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Thailand-China Relations

The Thai people take pride in their record of independence. They attribute this independence to the Thai tradition of expediency. In their view the wisdom of exuediency enables them to ally with the winning side in international affairs. By bending like bamboo in the wind they are able to preserve their country's independence and maintain a cultural and political tradition which dates back some seven centuries.

Thailand traditionally accommodated the strongest outside power encroaching the area. Prior to the 1850s the power was China; from then until the 1930s, it was Britain, British India and France. In the late 1930s, Siam's orientation shifted toward an ascendent Japan but, since 1945, Bangkok has been closely associated with the United States.

As the shape of Southeast Asia, Asia writ large, and the world has changed, so have Thai attitudes. The Chinese have been making a major push to upgrade all aspects of relations, including mil-mil. Thailand is not interested in making a choice between the US and China (nor are closer Chinese-Thai relations as automatically threatening to US interests), but the US will need to work harder to maintain the preferred status it has enjoyed. While Thai military links with the United States are deeper and far more apparent than Sino-Thai links, China's growing influence in Thailand is readily evident.

Thai government agencies and elites are closely aligned with China in order to gain economic, military, or political benefits. They will not criticize China, nor will they use ‘interference from foreign powers’ to describe China. Chinese-Thai economic relations have deepened in recent years, and China has become the major source of international students for Thai universities, tourists and investment. In 2019, Chinese tourists made up 27.6 percent of Thailand’s foreign visitors, and the China-Thailand high-speed railway program brought in supporting factories and investments. In 2020, China surpassed Japan to become Thailand’s major source of Foreign Direct Investment.

Through mergers and the acquisition of Thai media outlets or through signing MOUs, after 2015 China began providing free content to TV stations in Thailand from party-controlled outlets Xinhua News Agency and China Central Television (CCTV). By 2020, Thai media had become even further under Beijing's influence when covering reports regarding the source of the COVID-19 pandemi.

The Chinese have made a strong effort to court the Thai. The Thai military has a range of Chinese weapons systems in its arsenal; the PLA Navy is interested in closer links with the Thai navy, and China has worked with Thailand to improve air defense equipment provided to Thailand in the late 1980's.

The rise of China, and the perceived absence of a focused US presence in the region in recent years, is another strategic issue of concern to Thailand and the region. Thailand does not seek to choose between the US and China, rather preferring to have good relations with both and hoping the US strengthens engagement in the region. The overall Thai-Chinese relationship had developed rapidly since official relations had been established in 1975. In contrast to many other ASEAN nations, territorial disputes did not negatively impact Thailand's relations with China.

China had made many positive actions in Asia since establishing diplomatic relations with Thailand and other countries in the 1970s. As such, Chinese influence in the region had significantly grown. In contrast, the US government had since the end of the Cold War lagged in engaging Southeast Asia. For example, the focus of US military engagement had shifted to other regions, while China had made significant strides in gaining influence. Nathapol said both US "soft" and "hard" power had diminished, including losses in economic, political, and cultural power.

There was universal praise for Secretary Clinton's ARF-related visit to Thailand in late July 2009, including US accession to the Southeast Asian Treaty of Amity and Cooperation (TAC) and the holding of a US-Lower Mekong Ministerial that underscored Secretary Clinton's comment that: "The US is back in Asia." During a visit to Asia in April 2014, President Barack Obama sought to reassure allies that his long-promised strategic shift towards Asia and the Pacific, widely seen as aimed at countering China's rising influence, was real.

Thailand continues to develop closer relations with China. The Thai military employs a range of Chinese weapons systems, and Thai and Chinese special forces have in recent years conducted joint exercises. China has worked actively to cultivate ties with the Thai parliament; Thai legislators frequently traveled to China, while the number of Thai MPs traveling to the US had declined.

The Thai government had no reason to be suspicious of Chinese military intentions and faced no territorial disputes (such as the South China Sea). As the Chinese economy depended on natural resources from Africa and Asia, its military growth reflected the need to maintain secure sea transportation routes to Africa, primarily the Malacca Strait and the Sunda and Lombok Straits in Indonesia.

ASEAN as whole had turned down a Chinese proposal to conduct joint training but Thai-Chinese military engagement has expanded. The Chinese military was pressing for larger scale exercises with the Thai that would expand beyond special forces. Thailand was reluctant to increase quickly the scale of its military relationship with China because the RTG did not want to be seen as out in front of other ASEAN nations in expanding relations with China.

