China and Laos collaborated on the development project of the “Mohanh – Moding” Economic Zone, a major project personally promoted by the Chinese Communist Party leader Xi Jinping. However, in recent times, over a dozen Chinese-funded enterprises within the jurisdiction of Laos are facing closure due to their inability to obtain legal operating qualifications. These investors were initially promised and promoted by the Chinese Communist officials, but now the Laotian government is pressuring their rights, while the Chinese government agencies are shifting responsibility, leading to significant losses for the investors.
The “Mohanh – Moding” Economic Cooperation Zone is located at the border between Yunnan, China, and Southern Laos, and was established by the State Council of the Chinese Communist Party in March 2016. As an important node of the Chinese “Belt and Road” initiative, this cooperation zone is a major project personally promoted by Chinese Communist Party leader Xi Jinping, positioned as an open gateway to the mainland of Southeast Asia.
The Moding Economic Zone is located in the northern part of Laos’ Langnangta province, which is also under one-party rule, adjacent to the Mohanh Port in Yunnan, China (Mohanh Economic Development Zone). Since its development by the Yunnan Haicheng Industry Group in 2012, it has implemented a “domestic tax exemption” policy.
During the 2022 Shanghai Import Expo, the Moding Economic Zone, through joint investment promotion by the Yunnan Provincial Department of Commerce, promised to autonomously approve projects such as schools and hospitals, and set up a “one-stop service center” to assist businesses in handling procedures. The commitment, especially concerning the establishment of assisted reproductive services, particularly in the field of test-tube babies, attracted many investors including the founder of Taishen Hospital, Dong Shouwei.
However, in October 2024, the Laotian Ministry of Public Security conducted a sudden inspection of the Moding Economic Zone and found that multiple institutions, including Taishen Hospital, held business registration and tax registration certificates but had not obtained the auxiliary reproductive medical permit issued by the Laotian Ministry of Health, thus operating illegally.
According to Laotian laws and regulations, the provision of assisted reproductive services requires approval from the Ministry of Health, with only one public hospital currently approved, and private hospitals lacking this qualification.
One Chinese investor, Yang Liwei, revealed in an interview with Dajiyuan the many risks and difficulties he faced investing in the assisted reproductive hospital in the Sino-Lao “Mohanh – Moding” Economic Cooperation Zone.
Yang Liwei was initially attracted because the project was promoted as a national-level cooperation project between China and Laos, and had records from departments like the Yunnan Provincial Department of Commerce, which dispelled his initial doubts.
However, as the project progressed, he found that the management of the project, Yunnan Haicheng Group, was dubbed as the “government white glove” locally, and the Moding area also had a bad reputation due to negative rumors like gambling. Despite the project being approved by Chinese government departments, problems frequently arose in practical operations.
Especially in a marketing meeting in November 2020, the project promised to issue only five assisted reproductive licenses in the area, which was highly attractive at the time of scarce licenses domestically. Yang Liwei believed that once the “physical fence” of the cooperation zone was completed, entry with identification cards would be allowed, which was equivalent to obtaining the value of a domestic assisted reproductive license.
However, the actual situation turned out to be much more complicated than expected. Yang Liwei signed a lease contract in 2023 and officially opened for business in 2024. But in just October of the same year, the Laotian Ministry of Public Security conducted a surprise inspection, discovering issues with licenses of several hospitals, some of which had even been sealed before.
He questioned why 13 enterprises faced similar issues, which were not isolated cases but resulted from systemic design or poor coordination between governments.
In the interview, Yang Liwei detailed the difficulties he encountered during the investigation: on one hand, the investment information released by the Chinese side was the main basis, while information from Laos was opaque; on the other hand, the Sino-Lao joint management committee was in name only, lacking substantial participation from the Laotian side.
Despite his multiple communications and negotiations with various parties such as the Chinese Embassy, the Yunnan Provincial Department of Commerce, Shanghai Foreign Affairs Office, the progress with official promises was minimal, and he was even advised to resolve the matter through legal means, which Yang Liwei deemed almost unfeasible.
At the same time, Mo Ding Taishen International Hospital in Laos (referred to as “Taishen Hospital”) faced imminent closure due to a notice to vacate, with founder Dong Shouwei’s investment of over 20 million yuan facing the risk of complete loss.
The Moding Economic Development Group Limited sent a letter stating that Taishen Hospital owed a total of 150,500 yuan in rent, water and electricity bills, and property fees from March 1, 2025, requesting it to vacate the premises by August 13.
