China Brings Spending Plan to Bangkok

Posted on November 22, 2012


BANGKOK—China’s Premier Wen Jiabao brought the prospect of more infrastructure spending to Thailand, just a day after a regional summit in Cambodia ended in acrimony over how the 10-member Association of Southeast Asian Nations should approach its members’ territorial disputes with Beijing.

Mr. Wen’s visit Wednesday appears to continue China’s focus on building strong bilateral relations with individual Asean nations, a strategy some analysts say is designed to prevent the regional group from speaking with one voice on the tensions in the resource-rich waters. Without going into specifics, or referring to the island disputes, Mr. Wen told reporters in Bangkok that “as the situation in the region has become more complex, China is willing to cooperate with Thailand in development and to tighten cooperation at a regional level.”

Yingluck Shinawatra and Wen Jiabao

Among other things, Thailand’s Prime Minister Yingluck Shinawatra said she had asked China to invest in a $50 billion deep-sea port industrial zone which Thailand has been helping to develop with the Myanmar government in Dawei, southern Myanmar, as well as flood prevention and railway projects. Ms. Yingluck also said China had signed a tentative agreement to buy some of Thailand’s large stockpiles of rice, the result of a multibillion-dollar subsidy to support Thailand’s rural economy.

China’s Ministry of Foreign Affairs has said the disbursement of aid to Asean countries is designed to narrow the economic gap between wealthier members, such as Singapore and Malaysia, and impoverished nations, such as Laos, Myanmar and, especially, Cambodia.

Security analysts said Cambodia helped serve China’s interests earlier this week by claiming that the Asean nations had agreed not take an international approach to issues related to the South China Sea, even while several member states were urging to bring in the U.S. and other regional powers into a wider discussion.

The end result: A split between the Philippines, Indonesia, Malaysia, Singapore, Vietnam and Brunei, which favor broader discussion, and Cambodia, Laos, Myanmar and Thailand—effectively preventing Asean from developing a louder, clearer voice in negotiating with China as a single block.

“China has effectively proven that it intends to sustain passive-aggressive pressure to weaken any unified Asean position on the South China Sea,” said Ernest Bower at the Center for Strategic & International Studies in Washington.

Thailand, a close China ally, laid on a lavish welcome for Mr. Wen just a few days after U.S. President Barack Obama visited Bangkok to help strengthen Washington’s relations with Thailand.

Some analysts suggest U.S.’s re-engagement in East Asia under the Obama administration is amplifying tensions between the Asean members that are close to China and those that are wary of Beijing’s growing clout.

“I think the Philippines and Vietnam are particularly concerned about territorial claims in the South China Sea and that potentially puts them at loggerheads with some of the other countries, such as Cambodia,” said Sarah McDowall, senior Asia-Pacific analyst at IHS Global Insight in London.

This leaves Asean struggling to find a cohesive voice. The trade bloc was founded during the Cold War as a united front against Communism in East Asia, but later transformed into a wildly diverse trade bloc. For years it was at the hub of trade negotiations in Asia and beyond. But now, a broader range of trade agreements are growing up around it, including the China-driven Regional Comprehensive Economic Partnership, which excludes the U.S. and other countries in the Americas, and the U.S.-sponsored Trans-Pacific Partnership.

“If Asean doesn’t speak with one voice, then it won’t be taken seriously by other players, and I think some members are very annoyed with Cambodia for causing this,” said Ian Storey at the Singapore-based Institute for Southeast Asian Studies.

Cambodia’s turn as chair of the group will end this year. In 2013 the tiny, oil rich sultanate of Brunei is taking over the chairmanship of Asean, with the likelihood, Mr. Storey says, that the territory disputes will find a wider audience.


Thailand, China Set Aggressive Targets to Increase Trade

BANGKOK — Thailand and China have agreed to further boost economic ties during a high-level visit by Chinese Premier Wen Jiaboa to Bangkok. Analysts say the visit, following soon after that of U.S. President Barack Obama, highlights increased interest in Southeast Asia’s positive economic outlook.

Chinese Premier Wen Jiabao (L) walks with Thai Prime Minister Yingluck Shinawatra during a welcoming ceremony at the Government House in Bangkok, November 21, 2012.

Talks between Wen and Thai Prime Minister Yingluck Shinawatra on Wednesday were intended to build on a major trading agreement between China and Thailand, announced in April this year.

Under the pact set out for five years, the governments agree to ambitious targets to expand trade and investment, as well as tourism, aiming to raise bilateral trade up to 15 percent a year.

Wen focuses on Thailand

In an address to reporters, Wen said China sees Thailand as an important trading partner. He said both nations agreed to implement the five-year plan on development and trade with a strengthening of cooperation and mutual investment in agriculture, and projects linked to traffic management, water resources and infrastructure.

Yingluck also supported the calls for greater cooperation in the agricultural sector. She said the Chinese government is interested in buying agricultural produce, especially rice.

During the talks, China agreed to purchase more rice from Thailand, both at a state and private-sector level.

Reports this week said Thailand had hoped to sell up to 5 million metric tons of rice to China in a bid to reduce rice stocks that the government has accumulated under a controversial rice pledging program that sets government buying rates above the international market.

US emphasizes Asia-Pacific

China’s purchases of Thai rice have fallen by more than 50 percent this year, since the program was introduced. At the meeting Thursday, China agreed to buy 260,000 tons of rice.

The agreement Thursday follows just days after Obama visited during a trip to promote Washington’s increased focus on trade and diplomacy in the Asia-Pacific.

The United States renewed a long-standing security pact with Thailand and a U.S.-sponsored Trans Pacific Partnership (TPP), largely a free trade area between the U.S. and Asia-Pacific countries.

Competing interests

Somphob Manarangsan, a professor of economics, said the recent visits of the senior leaders from both countries stand in contrast, as China has strong economic ties to the region, while the United States’ key strength has been in security areas, but weaker in economic ties.

“You can see that when President Obama came to this area [the U.S.] try to sell the idea of the TPP – that means to have this improvement of the economic cooperation by the USA with countries of this area,” said Manarangsan. “But Mr. Wen Jiabao – they try to use some cultural factor, education, social, like the opening up of the Chinese cultural centers here in Thailand using the soft power to deal more and more with this area.”

Somphob said that although countries like Thailand so far have been able to strike a balance between Beijing and Washington, that may become harder in the near future as trade, business and investments increase.


Posted in: Economy, Politics