Transborder Exports via China-Laos High-Speed Railway at Nong Khai Surge 4-Fold
February, 15 2024
The China-Laos high-speed railway has now expanded its cross-border passenger transport route from Vientiane, Laos, to Kunming, China, passing through the Nong Khai border crossing. Initially serving only domestic routes within Laos, this expansion allows for increased passenger and freight transportation between China, Laos, and Thailand. This presents a major opportunity for Thai businesses to expand trade and investment in China and Laos, as well as accommodate a rising number of Chinese and Lao tourists traveling to Thailand.
China: A Key Market for Thai Exports
China remains Thailand's largest export market, accounting for 12% of Thailand’s total export value. According to Krungthai COMPASS Research Center, cross-border exports to China have continued to grow, particularly through the China-Laos high-speed railway via the Nong Khai border. In 2023, total exports through this route reached nearly 10 billion THB, marking a fourfold increase.
The top exported goods include:
- Fresh and processed fruits
- Petroleum and bituminous oils
- Electrical machinery and equipment
- Electricity
- Automobiles and passenger vehicles
- Mineral water, carbonated water
- Plastic packaging materials
Meanwhile, the top imported goods via the railway include:
- Electricity
- Doped chemical elements for electronics
- Hydrogen
- Natural gas and non-metal minerals
- Mineral or chemical fertilizers
- Watch bands and parts
- Pipes, tubes, and hollow profiles
- Mobile phones for cellular networks
Top Exported and Imported Goods via High-Speed Rail
Exports (as of July 2023):
- Durian
- Plastic pellets
- Mangosteen
Imports (as of July 2023):
- Fertilizers
- Fresh vegetables
- Fans and motors
By 2030, total trade value through the high-speed railway is expected to increase to 27 billion THB. Products with high growth potential include:
- Fresh, chilled, and frozen vegetables and fruits
- Tapioca starch
- Copper and related products
- Natural rubber
- Rice
For the Laos market, key export opportunities include livestock, timber, and wood products.
Growing Chinese Tourism in Thailand
Yunnan Province, home to Kunming, is the starting station of the China-Laos railway. Tourists from Yunnan and four neighboring regions—Sichuan, Guizhou, Chongqing, and Guangxi—can now easily travel to Thailand via the railway. If just 1% of these tourists (about 2.5 million visitors) visit Thailand’s Northeastern region, this could generate at least 4.69 billion THB in annual tourism revenue.
Three Key Business Opportunities for Thailand
The China-Laos high-speed railway and supply chain shifts present significant opportunities for Thai businesses in three key sectors:
-
Trade
- High-demand Thai exports include fresh and frozen fruits and vegetables, tapioca starch, copper, livestock, timber, and wood products.
-
Services
- The tourism, transportation, and logistics industries will benefit from growing cross-border trade and a rising number of Chinese and Lao tourists, particularly in Thailand’s Northeastern provinces.
-
Investment
- Thailand can attract more Chinese investment, particularly in electric vehicles (EVs) and auto parts.
- Laos is also becoming a potential investment hub, particularly in real estate development in Thailand’s Northeastern region.
Additionally, Thai businesses have opportunities to invest in China and Laos, particularly in sectors where Thailand has expertise. Thai businesses can also source cost-effective materials from China, such as solar panels, lithium-ion batteries, and temperate fruits, to support downstream industries.
Future Prospects for China-Laos-Thailand Trade
Both China and Laos have strong market potential for Thai goods and services. Thai businesses should study investment regulations and analyze emerging trends in both markets.
The Thai government should accelerate railway connectivity between Thailand and the China-Laos high-speed rail, linking it with the Eastern Economic Corridor (EEC). Additionally, improving infrastructure and business environments will enhance trade and service expansion for Thai businesses, strengthening Thailand’s role as a key player in regional trade.