Relations with China have traditionally consisted of trade and aid, largely in road construction in the northern provinces of Laos, without directly challenging the interests of Thailand or Vietnam in the central and southern regions. However, Vietnam's invasion of Cambodia in December 1978 to unseat then prime minister Pol Pot, provoked China into a limited invasion of Vietnam-- approximately nineteen kilometers deep--to "teach Vietnam a lesson." Laos was caught in a dangerous bind, not wanting to further provoke China, but not able to oppose its special partner, Vietnam. The Laotian leadership survived the dilemma by making slightly delayed pronouncements in support of Vietnam after some intraparty debate and by sharply reducing diplomatic relations with China to the chargé d'affaires level--without a full break. The low point in Sino-Laotian relations came in 1979, with reports of Chinese assistance and training of Hmong resistance forces under General Vang Pao in China's Yunnan Province (see Internal Threats and Resistance Movements , ch. 5).

This hostile relationship gradually softened, however, and in 1989 Prime Minister Kaysone paid a state visit to Beijing. In 1991 Kaysone chose to spend his vacation in China rather than make his customary visit to the Soviet Union. Diplomatic and party-to-party relations were normalized in 1989. Trade expanded from the local sale of consumer goods to the granting of eleven investment licenses in 1991--including an automotive assembly plant. Following the establishment of the Laotian-Chinese Joint Border Committee in 1991, meetings held during 1992 resulted in an agreement delineating their common border. China's commercial investments and trade with Laos have expanded quietly, but not dramatically, in 1993 and 1994.

Unlike its other neighbors, China has not historically dominated the Laotians. In the final analysis, China represents the most powerful remaining communist state to which Laos might turn for support against Thai or Vietnamese hegemony.

Data as of July 1994