Thailand and China had conducted their first joint exercise in 2005 with a humanitarian exercise focused on naval search and rescue techniques. This exercise commemorated the thirtieth anniversary of the establishment of Thai-Chinese relations. In recent years, the mil-mil relationship had expanded via a joint counter-terrorism exercise called "Strike" held in Guangzhou, China in 2007 with approximately twenty Thai special forces troops. The exercise was repeated in 2008 when China sent special forces troops to Chiang Mai, Thailand to practice counter-terrorism operations. The Thai contingent in 2008 was of similar scale to that in 2007.

During a visit to Thailand by Chinese Minister of National Defense Liang Guanglie for the King's birthday celebrations in early December 2009, the Thai and Chinese militaries agreed to expand bilateral exercises to include the two nations' navies, marines, and air forces. The initial exercise were conducted early in 2010, with the PLA engaging Thai sailors and marines through an amphibious landing event and a naval rescue and humanitarian relief exercise.

For the month of December 2009, China, for the first time, displaced the United States as Thailand's top export market. For the previous year as a whole, the US barely held on to the number one position it has held for decades, but China is likely to overtake the US in 2010. Counting exports and imports, China is now Thailand's second largest trading partner (following Japan), having overtaken the United States in 2007. While the United States continues to be a major player in the Thai economy, and foreign direct investment from Japan, the US, and Europe still dominates, the new trend arrows point north. In 2009 alone, the value of Chinese investment applications in Thailand increased by more than USD 1 billion.

The data for December were a surprise to some, but when looking at the last three decades of Thai-Chinese economic relations, it is obvious that this day was inevitable. In 1975, the first year of diplomatic relations between Thailand and the PRC, total bilateral trade between the two countries amounted to only USD 25 million. Throughout the 1980s, bilateral relations focused on the political and military spheres, but beginning in the 1990s, the two governments began to negotiate and sign a number of agreements to promote trade and investment. Combined with the rapid expansion of the Chinese economy in 1990s, the governments' efforts meant significant new opportunities for Thai exporters to seize the growing demand in China's massive market.

Trade agreements between Thailand and China, and between ASEAN and China, have bolstered trade, but the main driving force is simply the growth of the China market. Moreover, the burgeoning economic relationship between Thailand and China is facilitated by the large number of Thai with at least part Chinese ethnicity in the Thai commercial sector. Thai trade policy with China has for years been influenced by Sino-Thai trading conglomerates. While cheap Chinese imports hurt some Thai producers, Bangkok is generally reluctant to rock the boat on economic matters with Beijing, even when China's exchange rate policies undermine Thai competitiveness. In fact, Finance Ministry and Bank of Thailand leaders applaud the growing Chinese connections, declaring that Thailand is better off moving away from economic dependence on the West. As Finance Minister Korn told CNN in an interview in January 2010, "The Chinese attitude, diplomatically, politically, and economically, with the rest of Asia has been wholly positive."

Investment from China is still a small fraction of that from more established foreign investors from Japan, the US, and Europe. However, Chinese investors are clearly increasing their presence in Thailand. According to Thailand's Board of Investment, the value of proposed Chinese investments in Thailand increased by more than USD 1 billion in 2009. Chinese applications to the Board of Investment included a proposed power plant worth nearly USD 800 million, a chemical production plant worth more than USD 150 million, and a coal mine project valued at nearly USD 100 million. If these applications are approved (a process which typically takes many months), the 2010 FDI figures from China may be sharply higher than in previous years. Net investment remains relatively low, but trend lines for future investment point upwards, with some Thai officials predicting that China will one day become one of the top investors in Thailand.

In 1995 Cambodia, Laos, Thailand and Vietnam signed the Mekong Agreement, establishing the Mekong River Commission (MRC) and agreeing to joint management of their shared water resources for sustainable development. The two MRC "dialogue partners," Burma and China send observers. As a "dialog partner," China has about half the Mekong River in length but contributes around 16% of the flow downstream (with rain contributing the rest). China had played a minimal role in the transboundary water issues that the MRC was created to address, but by 2010 the new MRC Secretariat leadership helped to change this.

China's new traveling class is also opening up new opportunities for increased trade and investment between the two countries. In 1995, annual tourist arrivals from China amounted to only 15,000, but by 2007, the number of Chinese tourists had swelled to nearly one million, easily surpassing the fewer than 700,000 who arrive annually from the US.

Since the 23 May 2014 coup, Thailand faced diplomatic pressure from the West, including cuts in military assistance, for suspending democracy. That triggered concern among ASEAN members and others that, as a result, Bangkok could be heading towards a closer relationship with Beijing.

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Page last modified: 24-06-2021 17:51:45 ZULU