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China Surpasses Thailand As Top Investor in Laos


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Lao authorities confirmed that China has surpassed Thailand to become the top foreign investor in Laos, and that their country's total trade values with China have also increased.

Laos' Minister of Planning and Investment Sinlavong Khoudphaythoune confirmed that China's investments in Laos now total more than US$ 3,577 million, increasing about US $187 million during the first six months of this year and concentrating in 12 manufacturing sectors, with the greatest investments going to agriculture, mining and electric power.

Mr. Sinlavong also confirmed that, for the first six months of this year, trade between Laos and China totaled US$ 326 million, up 62% from the same period a year ago, of which US$ 173 million was the values of Laos' exports to its northern neighbor. Thus, the Lao government is confident that by the end of 2009, the total trade values between the two countries will definitely exceed US$ 500 million. Lao authorities also expressed belief that the increase in trade values will provide a solid foundation for a further expansion of trade relations between these two countries, with the total trade values expected to reach one billion US dollars in the next three years.

However, Laos' overall exports dropped significantly during the first eight months of the current fiscal year, especially copper exports which plummeted over 60% compared to the same period of the 2007-08 fiscal year.

In addition, exports of electricity to Laos' major customer - the Electricity Generating Authority of Thailand of EGAT, decreased over 30% while coffee, garment, and handycrafts exports dropped almost 20%, 10% and 70% respectively.


Given this situation, Lao Prime Minister Bouasone Bouphavanh recently admitted that this challenging situation will inevitably prolong until next year. Meanwhile, Standing Deputy Prime Minister Somsavad Lengsavath reiterated that the government will take all possible measures to mitigate such negative impacts. One of those measures is to seek capital to fund agricultural production and to increase gold and copper mining industry for export, as well as to collect debt payments from various businesses that owed the government.

Songrith reports from Bangkok in Lao on September 05, 2009. Buasawan translated.

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