Thailand’s national railway opened a new passenger service to Laos this month, the latest addition to an expanding Southeast Asian rail network aimed at increasing cross-border traffic of people and goods with China.
The State Railway of Thailand (SRT) opened the new Bangkok-Vientiane line on July 19. The roughly 650-kilometer trip connecting the two capitals takes 12 hours, including cross-border customs checks.
The Bangkok-Vientiane railway offers one trip a day, with a choice of three classes of seating. A one-way ticket costs between THB 281–874 (USD 8–24).
All the roughly 270 seats on the train departing from Bangkok’s Krung Thep Aphiwat Central Station on July 19 were fully booked. Three friends who planned a two-day sightseeing trip to Vientiane were among the passengers.
“I hope to enjoy my first-ever trip to Laos,” said one of the trio, a 64-year old homemaker from Bangkok.
SRT anticipates a rise in tourism demand from China as well. Khamsavath Station, the last stop of the railway in Laos, is about 10 kilometers from Vientiane Station, which in recent years opened a high-speed connection extending to the southern Chinese city of Kunming. Officials believe the new line will make it easier for Chinese tourists to travel to the Thai capital through Laos.
The Thai government seeks to draw Chinese tourists by promoting domestic products. During the first two days of July, Bangkok hosted an event attended by about 200 people—mainly from the Chinese tourism industry.
The event featured the Thai cosmetic brand Mistine, among other products. Thai tourism authorities have also collaborated with a Chinese supermarket chain to host a promotional event in Shanghai to market Thai-grown fruit, according to Chinese media.
Thailand is also developing a freight rail network linking to China. Last December, cargo service from Rayong, Thailand to the Chinese city of Chengdu opened for business, as did a line between Bangkok and China’s Chongqing.
Each of the two freight lines makes use of the Laos-China railway, which is becoming a key artery for traffic between China and Southeast Asia.
The value of Thai goods reaching China after going through neighboring countries is expected to rise 17% this year to THB 250 billion (USD 6.88 billion), according to a March estimate by the private Kasikorn Research Center.
“Logistics via the China-Laos high-speed railway will play a greater role in cross-border and transit trade,” reads a report from Kasikorn. The freight will mainly carry durian fruit and other agricultural products for the time being, though expectations are high for increased exports of manufactured products as well.
In Malaysia, the ASEAN Express freight train service went into operation late last month. The cross-national line starts from Selangor state near the Malaysian capital of Kuala Lumpur, and traverses through Thailand and Laos before ending in Chongqing.
The whole trip on the ASEAN Express takes about nine days, according to Malaysia’s national rail operator Keretapi Tanah Melayu Berhad (KTMB), much shorter than the 2–3 weeks by sea.
The first train that departed Malaysia on June 27 carried farm products and other goods. Earlier that same month, the Chinese government agreed to allow fresh durian to be exported from Malaysia. Durian farmers anticipate exports to China will expand.
The ASEAN Express started off running twice a week, but it plans to transition to daily service. KTMB said in a press release that it is confident the railway “will facilitate the movement of goods, drive economic growth and strengthen trade relations” among countries in the Association of Southeast Asian Nations.
Ichiro Kakizaki, a professor at Yokohama City University in Japan and an expert in Southeast Asian studies, sees a “need to determine how much demand there is for the foreseeable future” regarding the ASEAN Express. But if the railway proves to be a worthy alternative to sea routes, it could “potentially prompt a reorganization of the supply chain,” said Kakizaki.
The Laos-China railway, which opened in December 2021, was built as a key project under Beijing’s Belt and Road Initiative (BRI). The plan is to build various extensions from the line to create a pan-Asian rail network.
But China-led efforts to develop a wide-reaching rail system has raised alarms.
“If China seizes control of rail operations, foreign companies will not be able to profit,” said an executive at a Japanese logistics firm based in Vientiane.
Laos’ external public debt is equivalent to 80% of its gross domestic product, and half is believed to be owed to China. If Laos fails to repay loans, it could fall into a “debt trap” in which China would take over its infrastructure, including the rail system.
As for the Thai and Malaysian rail lines connecting to Laos, the rail companies in the two countries are responsible for their operation. But the anticipated windfall from the linkages to the Laos-China railway also come with the risk of greater influence by Beijing.
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.