Integrity Legal

3rd September 2013

A recent article posted on the official MCOT website noted that Thailand’s Prime Minister Yingluck Shinawatra is currently visiting Nanning, China. Nanning is the capital of Guangxi Zhuang Autonomous Region. Apparently she is visiting in her official capacity and attending the commencement of the China-ASEAN Business and Investment Summit and the 10th China-ASEAN Expo. These activities are reportedly to continue until the 6th of September. A government spokesman pointed out that the Kingdom of Thailand and the Peoples’ Republic of China are seeking to increase bilateral trade volume to $100 billion by 2015. The same spokesman also noted that the Chinese Prime Minister has signaled Chinese intentions to purchase 1 million tons of rice from Thailand.

The issue of international purchases of Thai rice has been controversial in recent months as the current Thai government has taken criticism for the so-called rice pledging scheme. Should the Chinese government ultimately purchase the amount of rice noted above it could be viewed as a positive development for the Thai agricultural sector as a whole and the rice sector in particular.

It was also noted that Chinese officials had displayed interest in investing in the Thai rubber industry. As in the case of the Thai rice pledging scheme, the current government has dealt with frustration from labor groups in the Thai rubber industry as protests of current policy have even caused highways and railways to be closed in Southern Thailand. Perhaps an influx of Chinese investment could ease some of these tensions and result in a more prosperous Thai rubber sector in the future.

Meanwhile, the issue of railways also seems to be of importance to Thai, ASEAN, and Chinese officials attending the summit as Thailand appears set upon investing 2 trillion baht in infrastructure projects including construction of high speed rail systems. It is hoped that by the year 2020 Thailand will have a high speed rail system connecting to China via Laos. In the previous posting on this blog it was pointed out that Chinese businesses are repositioning themselves both strategically and geographically in an effort to gain further access to what they believe to be an increasingly lucrative ASEAN market. By creating a high speed rail link between China and Thailand, Thai officials could place Thailand in a very beneficial position in the future since such a system would facilitate further trade not only between China and Thailand, but also between those two countries and the other ASEAN markets.


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