Twisted track for China's 'railway diplomacy'

In October 2013, during a visit to Thailand, Chinese Premier Li Keqiang spoke glowingly of Beijing's plans for a high-speed railroad that would whisk passengers to Singapore from Kunming, the capital of China's southern Yunnan province, in just 10 hours. Yet, despite numerous meetings, announcements and media coverage, Beijing has failed to advance its plans to build this railroad. The project, which would require 3,000km of track through Laos, Thailand and Malaysia, is still years away from construction, and at this rate, may never materialize.

Transnational infrastructure projects are a vital component of Beijing's plans to expand its regional influence. Critics characterize them as a more diplomatic equivalent of China's controversial moves to build artificial islands in the South China Sea. Besides facilitating China's regional economic integration, transnational infrastructure projects improve Beijing's leverage over other countries because they are frequently funded with loans from Chinese banks. As a result, Southeast Asian governments end up indebted to Beijing for many years. It is in this light that China's establishment of the Asian Infrastructure Investment Bank has become a concern for those who fear Beijing's increasing regional influence.

China sees railroads as an ideal type of transnational infrastructure project for Southeast Asia. In a very concrete way, railroads tie the fortunes of other countries to those of Beijing. Over the last decade, China has developed world-renowned expertise in railway construction. In Beijing, "high-speed railway diplomacy" has become a popular term in political parlance. At the same time, there is a desperate need for transportation infrastructure in Southeast Asia. It is widely understood that this infrastructure deficit hinders the region's economic growth, which plays to the advantage of China.

Regional resistance

The Kunming-Singapore railroad, however, faces many challenges. This reflects increasing resistance in Southeast Asia to China's use of transnational infrastructure projects to gain influence in the region.

In Laos, concerns over financial sustainability hinder any immediate implementation of a deal. The total cost of the Laotian section of the rail project is estimated at about $7 billion, equivalent to more than half of the country's gross domestic product. Loans to build the railroad would leave Laos burdened with debt. Laos has yet to agree to a financing plan to build the railroad, and some independent regional economists have indicated that funds might be better spent on other infrastructure development projects. Meanwhile, the Communist government in Vientiane has indicated it will submit a plan for approval of the project to the National Assembly in June, at earliest.

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