Thailand will pay heavy price for over-reliance on China [Editorial]

[webfact]

Thailand will pay heavy price for over-reliance on China

By The Nation

 

 

Beijing’s Belt and Road funding comes with punishing debts and backing for authoritarian regimes 

 

As China celebrates the 5th anniversary of its Belt and Road Initiative (BRI) this year, countries seeking to profit from the scheme should now be asking whether it is in fact in their long-term interest.

 

In September 2013, President Xi Jinping said during his visit to Kazakhstan that China and Central Asia should join to build a new Silk Road, 

resurrecting the ancient trade route from China to Europe.

 

But this was no coy suggestion. Xi had in fact kick-started China’s grand vision to fuse the world via a great trade highway. A month later in Indonesia, he proposed a 21st-century Maritime Silk Road that would span the disputed South China Sea to link China and Asean. The maritime route was later extended beyond the Strait of Malacca and into the India Ocean to reach Africa.

 

Although many view the Belt and Road as an ambitious effort to boost regional cooperation and connectivity, others are more sceptical. The latter group says it serves China’s grand strategy to dominate the world and eventually overtake incumbent superpower the United States.

 

The initiative aims to strengthen infrastructure, trade and investment links between China and some 65 other countries that account collectively for over 30 per cent of global GDP, 62 per cent of population, and 75 per cent of known energy reserves, according to the World Bank.

 

Beijing initially called it One Belt One Road, but after the project expanded to encompass six other economic corridors, the broader description Belt and Road was adopted. The BRI links Southeast Asia to China’s South and Southwest regions via the Mekong River and by the ports and lanes of the South China Sea.

 

Beijing has so far poured nearly US$700 billion into countries under BRI cooperation agreements, much of it spent on mega-infrastructure projects, with railways and roads a top priority.

 

The impacts of Beijing boosting its trade, investment and other assistance are being felt strongly in mainland Southeast Asia, which increasingly resembles an economic periphery of China.

 

To guard its own economic interest, Beijing has offered enthusiastic support to authoritarian regimes in Asean. The Thai junta was shielded by Beijing from criticism by Western countries after the military’s coup toppled an elected civilian government in 2014. Meanwhile Cambodia can afford to ignore criticism of its faltering human rights records for as long as it enjoys Chinese support.

 

But that backing does not come for free. While Beijing may initially offer grants for development, most BRI projects lever a heavy burden of debt on to the host country. China often sets interest on its loans at above the market rate offered by other development lenders such as the World Bank and IMF.

 

Countries including Sri Lanka and Pakistan are already groaning under the load and have expressed worries over whether they can repay Beijing. 

 

Sri Lanka has even handed over a major port in lieu of money owed. 

 

Closer to home, Malaysian Premier Mahathir Mohamad has pulled back from the BRI, cancelling a $20-billion railway and a $2.3-billion natural gas pipeline approved by his predecessor, Najib Razak, citing his country’s ability to repay the debts.

 

Such a signal – coming from the region’s senior-most statesman and a man whose vision for Asean integration as clear as it is enduring – should serve as a warning for others to reconsider their BRI commitments.

 

The Thai military government, however, apparently sees nothing wrong in sticking with China both economically and politically. Economic tsar Somkid Jatusripitak is pushing forward economic, trade and investment links with China without hesitation, acting as if Beijing were the only source of support for his economic plans.

 

That might not be a good move for the country in the long run. The Thai governing elite should learn from other countries in the region and begin considering alternatives.

 

Source: http://www.nationmultimedia.com/detail/opinion/30358048

 

-- © Copyright The Nation 2018-11-07

[jaltsc]

"Thailand will pay heavy price for over-reliance on China."

Too late to change now. Once the water has been let out of the dam, you can't get it back in.

[Samui Bodoh]

"...Thailand will pay heavy price for over-reliance on China..."

 

Thailand is ALREADY paying a heavy price for its reliance on China. Or did you miss the tourist numbers and the associated pleading for more visitors?

 

",,,But that backing does not come for free. While Beijing may initially offer grants for development, most BRI projects lever a heavy burden of debt on to the host country. China often sets interest on its loans at above the market rate offered by other development lenders such as the World Bank and IMF.

Countries including Sri Lanka and Pakistan are already groaning under the load and have expressed worries over whether they can repay Beijing. 

Sri Lanka has even handed over a major port in lieu of money owed..." 

 

Is there anyone out there who can say that they know what secret deals the Junta has already made with China? Seriously, it isn't like the Junta is famed for its transparency, is it? How much of Thailand has ALREADY been handed over, in one form or another?

 

It will take decades for Thailand to recover from this Junta; I hope it was worth it (hint; it wasn't).

 

Sad, sad days for beloved Thailand.

