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Commentary: Thailand is at risk of becoming overly reliant on ‘big brother’ China

BANGKOK: Since the beginning of his term as Thailand’s Prime Minister in August, Srettha Thavisin has actively worked to strengthen relations with China. One of his early key meetings was with the Chinese ambassador, establishing the groundwork for subsequent diplomatic engagements to bring the two nations closer.

An important and symbolic gesture in strengthening those ties was the introduction of visa-free entry for Chinese visitors to Thailand in September. Mr Srettha personally welcomed the first batch of Chinese visitors, underlining the significance of this group of travellers to Thailand’s tourism-dependent economy.

Earlier this month, Mr Srettha made an official visit to China, where he also attended the third Belt and Road Forum for International Cooperation. That it was his first official visit outside the Association of Southeast Asian Nations (ASEAN) further demonstrates the importance the new Pheu Thai government attaches to Thailand-China relations. Mr Srettha also invited Chinese President Xi Jinping to visit Thailand.

“(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,” Mr Srettha was cited as saying in local media.

On their end, China pledged to add new dimensions to the “family-like relations”, Mr Xi said.

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BLOOD IS THICKER THAN WATER?

China and Thailand have a long history of close economic ties, with diplomatic relations dating back to July 1975.

During Mr Srettha’s recent trip to China, Thailand signed a slew of bilateral agreements covering various sectors, including infrastructure, trade and cultural exchanges.

One of the key outcomes of the visit was the focus on green initiatives and high-speed rail projects.

Thailand’s commitment to environmental conservation is evident, and the country seeks Chinese investments to realise these goals. China’s experience in high-speed rail development makes it a valuable partner for Thailand’s ambitious rail projects.

The positive aspects of this close relationship with China are clear. Chinese investments in Thailand’s green initiatives can significantly speed up the country’s transition to a more sustainable and eco-friendly economy, reducing carbon emissions and preserving Thailand’s natural beauty and resources.

Furthermore, support for high-speed rail projects is crucial for enhancing Thailand’s infrastructure, connectivity and transportation network. Efficient rail systems can boost economic development, improve logistics and stimulate both domestic and international trade.

While China and Thailand may resemble brothers in the context of international diplomacy, siblings can sometimes have complex relationships. The strengthened partnership with China is not without its challenges.

Mr Srettha has made it clear that Thailand’s economy needs a significant boost to increase growth, alleviate household debt and improve livelihoods. The economy grew just 1.8 per cent in the second quarter from a year earlier, while household debt has risen to 90.6 per cent of gross domestic product.

China’s economy is also under pressure, with a range of challenges from a property crisis, high youth unemployment and US-China tensions over trade. Its own economic slowdown might hinder its ability to invest as robustly as anticipated. As China is one of Thailand’s major trade and investment partners, its economic health directly affects Thailand. A slowdown in China could have adverse effects on the Thai economy, leading to reduced exports and potentially impacting the livelihoods of the Thai people.

Additionally, Thailand’s closer alignment with China might raise concerns in the United States, a key ally and trading partner. The US is keen on maintaining its influence in the region, and Thailand’s growing ties with China could be viewed with suspicion. Managing this can be particularly challenging against the backdrop of strategic competition in US-China relations.

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SRETTHA’S PERSONAL POLITICAL AGENDA

For Mr Srettha, the success of his diplomacy with China holds significant weight for his political fortunes.

The 60-year-old property mogul turned prime minister is a political novice who took office in August after an unlikely alliance between Pheu Thai and pro-military parties following months of post-election deadlock.

The first two months of his prime ministership has been rocky. Earlier this month, he had to navigate the tragedy of a shooting at Siam Paragon mall by a 14-year-old boy. A Chinese tourist was among three people who were killed. 

He has also drawn flak from opposition lawmakers for having an “aimless” economic agenda, and is facing mounting pressure over a US$15 billion “digital wallet” economic programme to hand out 10,000 baht (US$274) to all citizens aged 16 years and above. Critics say such a massive expenditure will run up public debt and hurt Thailand’s financial stability in the long run.

Aligning himself with a major global power like China, especially on environmentally conscious initiatives, may enhance his image and popularity at home. If the agreements signed during this visit translate into tangible benefits for Thailand, it could improve his chances of re-election and ensure a lasting legacy.

Understanding how different segments of Thai society, including business leaders, environmental activists, ordinary citizens and political opponents, perceive the alignment with China is vital. Business leaders may see economic opportunities, while environmental activists may focus on ecological impacts, and ordinary citizens’ views on tangible benefits may sway their political choices. Additionally, political opponents may use the alignment as a campaign point, shaping public discourse and elections.

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PROMISE OF BELT AND ROAD

Analysts have anticipated that the new Thai government will support more Chinese investment in existing projects. Last year, China was the biggest foreign investor in Thailand, totalling 77.4 billion baht. With 61.53 billion baht committed from January to June, it is also the largest foreign investor in Thailand this year.

During his trip to China, Mr Srettha went all out to woo big investors, meeting representatives of major Chinese firms such as Alibaba Group, Xiaomi and Ping An.

China and Thailand also agreed to make “solid efforts” to accelerate the construction of the China-Thailand high-speed railway and connect the already operational China-Laos railway with Thailand. These are all important parts of Beijing’s massive Belt and Road Initiative (BRI). Engaging with the BRI allows Thailand to secure investments in crucial infrastructure projects and strengthen its connectivity with neighbouring nations.

Nevertheless, the growing alignment with China raises concerns due to the risk of becoming overly reliant on a single, economically influential trading partner. To mitigate these risks, it would be prudent for Thailand to strengthen its trade and investment ties with various countries, including the United States and neighbouring Asian nations. Such a diversified approach would safeguard Thailand against economic shocks and enhance its long-term financial stability and resilience.

All in all, Mr Srettha’s endeavour to strengthen ties with China holds both promise and peril for Thailand. Economic growth, environmental sustainability and improved infrastructure are within reach, but these benefits must be balanced with maintaining a vital partnership with the United States. The success of Mr Srettha’s diplomacy with China carries significant weight for his political future.

Prem Singh Gill is a Visiting Research Fellow at Universitas Muhammadiyah Yogyakarta, Indonesia and a Scholar in Thailand.

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