News Forum - Nong Khai bridge the final step in China-Laos-Thailand Railway

[Vince]

29 minutes ago, Bluesofa said:

While you'd think that is logical, I can't see the agreement terms allowing foreign (Japanese) intervention from a Chinese point of view.
Also, allowing for those corrupt in the Thai government to accept a backhander in order to agree unfavourable terms.

As someone once said, "Never underestimate the stupidity of your customers."
Absolutely nothing to do with this subject of course. [end of sarcasm]

I think the Thai government is struggling with a lot of issues, and every government is struggling with an unexpected pandemic.

Corruption is in every country. A massive corruption scandal is still unfolding where I live (not in Thailand) and there's probably some close to you (wherever you are). I would be surprised to find a country which didn't have corruption. 

In my own life I've seen what I would call bid rigging, massive self-dealing, nepotism, cronyism (which benefited me!) , sweetheart deals, and improper gifts. All of it in a supposed "developed nation".  

And a debt deal equal to half the GDP of Thailand, as the Laos-China deal is said to be the size of half the GDP of Laos, is likely to be scrutinized by quite a few people. 

Edited January 17, 2022 by Vince
Spelling :-(

[Changnam43]

I think they should route the railway to a land fill site.  That way the whole process can be streamlined.

Toss the Chinese products straight in there.

[Bluesofa]

3 minutes ago, KaptainRob said:

China's high speed rail network is losing money hand over fist and I would hope Thailand finances it's own part of the project.  However, even if funding comes from Cn, Thailand has more than ample resources to fund repayments unlike many smaller under developed nations.

With the Mekong river under threat of becoming impassable due to Chinese dams as well as climate change, the railway could replace river transport of goods from China, clothing, fresh produce etc.  Most heavier and non perishables would still come by sea.

The biggest danger, IMO, is the ease with which Chinese can access Thailand from regional areas, cheap Charlie tourists and labourers, and create demand for Chinese funded housing and industry.

You say it's losing money hand over fist. I think right now that must be true.

However, the Chinese are definitely not stupid, they are good at business and always plan long-term.
I had no idea of the amount of fresh food coming from China.

We've both had a discussion before on the quality of Chinese tools. What they are good at is soaking the market with cheap (rubbish) products. Trying to find non-Chinese tools/parts now is increasingly more and more difficult as they dominate more of it.

Your point about exporting their own citizens as tourists and investors is worrying. I see that as part of their long-term plan too.

[KaptainRob]

Yes, Mr Sofa, the high speed rail network is in major financial strife.  Income doesn't even pay off the % on borrowings as pax numbers are only half of break even point.

 

[Vince]

7 minutes ago, Bluesofa said:

You say it's losing money hand over fist. I think right now that must be true.

However, the Chinese are definitely not stupid, they are good at business and always plan long-term..

Check out this analysis of Chinese rail financing.

I'm not saying it's not a long term plan, but the plan may not be what it seems to be (i.e. it may be more about debt financing sexy projects than practical rail projects). 

[Bluesofa]

17 minutes ago, KaptainRob said:

Yes, Mr Sofa, the high speed rail network is in major financial strife.  Income doesn't even pay off the % on borrowings as pax numbers are only half of break even point.

Which part are you referring to - in Laos, China, or the entire Chinese high speed railway nationally?
I'm assuming you might mean Laos, when writing 'borrowings'?

[KaptainRob]

15 minutes ago, Bluesofa said:

Which part are you referring to - in Laos, China, or the entire Chinese high speed railway nationally?
I'm assuming you might mean Laos, when writing 'borrowings'?

The entire Cn network, as per Vince's YT video - well worth watching the entire episode.

[Vince]

Just now, KaptainRob said:

The entire Cn network, as per Vince's YT video - well worth watching the entire episode.

In case you missed it :-) 

 

https://m.youtube.com/watch?v=ITvXlax4ZXk

[Bluesofa]

37 minutes ago, Vince said:

Check out this analysis of Chinese rail financing.

I'm not saying it's not a long term plan, but the plan may not be what it seems to be (i.e. it may be more about debt financing sexy projects than practical rail projects). 

Thanks for posting the video. Very interesting and quite an eye-opener on the Chinese rail financial problems.
As the video says, the railway will be there for decades ahead. It will allow the opportunity to benefit by transporting goods and hopefully passengers (assuming it's maintained).

As an aside, I had trouble concentrating as the guy narrating it has such an irritating voice! The last word in every sentence goes upwards in tone, very distracting.

[KaptainRob]

This one is also excellent > 

 

[Bluesofa]

14 minutes ago, Vince said:

In case you missed it :-) 

https://m.youtube.com/watch?v=ITvXlax4ZXk

Thanks! I've seen it now. The video was posted while I was busy penning my earlier reply.

[Vince]

1 minute ago, Bluesofa said:

Thanks for posting the video. Very interesting and quite an eye-opener on the Chinese rail financial problems.
As the video says, the railway will be there for decades ahead. It will allow the opportunity to benefit by transporting goods and hopefully passengers (assuming it's maintained).

As an aside, I had trouble concentrating as the guy narrating it has such an irritating voice! The last word in every sentence goes upwards in tone, very distracting.

