US-China contest in Southeast Asia is good news for Laos

Earlier this month, Lao Foreign Minister Thongloun Sisoulith traveled to Washington to meet United States Secretary of State Hillary Clinton. His visit marked the highest-level contact between the two governments since the end of the Vietnam War in the mid-1970s.

The meeting followed a significant warming of diplomatic ties under the Obama administration that gained traction in June last year, when Laos and Cambodia were removed from a blacklist that limited Washington's financial support for U.S. companies doing business with these nations. In this latest development, Mr Thongloun and Mrs Clinton signed an 'open skies' agreement which officials said would boost the isolated Indo-Chinese state's tourism industry.

U.S. interest in Laos is not new. But it does appear to be growing. Washington's primary motive appears to be the need to check the growing influence of Beijing.

China has a strong economic and diplomatic presence in Laos, as well as much of the rest of Indochina. Chinese Vice-President Xi Jinping was in Vientiane as recently as last month, pledging millions of dollars of investment in infrastructure. But he was not the first senior Chinese leader to arrive. Chinese Premier Wen Jiabao visited Laos in March 2008 to attend the third summit of the Beijing-sponsored Greater Mekong Subregion. Established in 1992, this organization promotes economic and social development, irrigation and cooperation among the six Mekong countries.

For some years now, Beijing has provided Laos with grants, low interest loans and other technical assistance. Imported Chinese-made goods are also widely available on local markets.

Washington established trade ties with Laos in 2004 and for some years now has been helping to clear unexploded ordnance. But relations have remained tense, with U.S. officials expressing concern about Vientiane's treatment of its ethnic Hmong minority. Many Hmong fighters assisted U.S. forces during the Vietnam War.

More recently, however, the U.S. has signaled that it is willing to set aside such concerns. In March, Deputy U.S. Secretary of State for East Asia Kurt Campbell visited Laos, promising 'a high-profile relationship' with the country. Washington's move comes not long after it initiated a dialogue with Myanmar, another country courted by China whose military government has angered human rights campaigners. Stepped-up U.S. aid programs in Laos now include finding alternative employment for opium poppy growers, as well as improving health care and environmental protection, particularly relating to the Mekong River.

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