Later this week, 37 heads of state and government, as well as 5,000 participants from over 150 countries, will converge on Beijing for the second Belt and Road Initiative Forum for International Cooperation. The mammoth gathering of dignitaries and policymakers is crucial for the five-year-old BRI to gain wider recognition and power to move onto the next cycle with new lessons learned and adjustments made. For President Xi Jinping, it will be a moment of truth for his leadership and China's dream.
All Asean leaders, comprising one-quarter of top global leaders, are scheduled to attend the forum. It is a testimony to each member's support and commitment to the global scheme and ongoing projects in their countries.
Since Thailand is also an early BRI backer and one of its recipients, increased attention has now begun to focus on the current marathon negotiations with China over the US$12 billion high-speed railway project, which began with much fanfare at the end of 2015. China watchers are eager to know what challenges and prospects both sides faced over the past four years with their unsettling deal and ever-changing criteria.
Are there lessons to be drawn from the Sino-Thai negotiations? From the beginning, repeated criticism has been heaped on China's continent-wide BRI schemes. Among key allegations was the toxic "debt trap" for recipient countries and Beijing's desire to expand its geopolitical influence to challenge the West. Examples from Africa and South Asia were highlighted as the BRI's dark side.
Before the current deal, previous Thai governments under former prime ministers Abhisit Vejjajiva and Yingluck Shinawatra signed several MOUs to improve connectivity and infrastructure. However, back in 2015, nobody in Thailand would have thought for a minute that the country's largest ever deal would drag on this long, given the excellent Sino-Thai ties. From the start, it was supposed to be a wholly China-owned project, like the numerous deals that Beijing had successfully completed in other countries. As the bilateral negotiations deepened, domestic opposition was getting stronger, targeting the lack of transparency and shared benefits, forcing Prayut Chan-o-cha's government to retreat. Forceful voices from some academic circles also argued that the country's bargaining power had been compromised due to the government's decision to pick China as the investor to transform Thailand into Asean's transportation hub.
Then, new ideas and plans emerged, forcing both sides to consider a joint venture plan. After several rounds of negotiation, they still could not agree on the size of their investment and shared risks. To save the deal and appease local stakeholders, Thailand then decided to take on the whole project so that it could have more say in the overall design and benefits, especially the environmental impact assessments.
At this juncture, one could easily argue that the high comfort level between the Thai and Chinese negotiators permits both sides the luxury of working on the project's nitty-gritty details, which will link the Northeast and Central Thailand with Laos and China's high-speed train network. After nearly 30 rounds of negotiations, Thailand and China still cannot sign the final contract on the multiple-phase, 873-kilometre railway that was supposed to begin in 2016 and be completed in three years.
Truth be told, if such negotiations had taken place between anyone other than China and Thailand, the whole deal would have collapsed in no time. Other recipients would have yielded to China's pressure and time-consuming negotiating process. Malaysia's recent decision to continue its Eastern Coast Rail Link after some serious budget and route revisions demonstrates the dedicated nature of bilateral agreements on mega-infrastructure projects, which involve huge loans and workforces. Malaysia's former prime minister Tunku Najib Razak was the most enthusiastic supporter among the Asean leaders, signing up for more than two dozen projects.
Fortunately, China and Malaysia under it appears the militants timed their attacks to coincide with Easter celebrations succeeded in pushing ahead with the ECRL project, despite some collateral damage, making several other BRI projects in Malaysia now viable. Elsewhere in the region, both China and Myanmar are trying to renegotiate the $3.6 billion Myitsone Dam project, which was unceremoniously halted in 2011 after widespread protests at home. The outcome will be closely scrutinised by the regional and international communities.
Frankly speaking, the Sino-Thai negotiations have helped the Thai authorities to gain a better and deeper understanding of the thinking and business practices of the new China. In the past, Thailand often looked to China for expediency and favourable terms -- an old habit. Now China has become more business-like and an all-weather negotiator. It is fair to say that Thailand and China have been patient with each other as they learn anew the other's business practices, which are derived from different cultures, languages, values and norms. But it has not been a frustration-free process. Language competency and cross-references in Thai-Chinese-English among concerned officials have been extremely time-consuming.
One of the latest hurdles is the length of the project's insurance and interest rates. China is going for a one-year period, but Thailand has insisted on two years, stating that is standard practice. One senior Thai official who is familiar with the negotiation stated that the deal must be a "win-win-win" outcome. "It must have three wins -- for the government, the private sector and for the people," he said.
Multiple contracts with state and private enterprises in both countries have further complicated deals that need further consultations and consensus. It is no longer a top-down decision as before, especially on the Chinese side. In the case of Thailand, it must be an inclusive process, as civil society and professional groups are important stakeholders. Their active participation, despite Thailand still being under military rule, drew the chagrin of the Chinese at the beginning. As the learning curve narrows, Beijing has become more responsive and willing to amend deals with input from the ground level, making the negotiations more holistic and less opaque.
China understands the significance of the Sino-Thai deal for the rest of the world, especially when the global community is taking a serious look at the BRI schemes. China's negotiating style and patterns in Malaysia, Myanmar and Thailand yield valuable lessons that can improve the BRI's image or refute the pitfalls and allegations often heard worldwide.
Beyond that, it would also encourage Asean in the future to give a full endorsement to the BRI and make further plans to synergise its Master Plan of Connectivity with it.
Kavi Chongkittavorn is a veteran journalist on regional affairs.