China-Southeast Asia Railway and Economic Development
In April 2023, the first high-speed passenger train was inaugurated between China and Southeast Asia, connecting the city of Kunming, the capital of China's Yunnan province, and Vientiane, the capital of Laos. The journey takes approximately ten hours and covers 1,035 kilometers.
The railway is a project that is part of the Belt and Road Initiative. It cost USD 6 billion and became operational in December 2021 initially for cross-border freight transit and in April 2023 for passenger transportation. The high-speed network aims to promote the movement of people and goods between Southern China and Southeast Asia, facilitating trade and logistics in the region.
This project holds historical significance and follows the connectivity initiatives of the region, which in the past also involved European countries. In fact, in the early 1900s, a railway connecting the city of Yunnanfu in China's Yunnan province to Hanoi was built, largely realized by Italian companies, workers, and technicians.
The new Kunming-Vientiane railway will increase bilateral and regional trade and investment with new job opportunities in the area and a revival of the tourism sector, thanks to the influx of Chinese travelers. The World Bank estimates that Laos' gross domestic product will increase by 21 per cent as a result of the railway construction.
In the first quarter of 2023, the ASEAN region confirmed itself as Beijing's top trading partner with a trade volume amounting to USD 304.6 billion. This includes USD 185.2 billion in exports to ASEAN and USD 119.5 billion in imports from China. Compared to the same period in the previous year, there was a 6 per cent increase in aggregated trade volume and a 15 per cent rise in China's exports to Southeast Asian countries.
This is the first segment of a larger project that will connect Beijing to Singapore with a 5,500-kilometer high-speed network through Laos, Thailand, and Malaysia, linking the capitals Vientiane, Bangkok, Kuala Lumpur, and Singapore. This aims to promote regional logistics, trade, and tourism.