This is one of the more fun match-ups in MK2, am I right? Both fighters are higher tiered, which means Lao can compete with the boss man, Jax.
Jax holds the advantage, but Lao is not without his resources.
LAO
A clever mix up of close-up attacks, mixed in with hats from afar is a pretty good play here. Use the teleport just enough that you surprise Jax. You'll be eating uppercuts if you get predictable. But definitely use it to keep Jax within your sights, or he can just out-turtle you. Dive kick at your own risk! Jax can block and punish it better than almost anyone else in the game. Lao has the edge in CQC, so overall your goal is to be within sweep distance of Jax. Low toes will keep him from ground pounding you. Throwing a few punches and immediately whirlwind spinning also is great at catching Jax. You always want to be pressuring him. Alternatively, another good tactic is to hat spam from far away- when Jax jumps at you, own him in the air with jump punch/dive kick, or whirlwind spin combo him.
JAX
Golden punches are a great asset in this match. Try to keep away from Lao, and anticipate his teleports with an uppercut. If you catch him teleporting too late, you can usually block and get a HK in depending on the lag, and the level Lao you're facing. If you're going to jump, jump punch is your best pick. Jax's sweep is much longer than Lao, so don't be afraid to throw some in when Lao tracks you down. It's usually pretty hard to get a ground pound in vs a great Lao, because he floats like a butterfly and stings like a bee. But still use them, combined with wave punches, to get Lao jumpy. Some Lao players like to turtle, and this bring them to you, where you can block and counter. Backbreaker is good, but always a risk to be in the air vs Lao. Best time for it is after you see you've scored a jump kick (which shouldn't be often, coz you shouldn't be jumping much!). What really wins this match for Jax is blocking dive kicks, and jump kick/backbreaking. Most Laos can't help themselves, they must dive kick you, so be ready to block them.
Lao has the moves to track Jax down. Problem is a great Jax can usually deal with them just fine.
7-3 for Jax. Though the really great Lao players could probably make it much closer... not sure.