How the Chinese Diaspora is Changing Laos16 min read

Juliet Lu and Wanjing Chen explore the impacts of the Belt and Road in Laos

There is something about China – perhaps it’s size, perhaps it’s foreignness to Western audiences, or perhaps the simple fact that it is a new global economic power – that lends to vast oversimplifications and doomsday portrayals of the country’s global integration. China’s increasing presence overseas is one of the topics on which this oversimplification gets the most play. Summary statistics and breathless reports give the sense that Chinese firms parachute into countries, checks in hand, and unilaterally determine what to build, grow, and extract. But in order to understand how China’s global integration is unfolding on the ground, we need to ask a few questions. How does this emerging wave of investment actually take root on the ground? Through what channels does Chinese money flow, and through whose hands?

Investing in new country contexts is a laborious process that requires a diverse set of actors who can assemble disparate resources and apply niche expertise to carefully facilitate investment deals. Long before the Belt and Road Initiative (BRI) was announced in 2013, waves of Chinese migrants struck out into the world to make a living beyond China’s borders. These pioneers are now positioning themselves as brokers to the various investment projects encapsulated in the BRI, serving as pivotal in-country links but also taking advantage of newer, more naïve arrivals. They pave the way for the current day globalization of Chinese capitalism with their years of experience, knowledge of cross-cultural business and cultural norms, and social and cultural capital in host countries.

We believe it is important to understand China’s global integration not only from the point of view of elites, but also from the civilian perspective. Our field research aims to uncover some of these perspectives from a handful of Chinese migrant pioneers-turned-brokers of Chinese capital in Laos. They are not the face of Chinese investment which normally comes to mind – polished government officials and suit-wearing state owned company CEOs. Instead, we point to the hidden army of people who draw, direct, and enable the flows of capital into new contexts and unsettle the tendency (which dominates coverage of the BRI) of grouping Chinese actors into one monolithic category.

The View from China’s Backyard

Although a majority share of Chinese global investment has been in Southeast Asia, reporting and research on China in the region has been noticeably less alarmist and negative than that on China in Africa and other regions of the world. This is partly because Chinese traders and investors are neither new nor the only foreign investors active in the region. As early as the 16th century, sojourners and settlers from coastal China had already formed enclaved communities across the region through sea-based emigration. Over land, upland ethnic groups in southwest China were particularly mobile and heavily engaged in trade with their neighbors in mainland Southeast Asia. More recently, during the Reform and Opening Era, the Chinese state relied heavily upon the Chinese diaspora in Southeast Asia (referred to as the “Bamboo Network”) for investment capital to kick start the country’s economic reform and eventual dramatic rise.

The Lao PDR is an especially interesting country from which to examine the role of the Chinese diaspora in the making of the BRI. A diverse set of communities have come from China and settled in Laos during different periods, from long established groups of Yunnanese traders who migrated generations ago and now refer to themselves as the ‘Ho,’ to Lao refugees who fled to China during the civil war in the 70s and 80s and returned in the 90s to resettle or just establish trade links, to more recent arrivals seeking a wide range of economic opportunities. The Chinese community in Laos is thus highly diverse; they have come from a mixture of places within China, arrived at varying times for different reasons, and hold contrasting class positions and occupations. But as the country’s global economic import grows, this diverse group of pioneers position themselves strategically and rearticulate their links back to China as they come into new roles as bridges between Laos and China.

The Chen Family and Chinese Business Associations in Laos

Chen Li had been doing business in Laos for over two decades by the time we met during my preliminary fieldwork interviews. I stumbled upon his company headquarters, a converted two-room Lao home in the tiny provincial capital of Luang Namtha. He was sitting inside in a tank top pulled up to rest on his belly, pants rolled to his knees exposing a pair of pink plastic slippers. Despite the tropical heat, I sipped steaming tea with him under the light buzz of a ceiling fan in his office and we talked about how he had come to Laos. Lao Chen (老陈), as he is referred to by those familiar with him, is the son of migrants from Hunan Province who came to the borderlands of Yunnan to tap rubber in the 1960s. His parents answered Chairman Mao’s call to secure the border by working on the rubber plantations of Yunnan’s State Farms – former border military units turned state agribusiness operations after 1949. Like workers in most state-owned enterprises, Lao Chen enjoyed a certain level of security as a State Farms worker but wages were abysmal and would never allow him to build a better life for his children.

So, in the mid 1990s, he scraped together enough savings to strike out and begin a modest trade enterprise importing fertilizer and rice seedlings from China to sell to Lao farmers. Soon he began lending maize seeds on credit and in the early 2000s, turning back to his roots in rubber, Lao Chen managed to secure a small plot of Lao state land to establish a rubber plantation, which he supplemented by contracting nearby villagers to grow their own plots which he helped them manage. By the time we met in 2017, his hair had begun to gray and he had hired Lao staff and a few relatives to run the day-to-day operations of his trade enterprise. His son had also moved from China to take over the rubber plantation. “I just come to check on things occasionally,” he explained as he showed me his border pass which allows Lao and Chinese citizens like him who reside within a few kilometers of the border to cross between the two countries for short-range trips lasting up to 10 days without having to apply for a visa. “It’s convenient enough to come, just an hour or so with the new road” he shrugged, “but my wife is tired of coming here all the time … and keeps asking me when these investments will pan out and we can retire.”

