China just became the biggest investor in Laos, and Laos’s neighbors are worried


Land-locked Laos is one of the poorest countries in the world, but it has one thing in abundance: access to the massive Mekong River. The country’s hydropower potential has earned it the nickname « the Battery of Asia » and made it a magnet for investment from its neighbors: Thailand, southeast Asia’s second-biggest economy; Vietnam, a strategic Communist ally since the 1970s; and China, which is writing checks that put the rest to shame.

Guan Huabing, Beijing’s ambassador to Laos, announced today (Jan. 30) that China’s cumulative investment in Laos now stands at $5.1 billion, edging out Thailand and Vietnam. China is also building a controversial railroad linking its Yunnan province to the Lao capital Vientiane, at a cost of $7.2 billion that it is loaning to Lao government—equivalent to 75% of the Lao GDP.

Annual foreign direct investment in Laos

China’s increasing influence has long been a worry for Vietnam. It “feels threatened” by its…

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