China promises Laos more in move to expand influence

China promises Laos more in move to expand influence

VIENTIANE (AFP): Chinese President Jiang Zemin promised Laos
more economic assistance on 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
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 spiraling 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 China here has not yet
succeeded in supplanting Vietnam's longstanding position as
Laos's main political and security ally, diplomats say.

Laos remains bound to Vietnam by a 25-year Treaty of
Friendship and Cooperation which it signed in 1977 and diplomats
say that it is still Hanoi that the communist authorities here
turn to in times of dire need.

When rebels from the Hmong minority launched a major dry-
season offensive in the northern mountains earlier this year,
leaving the Lao army reeling, Vientiane secured the intervention
of Vietnamese combat troops for the first time since the 1980s,
they said.

Beijing's new diplomatic push here has not gone unnoticed by
Hanoi -- Jiang arrived hot on the heels of Vietnamese Foreign
Minister Nguen Dy Nien who flew in for a gathering of Asian
ministers Thursday.

Nien joined Indian Foreign Minister Jaswant Singh and
ministers from Cambodia, Myanmar and Thailand in launching a new
Ganges-Mekong Cooperation grouping Friday which analysts saw as
an effort to further engage New Delhi in the region as a
counterbalance to Beijing.

Zhu insisted China had no objection to Laos developing its
relations with any other country.
"China is ... glad to see that Laos is increasing its contacts
and exchanges with other countries," he said.

Lao leaders had even told Jiang that his visit had "helped
Laos to develop its contacts with other parts of the world."

Zhu expressed outrage at the suggestion by some analysts that
mounting divisions within the Lao regime between pro-Beijing and
pro-Hanoi factions were responsible for a mystery seven-month-old
bombing campaign which has wounded more than 40 people.

"I don't think that such finger-pointing at China is
suitable," he said. "If observers want to think that way, I have
no comment on it."

Security remained tight for Jiang's visit after the latest
bombing wounded five people at the airport Thursday, according to
an official toll.

Armed police blocked off the main avenue along the back of the
presidential palace as well as streets around the city center
hotel where other members of the Chinese delegation were staying,
an AFP correspondent saw.

But Zhu insisted that controlling unrest remained one of the
big achievements of the communist authorities here. "Laos has
successfully maintained social stability," the Chinese foreign
ministry spokesman said.