I think there was a point about the railways NOT being around if they're financial losers. Valuable routes going to places people are and want to go is one thing (Bangkok to Singapore? Bangkok to Beijing? Bangkok to Hanoi?}. But rail lines on less profitable routes just lose money and get abandoned. 

High speed rail is pricier than regular rail, which for a route like some in the video would have made more sense (regular rail can do freight and passenger cargo). 

A bullet train doesn't make sense to take you into farmland with cows. :-) 

[Vince]

13 minutes ago, KaptainRob said:

This one is also excellent > 

07:14 sums it up. Ridership density per kilometer has to exceed a certain amount to be profitable. 

So only routes between dense population clusters will break even or turn a profit. 

Routes that run into low density rural areas will not break even. 

How many years will Laos sink money into operating a costly rail system that may not break even and at the same time service debt on loans for it? 

 

[Bluesofa]

3 minutes ago, Vince said:

07:14 sums it up. Ridership density per kilometer has to exceed a certain amount to be profitable. 

So only routes between dense population clusters will break even or turn a profit. 

Routes that run into low density rural areas will not break even. 

How many years will Laos sink money into operating a costly rail system that may not break even and at the same time service debt on loans for it? 

Good point.
As Laos is (basically) under control of China, it will do what the Chinese tell it.

[Vince]

Just now, Bluesofa said:

Good point.
As Laos is (basically) under control of China, it will do what the Chinese tell it.

Well, that may be so. And the expropriation of satellite nations capital through massive money losing ventures may be a way to transfer wealth back to the motherland. 

Darn, that sounds like "colonialism" to me? Or it it "imperialism"? I can't remember. 

[Bluesofa]

1 minute ago, Vince said:

Well, that may be so. And the expropriation of satellite nations capital through massive money losing ventures may be a way to transfer wealth back to the motherland. 

Darn, that sounds like "colonialism" to me? Or it it "imperialism"? I can't remember. 

I'd have thought 'colonialism by stealth'. 

[nobusinessofurs]

2 hours ago, Bluesofa said:

Are you suggesting it could have similar terms to the Chinese infrastructure projects built in some African and Indian countries?
When those countries fail to keep up repayments for the massive loan it allows the Chinese to take over ports and airports in some of these countries.
Again, if someone has more specific details please post them.

Just googling provided these links:
https://www.hellenicshippingnews.com/china-to-take-over-kenyas-main-port-over-unpaid-huge-chinese-loan/  
https://www.france24.com/en/live-news/20210930-india-counters-china-in-sri-lanka-with-700-million-port-deal 
https://www.kaieteurnewsonline.com/2021/11/28/china-takes-over-ugandas-only-intl-airport-for-failing-to-repay-us207m-loan/ 
https://qz.com/1223768/china-debt-trap-these-eight-countries-are-in-danger-of-debt-overloads-from-chinas-belt-and-road-plans/ 

Exactly, it's all about what's beneficial to China. 

[Bluesofa]

6 minutes ago, nobusinessofurs said:

Exactly, it's all about what's beneficial to China. 

It is, yes.
The Chinese ensured they had their arse covered in case of default. Not just a good commercial decision, but also allowing more control of important access points in these countries.

[Vince]

21 minutes ago, Bluesofa said:

It is, yes.
The Chinese ensured they had their arse covered in case of default. Not just a good commercial decision, but also allowing more control of important access points in these countries.

Which means that maybe in some cases the "default" was more valuable than the deal itself.

Analogous to an impossible to service bank loan so the bank can seize the house...

[nobusinessofurs]

1 minute ago, Vince said:

Which means that maybe in some cases the "default" was more valuable than the deal itself.

Analogous to an impossible to service bank loan so the bank can seize the house...

If it's so beneficial for China then, me thinks they should foot the entire bill

[Vince]

3 minutes ago, nobusinessofurs said:

If it's so beneficial for China then, me thinks they should foot the entire bill

Oddly enough, the Communist Chinese haven't got a reputation for loan forgiveness. :-D 

 

[Poolie]

2 hours ago, Changnam43 said:

I think they should route the railway to a land fill site.  That way the whole process can be streamlined.

Toss the Chinese products straight in there.

Along with your phone, computer, possibly your car........

[Poolie]

3 minutes ago, Vince said:

Oddly enough, the Communist Chinese haven't got a reputation for loan forgiveness. :-D 

Somebody has been feeding too heavily on the western media.

https://www.lowyinstitute.org/the-interpreter/debunking-myth-china-s-debt-trap-diplomacy

 

[nobusinessofurs]

3 minutes ago, Poolie said:

Somebody has been feeding too heavily on the western media.

https://www.lowyinstitute.org/the-interpreter/debunking-myth-china-s-debt-trap-diplomacy

The proof is in the pudding.

[Vince]

3 minutes ago, Poolie said:

Somebody has been feeding too heavily on the western media.

https://www.lowyinstitute.org/the-interpreter/debunking-myth-china-s-debt-trap-diplomacy

Having read only the first few paragraphs it's a great piece of Chinese 'apologetics' - the Chinese did nothing wrong in lending to a bad borrower (???) And it was all his idea (!) and he messed it up, and China didn't get a swap (!) He still has to pay back the debt!

Even worse! 

Was this written by China, comrade? :-)