US Ambassador Michael de Sombre in early October questioned the efficacy of Thailand’s long term fight against the virus and described the kingdom as being a ‘victim of its own success’. Mr De Sombre also raised concerns about deeper cooperation between Thailand and Chinese technology firms with links to the Chinese government in Beijing. 

A meeting between Thai Prime Minister Prayut Chan ocha and the Chinese Foreign Affairs Minister Wang Yi, just hours after the crackdown on protesters outside Government House on Thursday, is heralding closer ties between Thailand and China in the post-Covid world. It also may mean more risk for western firms considering an investment in Thailand as the country moves ever closer to Chinese technology and deeper integration of the controversial Chinese firm Huawei into the country’s communications infrastructure.

The agreements signed between Thailand and China on Thursday last foresee greater cooperation and connectedness between the two countries. This will have implications not only for the US Thai relationship despite the assurances of US Ambassador Michael De Sombre (inset left) earlier this year that Thailand does not have to choose sides between the two powers in the region whose relationship is increasingly strained. The deal was signed at a meeting between Chinese Foreign Minister Wang Yi and his Thai counterpart Don Pramudwinai (inset bottom).

The news cycle in Thailand, this week, has been dominated by the student-led anti-government protests which continued unabated despite the government crackdown which has seen dozens of arrests and the introduction of a state of severe emergency in Bangkok.

However, another event, perhaps also quite significant, has been the visit by Chinese Foreign Affairs Minister Wang Yi to Bangkok last week which has precipitated a range of initiatives which all seems to spell one thing. Thailand is ready to open up its economy again but it looks increasingly like it will be opening up to China.

Chinese Foreign Minister visited Government House last Thursday with news for further Chinese investment in the Eastern Economic Corridor project

After the protesters were removed from outside Government House on Thursday morning, the Thai Prime Minister, Prayut Chan ocha, later met the Chinese Foreign Minister Wang Yi and amid the mutual congratulations over Thailand’s handling of the coronavirus and China’s emergence from its near existential crisis earlier in the year, came the news that China was preparing to initiate further investment in Thailand’s Eastern Economic Corridor project, a flagship initiative sponsored by the former junta government and still being pursued by this ministry.

Under proposals being developed by Thai and Chinese officials over the past year, there are plans to link the development project to China’s huge GBA or the Guangdong-Hong Kong-Macau Greater Bay Area which consists of nine Chinese cities and two special development zones earmarked for priority development by China’s government using command and control techniques much loved by its authoritarian leadership while working with a market-orientated capitalist economy.

Plans envisage links between the EEC, Hong Kong and the Bay Area project in southern China

In recent months, it has already been announced that Thailand will form closer ties with Hong Kong which is increasingly coming under direct control from Beijing. 

It is envisaged that Thailand, through its Eastern Economic Corridor development area, will be linked with both Hong Kong and the new Greater Bay area development in southern China.

It should also be noted that this plan is also part of the China Belt and Road initiative which western experts are increasingly warning is linked as much with the projection of military power as the economic development of China.

High-speed rail link from China to Thailand

Chinese media reported that the meetings in Bangkok on Wednesday and Thursday during the Chinese Foreign Minister’s visit had resulted in an agreement to create ‘fast tracks’ and ‘green lanes’ to facilitate the transport of goods and people between China and Thailand.

Formal co-operation agreements were signed between the  Foreign Minister Wang Yi and his Thai counterpart Don Pramudwinai on Thursday, October 15th.

Thailand has also begun to progress its plans for the development of its rail infrastructure in partnership with China. It is thought that these development were part of last week’s cooperation pact between the two countries.  

At the end of March this year, the Thai PM, Prayut Chan ocha met Chinese President Xi Jinping in Beijing and the first leg of a China to Thailand high-speed rail link between Bangkok and Nakhon Ratchasima was agreed with a contract to be signed, this month, in October. 

First leg of high-speed rail link to China from Bangkok to Nakhon Ratchasima will take 5 years

As late as May, Thailand’s Transport Minister, Saksayam Chidchob promised that the contract would be in place in October following which it will take 5 years to complete.

The cost of this first leg of the rail link with China will be ฿125 billion and will be funded by loans facilitated by China but 80% paid in US dollars, the balance in Thai baht. 