Dong Shouwei recently told Caixin, “We did not deliberately withhold rent, but the Mo Ding special zone recruited investors with false preferential policies, leading to the inability to operate due to the lack of a hospital permit. We hope the special zone can provide a solution.”
In addition to Dong Shouwei, more than ten other Chinese-funded medical institutions in the Moding Economic Zone are also facing closure or operating underground due to permit issues.
According to Caixin, including Taishen Hospital, there are over a dozen Chinese-funded medical institutions in the Moding Economic Zone facing closure or only able to operate “underground” due to not obtaining the required medical permits issued by the Laotian Ministry of Health, bringing significant operational pressure and potential losses to investors.
A deep analysis of this incident reveals underlying systemic issues.
Investor Chen Zhicheng pointed out in an interview with Dajiyuan on September 16 that since the first batch of enterprises entered from 2019 until now, relevant departments of both countries’ governments were aware of the nature and potential issues of the project, but failed to effectively regulate, even creating policy pitfalls that put Chinese investors at risk.
Chen Zhicheng revealed that the Laotian side of the project was managed by the Yunnan Haicheng Group, which was reportedly referred to as the government’s “white glove” by insiders. It was claimed that Haicheng Group took over the project without a public bidding process, and their previous business in Laos had involved negative news. Despite this, Haicheng Group stated that it had completed foreign investment filings with the Yunnan Provincial Department of Commerce, the Development and Reform Commission, and the Foreign Exchange Bureau in China, insinuating that the project had official clear knowledge and support.
The economic cooperation zone was promoted as a “national-level project,” claiming that identification cards could freely enter and exit, and promising the issuance of scarce assisted reproductive licenses, attracting many Chinese investors including Chen Zhicheng.
However, after receiving promotional brochures and being allocated a “reproductive license” quota, he discovered that the actual situation did not match the promotion. The initially promised five licenses eventually increased to over a dozen, and the process of issuing licenses had many doubts.
In 2022, during an investment promotion meeting in Shanghai hosted by Yunnan Province, Chen Zhicheng was invited as a VIP and learned that his hospital was listed in official promotional brochures as a “success case.” He communicated with the then Director of the Yunnan Provincial Department of Commerce, Li Chengda, to confirm the planning of the “physical fence” and industry linkage layout in the cooperation zone.
Based on this, Chen Zhicheng signed a lease agreement for premises in 2023 and held an opening ceremony the following year, with his hospital featuring in official promotions.
However, in October of last year, the Laotian Ministry of Public Security conducted a sudden inspection of the cooperation zone, finding that licenses of several enterprises, including Chen Zhicheng’s hospital, were in violation, resulting in the sealing of two hospitals.
Even more shocking is that Laotian law prohibits private hospitals from engaging in assisted reproductive services, allowing only public hospitals, yet the permit Chen Zhicheng obtained from the Langnangta Economic Zone Management Committee and the National Planning and Investment Department of Laos included this scope of service, conflicting with the Laotian Ministry of Health regulations. He believes this is due to negligence in Laotian government oversight and lax scrutiny in Chinese investment promotion.
Chen Zhicheng pointed out that the Chinese side did not acknowledge mistakes during the coordination process and proposed a “replica” license plan, which he refused. He believes that since the first batch of enterprises entered in 2019, both governments were aware of the project’s issues but failed to supervise properly, leading to a “policy trap” that has put Chinese investors at risk.
Currently, Chen Zhicheng has reported the situation to the Chinese Ministry of Foreign Affairs, with the Shanghai Foreign Affairs Office intervening in coordination, but the solution remains unclear. He emphasized that this matter is not just a business issue but a consequence of systemic design flaws and regulatory vacuum, hoping that media exposure will raise awareness and sound the alarm for other investors.
Dong Shouwei mentioned the background of the cooperation zone, saying that the Moding region initially had a weak economic foundation, mainly relying on grey industries like gambling and adult entertainment. With these industries declining or facing restrictions and the real estate market downturn, the development of the cooperation zone faces significant challenges.
He said that in the medical industry aspect, the project tried to emulate the policy advantages of Hainan, attracting specific industries, but due to the lack of actual regulation and clear policy guidance, it led to the current predicament.
Currently, the Moding Special Zone Development Group stated that their legal team is handling relevant contract disputes, and they will announce progress when the time is ripe. However, for the investors already deeply embroiled in trouble, seeking effective solutions remains a distant and arduous path.