30-10-2023 (BANGKOK) Thailand’s Prime Minister, Srettha Thavisin, has been actively working to enhance relations with China since assuming office in August. One of his early significant meetings was with the Chinese ambassador, laying the groundwork for future diplomatic engagements aimed at bringing the two nations closer together.
A notable gesture in strengthening ties was the implementation of visa-free entry for Chinese visitors to Thailand in September. Personally welcoming the first batch of Chinese tourists, Mr Srettha emphasized their importance to Thailand’s tourism-dependent economy.
In a recent official visit to China, Mr Srettha attended the third Belt and Road Forum for International Cooperation. This visit, his first outside the Association of Southeast Asian Nations (ASEAN), underscores the significance the new Pheu Thai government places on Thailand-China relations. During the visit, Mr Srettha also extended an invitation to Chinese President Xi Jinping to visit Thailand.
According to local media reports, Mr Srettha stated, “(Mr Xi) gave me his mobile number for direct calls. This is a good sign. Both countries must depend on each other. We must depend on China which is a big brother.”
China, on its part, pledged to strengthen the “family-like relations,” as stated by President Xi. The economic cooperation between China and Thailand has a long history, with diplomatic relations dating back to July 1975.
During Mr Srettha’s recent visit to China, the two countries signed several bilateral agreements covering various sectors, including infrastructure, trade, and cultural exchanges. A key focus of the visit was on green initiatives and high-speed rail projects.
Thailand’s commitment to environmental conservation is evident, and the nation seeks Chinese investments to materialize its goals. China’s expertise in high-speed rail development positions it as a valuable partner for Thailand’s ambitious rail projects.
The advantages of this close relationship with China are evident. Chinese investments in Thailand’s green initiatives can expedite the country’s transition to a more sustainable and eco-friendly economy, reducing carbon emissions and preserving its natural beauty and resources.
Moreover, support for high-speed rail projects is crucial for enhancing Thailand’s infrastructure, connectivity, and transportation network. Efficient rail systems can spur economic development, improve logistics, and boost both domestic and international trade.
However, while China and Thailand may appear as diplomatic siblings, such relationships can be complex. Mr Srettha has emphasized the need for a significant boost to Thailand’s economy in order to drive growth, reduce household debt, and improve livelihoods. Thailand’s economy grew by a mere 1.8% in the second quarter, and household debt has reached 90.6% of the gross domestic product.
China’s own economy faces challenges, including a property crisis, high youth unemployment, and tensions with the United States over trade. China’s economic slowdown could hinder its ability to invest as anticipated. Given that China is one of Thailand’s major trade and investment partners, any slowdown in the Chinese economy could adversely affect Thailand, leading to reduced exports and potential repercussions for the livelihoods of the Thai people.
Additionally, Thailand’s growing alignment with China may raise concerns for the United States, a key ally and trading partner. The US aims to maintain its influence in the region, and Thailand’s strengthening ties with China could be viewed with suspicion. Managing this delicate balance becomes particularly challenging amid the strategic competition between the US and China.
For Mr Srettha, the success of his diplomacy with China carries significant weight for his political future. As a political novice who assumed office through an unlikely alliance between Pheu Thai and pro-military parties, his first months as prime minister have been challenging. He had to navigate the aftermath of a shooting incident at Siam Paragon mall, where a 14-year-old boy killed three people, including a Chinese tourist.
Opposition lawmakers have criticized him for lacking a clear economic agenda, and he faces mounting pressure over a US$15 billion “digital wallet” economic program that aims to distribute 10,000 baht (US$274) to all citizens aged 16 and above. Critics argue that such massive expenditure could increase public debt and jeopardize Thailand’s financial stability in the long run.
Aligning himself with a major global power like China, especially on environmentally conscious initiatives, could enhance Mr Srettha’s image and popularity within Thailand. If the agreements signed during his visit translate into tangible benefits for the country, it could improve his chances of re-election and ensure a lasting legacy.
Understanding how different segments of Thai society perceive the alignment with China is crucial. Business leaders may see economic opportunities, while environmental activists may focus on ecological impacts. Ordinary citizens may evaluate the tangible benefits and influence their political choices. Political opponents may exploit the alignment for campaign purposes, shaping public discourse and elections.
Analysts predict that the new Thai government will continue supporting Chinese investment in existing projects. China was the largest foreign investor in Thailand last year, with a total investment of 77.4 billion baht. From January to June of this year, China has already committed 61.53 billion baht, making it the largest foreign investor in Thailand. The close relationship between Thailand and China is expected to continue growing, with a focus on infrastructure development, trade, and cultural exchanges.
However, the success of this alignment is not without challenges. Thailand’s economy is currently facing slow growth and high household debt, while China’s own economic challenges could impact its ability to invest as anticipated. Furthermore, Thailand’s growing alignment with China may raise concerns for the United States, which aims to maintain its influence in the region.
For Prime Minister Srettha Thavisin, the success of his diplomacy with China is crucial for his political future. He faces criticism for lacking a clear economic agenda and pressure over a large-scale economic program that could increase public debt. Aligning with China, particularly on environmentally conscious initiatives, could enhance his image and popularity within Thailand.
The perception of this alignment among different segments of Thai society is important, as it can shape public discourse and political choices. Business leaders may see economic opportunities, environmental activists may focus on ecological impacts, and ordinary citizens may evaluate the tangible benefits. Political opponents may also exploit the alignment for campaign purposes.
Overall, while the Thailand-China alignment holds potential for economic cooperation and development, it also presents challenges and considerations that need to be carefully managed.
