18 January 2020

POLICY WATCH: High-speed rail a ticket to better Sino-Thai ties?

He promoted it in the Thai Parliament. He promoted it in meetings with Thailand’s prime minister. He promoted it at an exhibition in Bangkok. In his trip to the Southeast Asian nation earlier this month, Premier Li Keqiang {李克強} did not miss an opportunity to espouse the virtues of China’s high-speed-rail network.

Li put his full political heft behind China’s bid, going so far as to take his pitch for China’s high-speed-rail system to Thai legislators. He tried to win them over by arguing that closer two-way cooperation on railways will improve Thailand’s infrastructure and boost its economic and social development. “China has attained advanced technology for building safe and reliable high-speed railways at competitive costs,” Li said.

China’s interest in selling its system to Thailand was piqued last month after the Thai Parliament authorized 2.2 trillion baht (US$70 billion) in loans for large transport projects in the country, including four high-speed-rail lines that would connect Bangkok to other key cities and dual-track rail lines that could reduce the country’s dependence on road transport.

The technology is being touted as part of China’s so-called infrastructure diplomacy in which China seeks to expand its political influence by offering other countries homegrown technology or facilities. If Thailand takes up the technology, not only will China get a bigger return on its huge investment in high-speed rail, it could be the start of a linked regional transport network based on Chinese standards.

To drive home the importance of the technology, high-speed-train technology was part of the China-Thailand wide-ranging memorandums of understanding on cooperation signed during Li’s visit. Other areas covered by the agreement include energy and culture.

Thailand Prime Minister Yingluck Shinawatra said her country is willing to work with China at the government level on the projects. For its part, Beijing says the relationship between China and Thailand has aided its ties with the Association of Southeast Asian Nations.

The high-speed-rail project is part of the China-Thailand strategic cooperation deal reached during Li’s visit. Both nations have agreed to aim to increase bilateral trade to US$100 billion by 2015, up from their US$70 billion target this year.

In addition, to increase the international exposure of the renminbi (RMB), Li urged businesses from both countries to settle bilateral trade in the Chinese currency, and both countries to explore expanding the bilateral currency swap, saying that China will consider approving RMB clearing banks in Thailand.

There is a precedent for this kind of infrastructure diplomacy in expanding China’s role in Southeast Asia. In 2011, China started construction of a rail line linking southern Yunnan province with Laos, a project in which China is paying 70 percent of the construction cost, with Laos responsible for the remainder.

Political observers say China has big ambitions in Southeast Asia and is hoping to link the rail network with Beijing and Singapore. Plans are also under way to lay track to connect China to Cambodia and Thailand.

Those ambitions could deliver major benefits for Kunming, the capital of Yunnan. With a population of 3 million, Kunming is a natural gateway to the region and its role could grow if better and faster transport links open up the region to more international business.

– Contact the reporter at [email protected]


EJ Insight writer