Just as we were ending our interview, Lao Chen’s cell phone rang and he paced around the front porch chatting loudly in his native Hunan dialect as I cracked sunflower seeds and drank my tea. After hanging up, Lao Chen insisted I join him for lunch and promised I’d meet other Chinese investors to interview – “don’t be polite” he chided as he opened the passenger door of his truck for me. “Lunch is at our local Hunan Business Association, I’m the founding member” he beamed, and we sped off down the cracked road a few short blocks to one end of the town’s main drag. I had imagined something akin to an American Chamber of Commerce, perhaps an office building adorned with state slogans of Sino-Lao friendship. Instead, we pulled into the dusty yard of another converted Lao home next to a few haphazardly constructed meeting rooms and a dilapidated sign that announced in peeling letters the business association in Lao and Chinese. Off the house, a dining area had been built with a few wooden beams and a corrugated aluminum roof. The table was set with a combination of Hunan and Yunnan staples, and a few Lao style salads with bottles of Beer Lao served with ice. Lao Chen introduced me hastily before diving into a hurry of handshakes and gossip.

As I have learned is common in Chinese migrant communities across Laos and elsewhere, Lao Chen’s business association was less of a formal organization than a loose group of friends from the same origin province in China. In other towns in Laos I would encounter the Liaoning Business Association, the Guangdong Business Association, and many other groups built around common ties back home. Lao Chen explained that they provided some formal services for modest fees, such as procuring visas and business licenses, and he often used the association to legitimize his role facilitating connections between Chinese investors and Lao state officials or trade partners. But for the most part, the association simply served as a loose organization of fellow Hunan migrants with a diverse set of business operations in that area of Laos. 

As we ate, the group exchanged lively banter, gave advice and shared complaints about doing business in Laos. One woman there who I had already met earlier that month on the bus from the Chinese border had come with her husband twelve years before and started selling farm equipment until they had enough capital to shift to selling Chinese electronics. She complained about how luohou (backwards) Laos is as she laid SIM cards out on the table for the two men next to her to pick through for a lucky phone number. They had just arrived from Xishuangbanna to sell a truck full of construction supplies, and were asking her about the road conditions on the way to the next district and what to do if stopped by Lao police and asked to pay transport fees. Lao Chen’s younger cousin had also just arrived from Hunan at Lao Chen’s prompting, and while he too referred to Laos as luohou, he fostered a boyish excitement about it. He made a grand performance of recounting the wildlife he’d bought at the town market – bamboo rats and a few lizards, photos of which he showed us proudly on his phone – and eagerly asked others about life in this remote border region. He had found some success in the real estate market back home and was predicting grand profits if he could figure out the path where the Kunming-Vientiane Railway (the flagship Belt and Road project in Laos) would run and procure land in those areas.

The man sitting across from me was particularly boisterous – he had been hired by one of the Chinese construction companies contracted to help with the train construction to facilitate their negotiations with the Lao government to import equipment and supplies. He laughed at some of the company boss’s misconceptions about doing business in Laos – “I told him, everything in Laos is slow! Not like in China, here you cannot do anything fast” – and boasted proudly of the company’s reliance on his Lao state connections. Next to me sat the oldest man there, my guess put him in his early 70s. He sported a worn jacket and matching slacks and introduced himself as the deputy head of the association after Lao Chen. He smiled broadly and explained that, although he had lived in Laos for almost twenty years, he’d never learned to speak Lao. “I have studied how to drink Beer Lao instead! So I know how to do business here just fine!” He clinked our glasses together, finished his beer in one gulp, then placed it back on the table empty with a laugh.

Dissidents in Disguise: politics and profit along the BRI 

Not all Chinese business community gatherings in Laos are so lively and pleasant as the casual lunch orchestrated by Lao Chen. In November 2017, I found myself attending a dinner gala for the 80th anniversary of a Chinese school in Vientiane where some guests found it hard to enjoy themselves. For A Zhen, the atmosphere of the gala went sour as the celebratory performances became increasingly infused with Chinese communist ideology. As singers at the gala began performing My People, My Country, one of the most famous propaganda songs in China, A Zhen decided to go outside to clear his mind.

An established businessman in his 50s, A Zhen stood on the porch of the grand event hall, trying to calm his critical thoughts with the help of a cigarette. “There is too much patriotism in there,” he whispered to me as I snuck out of the gala to join him for a cigarette. Having known each other for a while, he had grown quite candid with me about his general discontent with the politics of the Chinese state. Yet he kept a tight lip around his other Chinese contacts. If revealed, his opinions would be devastating for his current career as broker, which allowed him to extract commissions and kickbacks for fixing deals for newly arrived Chinese investors. Given that some of his top clients are Chinese state-owned enterprises looking to establish projects in hydropower, logging, and mining under the Belt and Road Initiative, the cost of being vocally critical could be huge.

