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NEWS UPDATES Asean Affairs        30  May 2011

Laos fears growing Chinese presence

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At casinos in the Laos town of Boten, guests are greeted with a deferential "ni hao", "hello" in Mandarin Chinese.

This casino is not in China, where gambling is strictly forbidden, but across the border in Laos.

Investors have leased the whole town and its surroundings from the Lao government for 60 years. In Boten, the road signs are all in Chinese, staff in the hotels speak Mandarin, and the town's main strip is a line of food stalls selling dumplings and fried duck, outside which young Chinese prostitutes parade up and down until all hours of the night.

Chinese investments in northern Laos go beyond casinos. Chinese rubber companies have started building offices in nearby Luang Namtha. Over the border, China's Yunnan province is a booming global rubber processing industry, producing rubber for everything from car tires to condoms.

But with no room left to plant more trees there, Chinese companies are looking farther. The Lao government believes it has spotted an opportunity.

Gambling that Chinese rubber money could open a fast track to development in the region, it has offered generous incentives in the form of tax breaks and land concessions. Ban Chagnee is a Lao village in one of those concessions.

The Lao government argues that the strategy of trading villagers' land in exchange for jobs is necessary to benefit the country as a whole.

A rubber plantation requires three or four people per acre to maintain it once in full production.

Add up all the land ceded to Chinese companies already, and that means over a million people are going to be needed.

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