 

 

 

Edited November 6, 2018 by Samui Bodoh

[cooked]

It looks like Myanmar isn't falling for this even though it urgently needs infrastructure projects. They stopped a giant hydrodam project in Myitsone and radically scaled back Chinese plans for a deep sea port and economic zone in Kyaukpyu. This last will still permit the Chinese to import Middle eastern oil through the Kunming pipeline.

Meanwhile Thailand wants a high speed train network mostly paid for, constructed and run by, the Chinese, which most Thais won't be able to afford and has no provisions for freight traffic.

[ChrisY1]

With most elite here in Thailand, their Chinese heritage naturally leans toward China...with traditional suspicions of westerners......as is common in much of SE Asia.

Many Thai-Chinese are confident that China will be achieve major power status globally within the next 20-50 years....and IMO, are happy that Thailand is leaning toward them.

 

[YetAnother]

3 hours ago, webfact said:

Countries including Sri Lanka and Pakistan are already groaning under the load and have expressed worries over whether they can repay Beijing. 

 

Sri Lanka has even handed over a major port in lieu of money owed. 

one of china's economic (war) strategies

[Time Traveller]

Actually Thailand is a little smarter than these journalists like to admit. Why? Because they can just confiscate foreign owned assets whenever they feel like it despite any previous promises or International Trade agreements.

Remember the Australian Kingsgate gold mine in Loei province? If Thailand wants to get rid of the foreigner (after accepting their investment capital of course) they just make up a new law and take it. 

Chinese money that comes to Thailand, most likely will never be repaid.

[Bundooman]

2 hours ago, cooked said:

It looks like Myanmar isn't falling for this even though it urgently needs infrastructure projects. They stopped a giant hydrodam project in Myitsone and radically scaled back Chinese plans for a deep sea port and economic zone in Kyaukpyu. This last will still permit the Chinese to import Middle eastern oil through the Kunming pipeline.

Meanwhile Thailand wants a high speed train network mostly paid for, constructed and run by, the Chinese, which most Thais won't be able to afford and has no provisions for freight traffic.

I would suggest that China isn't really interested in whether Thais can afford the high speed network or its non-freight carrying capabilities.

But it sure as hell will get a lot of Chinese troops down through Asia at record speed when it eventually suits them.......

[Sir Dude]

The Chinese are not in it for anyone/anything other than themselves and these countries are falling for it because there are fewer strings attached to these massive loans than what comes with the IMF etc. but, as mentioned, the sneaky Chinese have higher interest rates and are quite happy to have these short-sighted countries in their pocket. The IMF and western countries may attach more strings to these loans and can, on many things, be difficult/annoying from non western perspectives but at least you know where you stand with them. You want to trust the Chinese or Russians...good luck with that. Sadly though, it appears to be too late and the ethnic Chinese elite will sell Thailand down the river long before the average Thai even realises what's going on. Just think how many Chinese migrant workers are going to flood Thailand and many say it's already started. The Viets have it right with their highly suspicious stance towards the Chinese.

Edited November 7, 2018 by Sir Dude
Typos

[mercman24]

just cant see it can they and shafting retired ex pats, who must pour absolute billions of baht into the Thai economy. 

[Mad mick]

1 hour ago, Time Traveller said:

Actually Thailand is a little smarter than these journalists like to admit. Why? Because they can just confiscate foreign owned assets whenever they feel like it despite any previous promises or International Trade agreements.

Remember the Australian Kingsgate gold mine in Loei province? If Thailand wants to get rid of the foreigner (after accepting their investment capital of course) they just make up a new law and take it. 

Chinese money that comes to Thailand, most likely will never be repaid.

 

[mike324]

3 hours ago, ChrisY1 said:

With most elite here in Thailand, their Chinese heritage naturally leans toward China...with traditional suspicions of westerners......as is common in much of SE Asia.

Many Thai-Chinese are confident that China will be achieve major power status globally within the next 20-50 years....and IMO, are happy that Thailand is leaning toward them.

 

That is false, the only reason why the government leans toward China because that is the only country giving out loans at low interest rates. So the government accepts it to make it look like they are getting things done in the country - infrastructure being built etc etc.

 

Its not that many Thai-Chinese are confident that China will achieve major power status. The Chinese already have and all western countries know it. They are already a major super power with have a huge influence all over the world.

[Bezdomny]

Ask Greeks how fair IMF loans are...

[cooked]

2 hours ago, Bundooman said:

I would suggest that China isn't really interested in whether Thais can afford the high speed network or its non-freight carrying capabilities.

But it sure as hell will get a lot of Chinese troops down through Asia at record speed when it eventually suits them.......

Maybe but don't be paranoid about it. This really is a BIG way to make money. Where trade interests go, power follows, that's for sure.

