China eyes US$31b of investments in Laos border economic zone as it courts small neighbour

BEIJING (REUTERS) - China is eyeing total investment of more than 200 billion yuan (S$43.67 billion) in 240 projects in a pilot economic zone on the border with Laos, the government of the southwestern province of Yunnan said late on Monday (oct 19).

Poor and remote, Laos has traditionally been firmly in the orbit of its larger neighbour to the east, Vietnam.

But China has been aggressively courting Laos as it sees the country as an important route into Southeast Asia and its ports for landlocked parts of southwestern China such as Yunnan.

The Mengla economic zone in Yunnan province, covering an area of 4,500 sq km, was approved by the central government in July, according to state media. It abuts the far northern part of Laos.

A statement on the Yunnan government's news website said that the 240 projects will cover areas including energy, education and transport.

It did not say where the money would come from, nor how much had already been pledged by companies or the government.

Regional Chinese governments often announce headline-grabbing figures for schemes that are either only partially realised, or abandoned.

However last year China offered more than US$20 billion in loans and aid to Southeast Asia to improve infrastructure and for other projects.

The Mengla zone will be important for strategic cooperation between China and Laos, a comprehensive transport hub linking China with Southeast Asia and a growth engine for the border, Yunnan planning official Ruan Jianzhong was quoted as saying in the statement.

Railways to the border, as part of a link into Laos, and an airport for Mengla are all expected to be up and running by 2020, the official Xinhua news agency added.

Long term plans call for a railway connecting Yunnan down to Singapore.