, general manager of the Laos-China Railway Company, in which the Lao side holds a 30 percent stake and the Chinese side a 70 percent stake — operating the Lao section of the railway.

In 2023, the Lao section of the railway carried up to 2.594 million passengers, a year-on-year increase of 85.8 percent. China-Laos cross-border trains carried 111,000 passengers during the same period and freight transport rose to 4.089 million metric tons, a year-on-year increase of 83.1 percent.

The link's annual volume of passenger and freight traffic is close to reaching the annual target set for its first decade, or a targeted 3.6 million passengers and over 5 million tons of freight, significantly earlier following its rollout.

With such strong figures, "we, as the company, are able to repay debts", said Anongdeth Phetkaysone, deputy managing director of the Lao Ministry of Public Works and Transport and deputy general manager of the Laos-China Railway Company, referring to the financing for the Lao section of the $5.9 billion project.

Lao President Thongloun Sisoulith told media in May 2023 in Tokyo that the railway has bolstered Laos' efforts to transform the country from landlocked to land-linked, sparking hope for driving socioeconomic development, and that it is definitely not a "debt trap".

"We have been hearing rumors about this 'debt trap' and I just want to clarify that this is not the reality that is facing our country," the Lao leader was quoted as saying, adding that Lao people are proud of the nation's first high-speed railway.

The railway "has contributed immensely to our economy and will certainly provide a very better future for us", he said.

Piti Srisangnam from Thailand's Chulalongkorn University told media that the China-Laos Railway is far more profitable than to be categorized as a "debt trap", given that freight volume — the railway's main revenue source — in 2023 doubled the break-even point, or the point at which total cost and total revenue are equal, of 2 million tons a year.

"This project is the opposite of the debt trap status. It is an important source of foreign currency flowing into Laos," said Piti, who has been teaching international economics and ASEAN studies at the Chulalongkorn university since 2002.

"To understand this (debt trap) narrative, we must first understand what a debt trap means."

The lecturer explained that "debt trap" criteria are met when a country, the creditor, is well aware that a project is not profitable, but gives away a loan anyway in order to lure another country, the borrower, into a debt trap with the purpose of damaging the borrower's economy.

But the rail project cannot be considered as such because China is not just the creditor but also a borrower and owner of the project via the joint company for up to 70 percent, which means Laos is responsible for 30 percent, amounting to just $1.4 billion to $1.6 billion of the project, Piti said.

China is not unwise enough "to invest in a project that will certainly go bankrupt", said Piti, who is also executive director of the ASEAN Foundation, adding that ensuring profitability is a win-win approach.

Many observers shared this view, justifying that if this major BRI project is a "debt trap" and does not prove successful in Laos, then the global infrastructure drive is unlikely to gain support elsewhere.

Driving industry

As Laos becomes an effective land link to regional and global supply chains, investors are tapping opportunities, pouring capital into developing and conducting businesses in 12 special and specific economic zones across the country, advancing the Lao government's efforts to drive and sustain growth and diversify the economy away from heavy dependence on natural resources.

Established in 2010 in the heart of Vientiane, the Saysettha Development Zone has attracted 150 major companies from countries such as China, Thailand, Japan, Malaysia, Singapore and Switzerland, with combined investments of about $2.3 billion, creating at least 7,000 jobs for local workers, according to latest industry figures. Companies carrying out manufacturing operations in the area enjoy investment incentives such as tax breaks, low labor costs and cheaper electricity.

Manufacturers also enjoy improved access to major markets in countries that provide exemptions or reductions of import tariffs on goods made in Laos.

Chanthone Sitthixay, the developer and operator of the Thanaleng Dry Port — is turning 327 hectares of land near the first friendship bridge across the Mekong River, also known as the First Lao-Thai Friendship Bridge, which connects Laos and Thailand, into a modern logistics park, leveraging Laos' position as a regional and global connector.

The $547 million project includes a plant and animal quarantine facility, logistics park and export processing and free trade zones. The Lao investor is also considering building a landmark shopping center to leverage the growing tourism industry as high-speed trains bring in more tourists and shoppers.

The recent inauguration of express trains connecting Bangkok with Vientiane is adding significant momentum to the flow of tourists across the region.

Lao Deputy Minister of Information, Culture and Tourism Darany Phommavongsa said the high-speed railway has made a significant contribution to facilitating both domestic and international travel, driving robust growth.

In the first four months of this year, Laos welcomed more than 1.5 million foreign tourists, an increase of about 35 percent compared to the same period last year, according to industry figures.

Chinese tourists numbered at least 351,000, making China the third largest source of foreign visitors to Laos after Thailand and Vietnam.

Darany said Laos is striving to develop more tourist attractions, upgrade infrastructure and improve hospitality services to meet the growing market and maximize benefits from the sector.

As the railway makes Laos more attractive to investors and creates new jobs, the World Bank projected that the transport network could potentially increase aggregate income in the country by up to 21 percent over the long term.

To achieve this, the bank emphasized that Laos should undertake bold policy reforms to facilitate trade and improve connectivity and the business environment.

"These reforms will be necessary to make the country more attractive as a new investment destination," it recommended.

VIENTIANE TIMES