Jiang promises more economic aid to Laos


Mainland Chinese President Jiang Zemin promised Laos more economic assistance Sunday as he sought to consolidate Beijing’s growing influence here with a first-ever state visit.

Officials declined to put a figure on the new package for mainland China’s impoverished southern neighbor and gave few details of what it would comprise.

But it is the latest addition to a growing volume of Chinese aid and investments here as Beijing moves to expand its influence in a country long dominated by communist rival Hanoi.

“The Chinese side is going to provide assistance to the Lao side within its capacity,” foreign ministry spokesman Zhu Bangzao told reporters after Jiang’s talks with Lao leaders. “I know the figure, but unfortunately I have not been authorized to tell you the number.”

Zhu said the package would include a new hospital and increased assistance in the agriculture and forestry sectors but gave few other details.

Lao officials credit Beijing with saving the economy from the currency freefall and spiralling inflation that followed the regional economic crisis of 1997-8.

When inflation soared towards 200 percent last year, Beijing provided a package of interest-free loans and export guarantees that helped stabilize the Lao kip and brought inflation down to some 30 percent.

But the mounting economic leverage of mainland China here has not yet succeeded in supplanting Vietnam’s longstanding position as Laos’s main political and security ally, diplomats say.