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China’s influence rising in Laos

The man widely expected to become China's next leader will seek to boost his country's fast-growing ties with Laos during a visit on Tuesday, as Beijing competes with Vietnam for influence in the small but resource-rich nation, observers say.

Vice-President Xi Jinping will meet his Laotian counterpart during the 'very important' one-day stop, Lao government spokesman Khenthong Nuanthasing said, as reported by AFP.

China, along with Vietnam and Thailand, is among the top investors in Laos, and trade links are 'growing very fast,' said the World Bank country economist for Laos, Somneuk Davading. Trade between the two countries reached about US$500 million (S$699.8 million) in value last year, he said. Imports are expected to continue growing while mineral, agricultural and wood exports from Laos will also rise, Mr. Somneuk added.

Ian Storey, a fellow at the Institute of South-east Asian Studies (ISEAS) in Singapore, said it would not be a surprise if several major deals were announced during the visit by Mr. Xi, the heir apparent to President Hu Jintao.

China is particularly keen on investing in rubber plantations to supply its automotive industry, and in hydroelectricity, Mr Storey said. It has also devoted a lot of money to upgrading Laos's transport network to help Chinese goods reach Thailand, a major trading partner and regional hub, he added.

Mr. Xi is on a regional tour that takes him to New Zealand and Australia after Laos. He began his trip in Bangladesh with talks on improving defence ties and building a deepwater port, officials there said.

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