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China-Laos railway route from Vientiane to Kunming boosts exports in 2022
The opening of the China-Laos railway from Vientiane to Kunming on December 3, 2021, has resulted in more lively border trade and cross-border trade.
China-Laos Railway pushes exports in 2022
After the opening of the China-Laos Railway from Vientiane to Kunming, which opened on December 3, 2021, border trade and cross-border trade have become more active.
As can be seen from the figures for the first 10 months (January-October) 2021, the value of Thai-Laos border trade was 62,481 million baht, an increase of 23.75%, with Thailand exporting 53,005.54 million baht, or an increase of 37.79%, and importing 9,476.40 million baht, or a decrease of 21.18%.
This resulted in Thailand having a trade surplus of 43,529.14 million baht from Thailand’s total border trade and cross-border trade worth more than 1.4 trillion baht, expanding by 31.72% and is expected to expand by 30% this year, with a tendency to continue to be good until 2022, with an opportunity to grow by 6-8%.
Deputy Prime Minister and Minister of Commerce Jurin Laksanawisit said that he had a meeting with agencies within the Ministry of Commerce on December 6 to assess the situation. He had already given instructions that he wanted Thailand to be able to use the Laos-China railway to its fullest potential.
In addition to Thai travel, if border and cross-border trade can be carried out, it will be expedited. Starting from inviting exporters, all relevant parties, including the Joint Public and Private Sector Committee on Commerce (JPC) to discuss in Nong Khai Province to assess how it can be utilized.
While Mr. Bunyarit Kalyanamitra, Permanent Secretary of the Ministry of Commerce, said that a meeting will be held in Nong Khai Province at the end of December, with “Nong Khai” being the main connection point to utilize the route via the 1st Thai-Lao Friendship Bridge.
The latest news is that the Thai Logistics Federation is negotiating with Chinese agencies to sign an MOU to facilitate Thai products. The train will help reduce transportation costs from Kunming to Nong Khai, taking no more than 15 hours. Previously, if using a car, it would take 2 days from Kunming to Chiang Rai.
Tourism will grow along with the train. Chinese and Lao tourists will be able to travel to Thailand more easily. Next year, Laos plans to open the country, which will help support three major service groups: health services, department stores, hotels, restaurants, and educational institutions.
Mr. Kavin Viriyaphanich, Director of the Office of International Trade Promotion in Vientiane, said that he has been following up on the transportation of goods by train into China via the “Mohan Pass”. The Lao side can provide services such as inspection, plant disease inspection, and customs work.
While the work on goods, especially 8 major product groups such as meat products, frozen seafood products, grains, fruits, seafood for consumption, seedlings, logs, and high-risk animal and plant products, China is still preparing. It is expected to be completed within March-April 2022. Thai exporters will be able to export these product groups immediately, especially “fruits and vegetables” that can be transported across the border to China more conveniently and quickly.
Dr. Chaturong Bunnag, President of the Thai-Laos Business Council, initially assessed that the change to using the rail system will help reduce transportation costs by 67%, which will have a positive effect on the cost of Thai products, enabling them to compete. In 2022, if the use of trains begins to settle, there is a chance that Thai-Laos trade will grow by 15%, not including cross-border trade to China.
In addition, “we have not missed the train,” but may be a bit slow in preparing for rail transport, especially the construction of the second railway bridge, which must be expedited to reduce the missing link problem because the construction will take 2-3 years. In the past, there have been discussions with all 3 countries: Thailand, Laos, and China, said Dr. Chaturong.
Mr. Surachai Wichai, Director of the Strategy and Planning Group, said that from the assessment after the opening of the China-Laos Railway for 1 week, it was found that China sent 33 containers of vegetables in the first week and there is a tendency to send another 40 containers in the second week.
In terms of exports, China has set to open imports of three groups of products in the initial phase: rubber, cassava, and minerals. As for Thai agricultural products and fruits and vegetables, they must be sent through the “Mohan-Boten” checkpoint, which China has set to comply with 22 protocols, starting from September 23, 2021.
As for consumer goods in the form of ready-made packaging, “they still cannot be sent in.” There is also an acceleration of the push to increase the number of checkpoints at two locations: the Nong Khai-Tha Sadet checkpoint and the Ban Mo relaxation checkpoint, which have exports worth billions of baht per year.
Information source: Prachachat Business
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