(Yicai Global) April 13 -- The China-Laos Railway, a more than 1,000-kilometer route that opened in 2021, has expanded from cross-border cargo to passenger services and is expected to be extended to Thailand in the future.

The route from Kunming, Yunnan province, to Vientiane, the capital of Laos, began transporting passengers across the border today, Yicai Global learned.

The project will spur trade between China and Laos, Kikeo Khaykhamphithoune, deputy prime minister of Laos, said on April 10.

The China-Laos Railway is the very first international railway for China to take a leading role in both investment and construction after the country initiated the Belt and Road Initiative. Consequently, the railway fully adopts Chinese technologies and standards and can therefore seamlessly link up with domestic tracks.

The Covid-19 Block

The railway was already finished in December 2021 but cross-border traveling was hindered due to the Covid-19 pandemic. Still, some 13.9 million passengers have traveled the domestic parts of the route as of April 9 and nearly 18.4 million tons of goods have been delivered, including 3.6 million tons across the border.

The high-speed railway can go up to 160 km per hour and thus make the 1,035 km trip in around 10 hours and 30 minutes, much faster than before as the journey of 500 km from the border town of Luang Prabang to Vientiane used to take 10 hours by bus. Second-class tickets for the full journey cost CNY542 (USD79) and first-class ones are priced at CNY864.

As the railway will transport both cargo and passengers, it will further boost Laos’ external economic partnerships, Ma Bin, deputy researcher at Fudan University, said to Yicai Global. Moreover, as the route goes through the landlocked country, it will improve the efficiency of the Southeast Asian nation's domestic logistics, per Ma.

The route will lower freight-transporting costs from Vientiane to Kunming by about 40 to 50 percent and such costs of Laos’ domestic routes will be slashed by 20 to 40 percent, the World Bank noted in a report.

The Thai Extension

The next challenge is continuing the route to Thailand. The Thai government will need to speed up signing agreements with relevant counterparties in Laos and China to achieve seamless links between Thailand’s railway networks and the China-Laos Railway, Danucha Pichayanan, secretary-general of Thailand’s National Economic and Social Development Council, said earlier. Otherwise, Thailand risks losing opportunities in trade, investment, and tourism, he added.

The first phase of the China-Thailand Railway, namely the Bangkok-Nakhon Ratchasima section, has started construction and is expected to kick off operations in 2027. The second phase, the Nakhon Ratchasima-Nong Khai section, is predicted to start construction by next year. Consequently, a route from Bangkok to Kunming should be ready by 2028.

The improved infrastructure has attracted tourists from Thailand and Vietnam to Laos, Yicai Global learned from Yi Runzhi, general manager of a travel agency, when taking the train last month. Some Thai travel agencies have even launched one-day trips on the high-speed railway as Vientiane is close to the border between Laos and Thailand, Yi added.

Tourism is a priority for Laos to recover and develop after the Covid-19 pandemic and cross-border transport between China and Laos should spur tourism growth, Thipphakone Chanthavongsa, deputy head of the Lao Prime Minister’s Office, said on March 29.

Editors: Xu Wei, Emmi Laine, Xiao Yi