In Geopolitics Today - Wednesday, August 25th
Laos to Benefit from China’s BRI and Fierce Competition Over the Control of a Port in Lebanon
Laos to Benefit from China’s BRI
This month will see the final tracks laid down on a 420 km high-speed railway line in Laos. The Boten–Vientiane railway, due to be operational at the end of this year, is part of China’s Belt and Road Initiative (BRI) and will link the southern Chinese city of Kunming with Vientiane, the capital of Laos. The railway is a section of a transport corridor which is expected to eventually form a part of Beijing’s broader plan to assist in the construction of a future railway link stretching all the way to Singapore.
But Laos could be the greatest beneficiary of the new railroad, forming a part of Laos’ own strategic vision to transition from an isolated and landlocked power to one that is linked to the region with the goal of fostering economic development. While there are some who argue Laos could become nothing more than a transit point for China’s goods and influence, it is difficult to deny the high-speed link and other transport projects associated with the BRI will drastically reduce transport costs and boost trade for the country. For the leadership in Laos, the rewards of Chinese infrastructure investments largely outweigh the risks.
The highways and railways built under the BRI will bring a promise of development to Laos, a country with mountainous and rugged terrain which hinder the transport of goods. With modern infrastructure, Laos will possess a greater chance of realising its economic development ambitions due to a drastic reduction in transport costs both domestically and with the wider region. Once fully operational, the transport network built under BRI will also have the effect of facilitating the movement of peoples and capital, acting as a major driver of economic growth.
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Fierce Competition Over the Control of a Port in Lebanon
The Mediterranean is perhaps one of the most consequential regions undergoing rapid geopolitical changes. Along much of the entire eastern Mediterranean, global and regional actors are actively competing over contracts for port construction and expansion projects in a bid to influence global trade flows. The competition to rebuild a port in Beirut is one such case which is part of a wider phenomenon that is reconfiguring the commercial architecture of the maritime space.
The participation of major Chinese shipping firms in the bidding process over Beirut's port has particularly raised alarm in Washington and some European capitals, who together (albeit with differing convictions) seek to check China's already influential position as a majority stakeholder of commercial ports in Egypt, Israel, and Greece. If successful in its bid, China would be well-positioned to pursue its interests over much of the trade and commercial activity of the Levant. Moreover, Beijing would be able to shift the flow of goods between Europe and Asia in line with its Belt and Road Initiative, significantly enhancing China’s influence over much of the Middle East.
To prevent this reality, one way to offset China's reach into the Levant may be to incentivise France and Turkey — two key players in the Mediterranean who are often at odds — to jointly outbid China and rebuild Beirut's port without Chinese investment. While France is well positioned to take the lead in this regard, with its shipping giant CMA CGM the favourite to win out the bidding process, it may not be able to directly compete with Chinese proposals alone. Given Turkey's expanding maritime role in the Mediterranean, a joint Franco-Turkish bit may be the most strategic way to balance against China in the eastern Mediterranean.
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