This chapter documents the impact of Chinese capitalism on the Mekong region's agricultural sector in Laos based on a survey of the Chinese-owned banana plantations near the Laotian border town of Houy Xai. It will demonstrate how the high demand for bananas in China and unregulated rent capitalism have made it possible for small and medium Chinese banana plantations operating in the Thai- Lao border areas to compete successfully with larger companies. However, the small-scale and short-term land acquisitions and the practice of shifting plantation by the Chinese companies have resulted in large-scale, long-term environmental and health impacts on local lives and livelihoods.

The “Shifting Plantation” System

In her study of the banana industry in the Caribbean, Barbara Welch divides the global banana trade into four independent subsystems, in the North Atlantic, the Western Pacific, Southern Africa and Southeastern South America. In terms of production, however, there are three identifiable forms: the large plantation system, the family farm, and the small shifting plantation system.

The banana is highly perishable, with a short period of time between its edible maturation and time of spoilage. While most major markets lie in the temperate zones, cultivation is confined to tropical areas. The banana industry — in terms of production, logistics and marketing — requires high levels of efficient business organization. The geography of the banana industry contributed to the emergence of the large plantation system in Latin America or what James Wiley calls the “Banana Empire”. This type of organization began with the founding of the United Fruit Company in 1899. Since then, the banana industry in Latin America has been controlled by trans-national companies such as United Fruit, Del Monte, Dole, and Chiquita, among others. From the beginning, land acquisition was one of the paramount goals of these companies. The empire-building task of setting up plantations required huge investments in forest clearing, irrigation techniques, labour management and logistics. During the industry's incipient stage, the capital required to accomplish these herculean tasks was only available in the North. Consequently, control over the banana industry — land, railroad and shipping — resided in the consuming regions rather than the producing regions.