Laos says railway to China finished by 2014

BEIJING | Tue Dec 7, 2010

BEIJING (Reuters) - The poor and landlocked Southeast Asian nation of Laos expects its rail link with China to be finished by 2014, boosting trade links with its giant neighbour and the rest of Asia, its deputy prime minister said on Tuesday.

The railway is part of a broader plan to connect Kunming city in southwestern China with Singapore, including Thailand, Myanmar, Cambodia, Vietnam and Malaysia.

The country's Deputy Prime Minister, Somsavat Lengsavad, told a conference in Beijing that the Laos-to-China part of the railway should start construction early in 2011 and take four years to complete, after the two sides signed an agreement in April.

"To free our country from the least developed status ... our government has invested much in communication infrastructure development in order to complement both intra-ASEAN and ASEAN-China integration," he said.

"We believe that this project will contribute significantly to the socio-economic development of Laos, as well as to the promotion of economic cooperation between ASEAN and China," Lengsavad added.

The railway will also help with "the masterplan for ASEAN connectivity and the implementation of the ASEAN-China free trade area", he said. It would be a "high speed" line, Lengsavad added, without elaborating.

Laos is already connected to Thailand by rail, though only up to just outside its capital Vientiane.

The Association of Southeast Asian Nations (ASEAN) groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

A China-ASEAN Free Trade Agreement came into effect in January, forming an economic bloc of 1.9 billion people.

Chinese companies are increasingly involved in logging and hydropower projects in Laos, and Chinese aid has helped build roads, markets and other infrastructure in the country, challenging Laos' traditional close ties with Vietnam.

Bilateral trade between China and Laos grew by more than half in 2009 to $751.8 million.

(Reporting by Ben Blanchard; Editing by Ken Wills)