Prime Minister Prayut Chan-ocha on Thursday brushed aside concern that Vietnam was beginning to eclipse Thailand as a regional manufacturing base, saying Vietnam is a friend not a competitor.
The comments came during a visit to Bangkok by Vietnamese Prime Minister Nguyen Tan Dung, and at a time when a number of foreign companies are shifting manufacturing operations from Thailand to Vietnam, partly for logistical reasons.
"Today, we use the word friend and not competitor," Gen Prayut told a news conference with Mr Dung after a joint cabinet meeting, adding that Thailand was Vietnam's biggest trade partner in the Association of Southeast Asian Nations region.
Thai officials have expressed concern that Vietnam is attracting more foreign manufacturing investment, an additional worry for a government seeking to spur private investment to quicken slow growth.
The Thai and Vietnamese prime ministers shake hands in a press conference after a joint cabinet meeting. (Photo by Thiti Wannamontha)
A decade of intermittent political turbulence in Thailand, including outbreaks of violence on the streets, has added to questions about the country's suitability as a regional manufacturing base for some foreign investors.
Gen Prayut promised that Thailand would be a leading investor in Vietnam and invited Vietnam to join Thailand, Malaysia and Indonesia in the International Tripartite Rubber Council set up to boost rubber prices.
The two countries agreed to promote tourism, speed up a plan to launch bus links through Laos, develop ferry links, increase flight frequencies and encourage their airlines to fly to new destinations.
Mr Dung told the news conference Thailand and Vietnam agreed to increase two-way trade to US$20 billion by 2020.
Two-way trade between Thailand and Vietnam was $11.8 billion in 2014, according to the Commerce Ministry.
Since the 2014 coup Thailand has sought to improve its ties with China, whose relations with neighbour Vietnam have been strained by a territorial dispute in the South China Sea.
China has overlapping claims with Vietnam, the Philippines, Malaysia, Taiwan and Brunei in the South China Sea through which $5 trillion in sea-borne trade passes every year.
Thailand and Vietnam said territorial disputes in the South China Sea had affected trust and confidence and "may undermine peace and stability as well as safety and freedom of navigation".
Both countries emphasised the need for full and effective implementation of a declaration on the conduct of parties in the South China Sea.