The "Chinese City" is a hot topic of talk and wild rumor, much of it laced with anxiety as well as anger that the regime sealed such a momentous deal in virtual secrecy.
The rumblings are being heard even among some government officials, and foreign organizations operating in Laos are being told to refer to the venture as a "New City Development Project" rather than a "Chinese city."
Deputy Prime Minister Somsavat Lengsavad insists the deal poses no threat.
"This is not unusual. Almost every country in the world has a Chinatown, so why shouldn't Laos have one?" he told Laotian reporters.
According to an artist's impression in state-run media, it will have a Manhattan-like skyline. There is no word on how many Chinese will live there. The figure of 50,000 families is widely speculated but Somsavat denied any such number had been agreed upon.
The idea of 50,000 newcomers to a city of 460,000 is one factor causing unease. Another is location: The complex is to go up on the That Luang marsh, an area pregnant with nationalist symbolism and also ecologically important.
It comes at a time when China is rapidly becoming the No. 1 foreign economic and political power in Laos. As migrants, money and influence roll across the frontier, northern areas of the country are beginning to look like a Chinese province.
According to Somsavat, a Chinese company last fall was granted a renewable, 50-year lease to transform 4,000 acres of "rice fields into a modern city," thus stimulating the business and investment climate of one of the world's poorest nations.
Somsavat, an ethnic Chinese-Laotian with close ties to Beijing, explained that when Laos fell short of funds to build a stadium for the Southeast Asian Games it will host next year, it turned to the China Development Bank. The bank offered a Chinese company, Suzhou Industrial Park Overseas Investment Co., a loan to build the stadium in exchange for the lease.
The deal was signed last September, according to official media, with no known prior notice to the public. The company, contacted in Suzhou, declined to answer questions.
At a news conference, Vientiane Mayor Sinlavong Khoutphaythoune said three Chinese companies were involved in the project.
Even some aging revolutionaries are critical, saying they fought to keep out the United States and others during the Vietnam War and now are seeing their own government opening the floodgates to foreigners.
"The Lao people are not strong so they are afraid the Chinese will come in and expand their numbers and turn our country into China. We will lose our own culture," said Sithong Khamvong, a middle-class Vientiane resident and former Communist Party member.
There has been no official word on the conditions under which the Chinese might be allowed to settle in the new suburb. By unofficial estimate, some 300,000 Chinese live in Laos but true figures are impossible to obtain since many have acquired false documentation much as they have done in another of China's Southeast Asian neighbors, Myanmar. The north of that country is taking on a Chinese character.
Also irking many is the site of the planned city - near both the Parliament and the golden-spired, 16th century That Luang monastery, the most important symbol of national sovereignty and a sacred Buddhist site.
The area is now a mix of marshes, rice fields and creeping urbanization despite substantial international aid to preserve it as a wetland.
A 2003 study by the Switzerland-based World Wide Fund for Nature said the marsh is the main runoff for flash floods, a "sewage tank" for a city with no central waste water system, and a source of edible fish and plants for the poor.
"My major concern is that the new city will have an impact on these three factors," says the study's author, Pauline Gerrard.
The mayor counters that the marsh is already polluted and that proper development will improve the environment. Some reports say the area is designed to attract upmarket buyers and will be modeled on the Chinese city of Suzhou, famed for its canals and greenery.
But longtime foreigners in Vientiane can't recall the middle class ever being so angry.
"Lao journalists would like to write about this but they cannot. There is no protest except in coffee shops - in our 'coffee parliaments,"' Sithong said.
Martin Stuart-Fox, an Australian author of books on Laos, says the old generation knew how to balance China's influence and Vietnam's and avoid being crushed between its powerful neighbors.
But this generation has passed, he said in an interview from Australia, and now "it seems to me that the balance is being lost."