China's strategy could be a disaster for Laos and there's accusations their move has been deliberate but China has hit back.

For more than a decade, international analysts have warned that China's global infrastructure diplomacy could be a disaster for poorer nations like Laos. Some even suggested the strategy was deliberate – a means to secure strategic international assets.

Others, however, have labelled such criticism as "sour grapes" as the economic influence of the United States wanes.

"It is simply another typical case reviewing the sour-grapes mentality of the US-led Western world, unwilling to see any beneficial co-operation between China and others, and they know clearly that they have lost advantages in pursuing such kinds of collaboration," states the Communist Party.

Beijing's cash splash has proven extremely popular, with big-ticket items such as shopping centers in Vientiane, bridges, highways, railways high on the priority list of its Belt and Road initiative.

Now the global pandemic, as well as soaring energy costs and global food shortages brought about by the Ukraine war, have proven how vulnerable Laos really is.

Inflation is running at 23 per cent. Its currency – the kip – has shed a third of its value in just 12 months. And there's insufficient cash to pay for critical imports, such as fuel.

What cash it has is going towards annual $US1.4 billion repayments on a $US14 billion debt. That represents almost 90 per cent of its national gross domestic product.

Half is owed to the People’s Republic of China (PRC). And most of that has been sunk into a commercially questionable China-Laos mega railway project.

But there's also speculation that a series of undisclosed loans bloats Laos' total debt exposure to China out to $US12.2 billion.

Now global credit rating agency Moodys has given Laos a "junk status" warning, stating it has "a very high debt burden and insufficient coverage of external debt maturities by foreign exchange reserves."