The Lao-China railway (also known as theBoten-Vientiane railway) is part of six internationaleconomic corridors under China’s belt and road initiative(BRI). As part of the BRI, the Vientiane-Boten railwayconnects Lao Peoples Democratic Republic (PDR) with not onlyChina (and eventually Singapore) but also the entire BRInetwork. The railway section that connects Kunming in Chinawith Vientiane in Lao PDR is under construction, with plansto build a railway terminal close to export processing zones(EPZs) and the logistics park in Vientiane. The Thai railwaysection is designed to carry passenger trains on a newhigh-speed network while moving cargo traffic to the oldmeter-gauge network, creating potential challenges fortransloading goods and passengers. The Lao-China railwayaims to create closer trade linkages between not only LaoPDR and China but also between all economies in the BRI,which is expected to lower trade costs and accelerateeconomic growth and poverty reduction in the region. Tofully benefit from the railway investment, Lao PDR needs todevelop efficient services and production along the railwaycorridor to outcompete maritime transport in terms of costand time. Increased domestic and foreign private-sectorinvestment will also require early information sharing withthe private sector regarding planned railway operations.Policymakers need to adopt key policy reforms and buildcomplementary infrastructure to connect production areas tothe railway network. This study identifies key investmentsand policy reforms to maximize the benefits of theVientiane-Boten railway for Lao PDR, demonstrating thecomplementarity of hard and soft infrastructure investments.
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