China should be more generous in Thai-Sino rail deal

China should be more generous in Thai-Sino rail deal

The Dec 3 memorandum of understanding on a railway construction project between Thailand and China heralded a step forward for closer Thai-Sino relations.

As the government boasts of the progress it has made, the signing of the 867km medium-speed railway line in Thailand by Transport Minister Arkhom Termpittayapaisith and the deputy head of China's National Development and Reform Commission, Wang Xiaotao, has raised concerns it would create a debt burden for Thais.

Besides, the fact the document was inked just 20 days after Thailand secretly deported two UNHCR-protected Chinese dissidents to China made many suspect the signing represents an attempt by the National Council for Peace and Order to convince the public that a military government is no less capable than an elected civilian government.

The secret deportation of the dissidents has drawn condemnation from the international community. Deputy Prime Minister Prawit Wongsuwon's excuse the government did not realise the dissidents were protected simply cast a bad light on him and the junta.

The military regime should learn from recent history that playing power games with bigger powers, such as when Marshal Sarit Thanarat flirted with America and brought Thailand under the falcon's wings, may come at a high cost.

China is no less tricky than the US when it deals with authoritarian regimes to pursue its own interests. For China, the MoU takes the Asian giant a step forward towards its ultimate goal of achieving a 3,840km seamless rail link to Singapore. The project, likely to cost about 400 billion baht -- double the estimate provided when it was created three years ago -- would be a good piece in the jigsaw of President Xi Jinping's "Yi Dai, Yi Lu" or "One Belt One Road" initiative.

The Sino-Thai signing was performed a day after senior ministers of China and Laos shovelled sand as a symbolic ground-breaking ceremony for the US$6 billion (216 billion baht) rail project to be linked further with the future route in Thailand.

But what exactly will Thailand gain from this deal?

In terms of knowledge transfer, this project is welcome. Thai technicians would get training on a wide front including rail systems, tracks, repair, train control and safety.

The government also should push for a promise that China will transfer its skills and experience in railway operations and management to Thais without reservations.

Many are glad that China will buy our rice and rubber.

China National Cereals, Oils and Foodstuffs Corporation signed a contract with the Foreign Trade Department of the Commerce Ministry to purchase 1 million tonnes of newly-harvested rice from Thailand; China's Sinochem and the Rubber Authority of Thailand also inked a purchase agreement, under which Thailand will sell 200,000 tonnes of natural rubber to the Chinese company.

Of course, the government wants such a megaproject to revitalise the sagging economy. However, some questions remain.

Even though Chinese ambassador Ning Fukui remarked earlier this year that Beijing would "consider providing loans to Thailand at a fixed interest rate and on conditions more favourable than on the international financial market", some saw his words as merely a nice pledge.

The Thai transport minister had already signalled the two sides would have to negotiate for better terms, as the interest rate which China was prepared to offer was higher than the government was expecting.

Making the farm deal part of the railway construction payment, and reducing the interest rate and debt burden, appear to offer a better way forward.

If China does not lower the cost, the project may not be cost-effective.

Some observers also have challenged claims the Nong Khai-Kaeng Khoi-Map Ta Phut rail project would boost Chinese tourism given that the trains proposed on the route -- 1.435 m standard-gauge trains operating at top speeds of 160-180km per hour -- may not be attractive to tourists.

The Thai minister's stance prompted the Chinese side to complain about the delay. Under the initial plan, the two sides should have started groundbreaking work by now.

Some breathed a sigh of relief after the government expressed interest in working on the Trans-Pacific Partnership trade deal, which appeared to offer some geopolitical balance after months of courting Beijing.

As we know, China is ambitious to be the world's leader in railroad construction, just as it is in the region -- edging out Japan two months ago from the rights to build Indonesia's first high-speed rail from Jakarta to Bandung.

China should still show more generosity. The railway project is not just an economic investment for China in Southeast Asia, but proof that Beijing is a true friend to its smaller neighbours.


Achara Ashayagachat is Senior News Reporter, Bangkok Post.

Achara Ashayagachat

Senior reporter on socio-political issues

Bangkok Post's senior reporter on socio-political issues.

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