A Zhen represents a particular segment of overseas Chinese who are faced with day-to-day struggle to reconcile their personal politics and economic interests. He is one of many descendants of Chinese migrants who came to Laos throughout the 19th century and the first half of the 20th century, long before China became the People’s Republic of China. Many of this community speak Teochew and Hokkien and originate from two coastal regions of China known historically as the cradle for Chinese traders who set out across Southeast Asia. Individuals like A Zhen were mostly raised in families and communities with strong transnational business traditions. In an era when Chinese capital is flooding into Laos at an unprecedented speed and volume, those who have managed to preserve their Chinese language capacity and cultural affinity have used their entrepreneurial spirit to quickly carve out a new career path as brokers. They possess the cultural and social capital necessary to navigate Laos’s opaque regulatory system and seal big deals, like contracts for hydropower project worth millions of dollars. 

A Zhen just recently managed to land such an investment project for a Chinese state-owned enterprise and took 5% of the total contract value as commission. His ability to comprehend the Lao cultural subtext in important business meetings with state officials greatly facilitated the process throughout. More importantly, he had inside access in government through his half-brother. This allowed him to gauge dynamics within key state bureaus that regulate foreign investment in energy sector. Such nuanced cultural familiarity and deep social connections are rarely found amongst the more recent wave of Chinese migrants in Laos who came in the last two decades. Therefore, while most brokers are preoccupied with providing tedious services like securing visas and renting local offices for investors (services which earn them relatively meager incomes) A Zhen facilitates big deals and, consequently, secures big paychecks.

Still, for descendants of Chinese pioneers who settled in Laos a century ago, a successful career as broker often requires repressing one’s personal political opinions. Due to their unique position in Lao history, and migratory life journeys, this segment of overseas Chinese are generally highly critical of the PRC regime. Many of them suffered a turbulent youth due to the Lao communist takeover in 1975. During decolonization after WWII, Laos sank into a civil war between the American-backed Lao and communist Pathet Lao. Teochew and Hokkien Chinese stood firmly with the Lao Royal Family. The vast majority, including A Zhen’s family, fled Laos in fear of communist persecution when the Lao Royal Family lost the war. They packed up important documents and portable valuable items before running across the border into Thailand. Thus, the word ‘communism’ alone brings back terrible memories of when their community was dispersed, families were separated, property was confiscated, and the place they called home was permanently changed. Implicitly or explicitly, such experiences underpin their negative feelings toward Chinese communism. Moreover, the nomadic lives many of them have lived since fleeing Laos have further exposed them to liberal ideas that are incompatible with PRC ideologies. A Zhen for one, received an education in the United States and spent a considerable period of time living in France, Japan, and Taiwan before returning to Laos in 2012. A pro-democracy poet who writes against Beijing’s authoritarianism in private, he has struggled more than others in his everyday encounters with investors fresh out of China, who are deeply patriotic and enthusiastically draw upon PR China’s state propaganda – especially in promoting their projects within the context of the Belt and Road. 

When our brief smoking session ended, A Zhen returned to the gala with a reserved smile on his face. He rejoined a crowd of people and politely if stiffly clapped at appropriate moments. After all, in the struggle between moneyed interests and liberal political beliefs, the former seems to always win out. There are thus many dissidents in disguises like A Zhen, who diligently work to facilitate the global expansion of Chinese capitalism today.

Viewing the BRI from the Ground Up

Chen Li and A Zhen are just two members of a diverse group of pioneering emigrants and sojourners who came from China to Laos a generation before the new wave migrants now arriving. After years of modestly making a place for themselves in the slow Lao economy, they now scrap together a wealth of local connections and years of experience to facilitate the ambitious plans of incoming Chinese investors mobilized by the Belt and Road Initiative. These pioneers-turned-brokers are pivotal links. It is based on their own past experiences that new investors’ expectations are set, through their family ties and established networks that Chinese capital connects with the Lao state, and on their advice and facilitation that a huge variety of deals across sectors take shape on the ground.

Their brokerage activities, however, are not underpinned by a unifying loyalty towards Beijing, nor do they respond to the state’s directives above their own. Instead, they are driven by a multiplicity of interests, dominated by their own quest for wealth and shaped by localized ties and personal histories. They reflect the complex nature of cross-border relationships and the evolution of the Belt and Road over time. The emergence of pioneers-turned-brokers like Chen Li and A Zhen amidst the rolling out of Belt and Road Initiative serves as a reminder that China’s global integration is  a process which presents complicated contradictions and the need to negotiate personal, practical and historical realities. ∎

This article originally appeared in Panda Paw, Dragon Claw, a new website focused on China’s footprint beyond its border. Pseudonyms are used to protect the identity of the interlocutors. On request of the authors, the authorship of respective segments of the article has also not been stated.
Header: view from a hill in Luang Namtha (courtesy of the authors).