Greater Mekong Subregion summit concludes in Laos, China pledges millions in aid to region

March 31, 2008 Posted by China Briefing Reading Time: 2 minutes

By Andy Scott

Mar. 31 – The third meeting of the Greater Mekong Subregion (GMS) opened in Vientiane, Laos on Sunday, bringing together the prime ministers of Cambodia, China, Laos, Myanmar, Thailand and Vietnam.

The ministers are meeting to discuss ways to deepen economic cooperation between their countries. They will also focus on poverty reduction, sustainable development, and expanding regional transportation and communication links.

The GMS was established in 1992 by the Asian Development bank as a means for promoting economic and social development, irrigation and cooperation within the six countries linked by the 4,200 kilometers of the Mekong River.

The river, which starts in Southern China and forms the border between Laos and Myanmar, weaves its way though Northern Thailand and Laos before cutting through Cambodia and emptying into the ocean in Southern Vietnam.

Cambodian Prime Minister Hun Sen, Chinese Premier Wen Jiabao, Vietnamese Prime Minister Ngueyen Tan Dong, Burmese Premier General Thein and Thai Prime Minister Samak Sundaravej attended the two-day summit, which is also being used to mark the official opening of the 1,800 kilometer “north-south corridor,” a network of roads stretching from Kunming in Southern China’s Yunnan province, through Laos to Bangkok.

Trade between China and the five other countries of the Mekong has risen dramatically over the past decade, from just over US$1 billion a decade ago, the region’s trade with China increased to US$53 billion in 2007 the New York Times reported.

China’s surging economy is a major contributing factor. China’s new found wealth has allowed it to invest in infrastructure projects in parts of the world less fortunate. For Cambodia, that meant US$122 million in foreign direct investment in 2007, 22.94 percent of FDI for the impoverished Southeast Asian nation. The United States by comparison, accounted for only US$616,982, or only .03 percent of the total FDI investment figures from the Council for the Development of Cambodia show.

China and Laos signed seven agreements on Saturday, including a RMB50 million economic development grant, a RMB50 million low-interest loan, a grant from China to renovate the national Nateuy-Oudomxay road, a credit loan to purchase a Chinese-made Z9 military helicopter, a fiber optic project, and a coal-fired electrical plant in Xayaboury province according to the Vientiane Times, Laos’ State-run newspaper.

The two-day summit will conclude today with the signing of a joint summit declaration between the six governments.