In May, the Thai government announced that an initial ฿50.6 billion contract had been agreed for key components of the development.

Stage two, linking Thailand with Nong Khai and from there through Laos to China is being worked on with China’s state railway company. That 335 km line comes with an estimated cost of ฿200 billion.

Details of the commitment from China this week to invest further in Thailand’s development zone covering the three provinces of Chachoengsao, Rayong and Chonburi were confirmed by government spokesman Anucha Burapachaisri after the Chinese Foreign Minister’s audience with the Prime Minister on Thursday.

Thai government heralds closer 5G links with China as well as work on database and digital projects

Mr Anucha also outlined Thailand’s cooperation with Chinese firms on the development of 5G technologies and digital projects involving the use of big data. Both leaders agreed that the Covid 19 emergency presented an opportunity to forge closer links between the economies of Thailand and China.

The Chinese Foreign Minister, Mr Wang, also noted he was the first foreign minister to visit Thailand since the Covid emergency began.

He promised that the Chinese vaccine in development against the virus would be used for the ‘public good’ and that priority access to it would be given to Thailand as a ‘friend’ of China.

American Ambassador indirectly queries Thailand’s closed border and zero Covid policy

At the beginning of October, the US Ambassador to Thailand, Michael De Sombre appeared to question the efficacy of the Thai government’s Covid policy and said that the kingdom was in danger of becoming a ‘victim of its own success’ because of the economic devastation wrought.

Michael De Sombre defended the US policy and said that the Covid 19 emergency in the United States was being managed quite well. 

‘Cases in the US have gone down significantly, we are talking 35,000 cases a day for a population of 380 million, so it is at a level that is generally manageable and generally low and the mortality rate is quite low’ he said. ‘The US is now focusing on protecting people at risk and making sure the economy keeps operating at this time while we as quickly as possible develop a vaccine.’

Mr De Sombre pointed to American firms who have already invested in Thailand’s Eastern Economic Corridor area and confirmed another facility would be starting up there at the end of this year having chosen Thailand as its Asian base.

American firms invested in the EEC but De Sombre questioned the competitiveness of incentives offered

However, Mr De Sombre said that Thai incentives to encourage investors could be more competitive and took issue with the cumbersome, bureaucratic process of applying for such incentives suggesting that they could be made more streamlined and accessible.

The US envoy, earlier this year, warned Thai officials that the United States was a better friend to Thailand than China. He also promised that Thailand would not have to choose sides but this may be an increasingly difficult position to maintain given the strong divergences between the two powers and heightened tensions.

This month, he also cautioned Thai authorities about their ever-increasing cooperation with Chinese firms on 5G technology alluding to Huawei which US intelligence agencies are warning strongly has been compromised by Chinese intelligence and poses a security risk.

Price to be paid for lower-cost Chinese technology

It is now abundantly clear that Thailand has opted to forge closer ties with Chinese technology firms which offer lower-cost facilities but at a price.

‘Huawei happened to be at the right place at the right time, offering prices that seem very competitive for reasons that aren’t market-based,’ Mr De Sombre said in recent weeks. ‘Ericsson, Nokia and Samsung are all good companies that are not state-owned and obligated to share information with their intelligence services without disclosing.’

Severe ramifications for western firms considering investing in Thailand due to network security worries

The decision by Thailand to proceed with the integration of Huawei kit and technology into its communications and network infrastructure may have severe ramifications at a later stage as western firms using such networks may be compromised.

The decision by Thailand is coming as more western countries, even those in Europe, are changing their policy on Huawei as the United States provides briefings and more information to them on the security threat being posed. 

Some countries have even, reportedly, ripped out equipment from older networks installed by the Chinese firm based on the perceived threat.

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Further reading:

Chinese FM to visit Thailand in a Covid battered world of raised tensions and potential conflict

Lowering of US flag in Chengdu is a wake-up call for foreigners living in Thailand and with close ties here

US is a better friend for Thailand than China says US ambassador as tensions grow between the 2 powers

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Industry boss urges Thailand to join alternative Pacific trade pact and plan for a long recovery from virus debacle

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US China trade war may have some silver lining or upside for Thailand if firms can be agile and adjust

US suspension of Thai preferential trade partner status part of Trump’s ongoing trade war