[Eric Loh]

40 minutes ago, mike324 said:

That is false, the only reason why the government leans toward China because that is the only country giving out loans at low interest rates. So the government accepts it to make it look like they are getting things done in the country - infrastructure being built etc etc.

 

Its not that many Thai-Chinese are confident that China will achieve major power status. The Chinese already have and all western countries know it. They are already a major super power with have a huge influence all over the world.

It is more than soft loans but also China's tolerance for the military junta government and all their human rights abuses as reported in the op-ed. Japan just provided soft loans to Malaysia for development of their education, infrastructure, technology and HS train. Thailand could have gone to Japan but know full well that Japan will value democratic values and will not be too sympathetic to helping Thailand that has a post coup military government. Thailand really has limited choice for economic friends at this present stage. Things will change with an elected government. 

[Srikcir]

3 hours ago, Time Traveller said:

Remember the Australian Kingsgate gold mine in Loei province?

Not sure of how that fits into your narrative. Thailand is complying with ATFTA with its grievances against Kingsgate, albeit once Prayut understood (I suspect) that the Kingdom of Thailand with the Monarch as Head of State is bound by the terms of the Agreement. Prayut hasn't nationalized the gold mine.

[Srikcir]

7 hours ago, webfact said:

acting as if Beijing were the only source of support for his economic plans. 

That's likely a misrepresentation of Somkid's economic pursuits.

In recent history Japan has made the largest Foreign Direct Investments in Thailand. For example,

China until 2018 has focused on making loans to finance junta projects but declining joint ventures.  Only just mid-year 2018 China has shown interest in investing in the EEC. However, such interest may be more motivated by Japan's investment dominance in the EEC than by Thailand's needs for investments.

 

[Cadbury]

7 hours ago, jaltsc said:

"Thailand will pay heavy price for over-reliance on China."

Too late to change now. Once the water has been let out of the dam, you can't get it back in.

Oh so right. No one will readily know how much the junta has put the country into hock for with China. What with submarines and other weaponry and HS trains and Economic Corridors. Mahathir has pulled the pin on many of Malaysia's China deals because his predecessors commitments were economically unsustainable. Could it be that Thailand is about to learn the hard way? Thai military generals are not generally regarded as being economic geniuses. 

[humbug]

the Japanese investing huge sums is not about influencing a countries policy on this scale, unlike the Chinese, who for 150 years have taken over as the dominant player of influence on this land,from the aryan cultures who came along with their language and subservient ways over the previous 2000 years.

 

just have to look at Somkid and Prawit etc at their chinese origin, in fact you can pretty much say most chinese origin people with thai passports are 'intentional' landing lights for the chinese mothership

[Oziex1]

4 hours ago, Bundooman said:

I would suggest that China isn't really interested in whether Thais can afford the high speed network or its non-freight carrying capabilities.

But it sure as hell will get a lot of Chinese troops down through Asia at record speed when it eventually suits them.......

Should it come to conflict those tracks along with all other transport routes would be disabled in the blink of an eye.  A conflict with the Asian super power would be a disaster but they would not win. 

[Brunolem]

China has developed massive production capacities for everything involved in infrastructure construction: cement, iron, aluminum, you name it.

 

After having covered its country with empty cities desserted by empty airports, empty 6 lane roads and empty high speed trains, there is not much left to cover.

 

So why not go and do the same in ususpecting neighboring countries...at their expense?

 

On the one hand, China can sell its overcapacity and keep its workers busy (something essential for its stability), and on the other hand China stands to make a nice financial profit from its "friendly" loans.

 

Those who stand to lose are...all the other participants, save maybe one or two.

 

They gonna find themselves with high speed trains that they won't be able to operate efficiently, even less maintain, and even less fill up with passengers.

 

They will have highways to nowhere that they won't be able to maintain, empty airports...exactly like in China!

 

And, cherry on the cake, they will also carry a debt toward China that will take forever to get paid.

 

As they say in poker: if you don't know who the patsy is, then it's you!

 

In the case of the BRI, every player is a patsy, save China!

 

[joecoolfrog]

Getting into bed with China is a no brainer for the Junta. No irritating interference in human rights issues and a plethora of major development projects with the accompanying 'commisions' .

Long term consequencies for Thailand , why would it even be an issue ?

[HAKAPALITA]

Bit slow some folks. Chinese already own Thailand.

[DrTuner]

Now I know why Nation bought into TVF. They are using us as a source for their editorials. We've been saying this for how many years now?

[HalfLight]

Yes it will. But by then, the kickbacks will have arrived and the appropriate overseas holidays booked, so nothing to worry about. The 'common good' is only a vague concept for women and children anyway...

Edited November 7, 2018 by HalfLight

[Brunolem]

5 hours ago, Oziex1 said:

Should it come to conflict those tracks along with all other transport routes would be disabled in the blink of an eye.  A conflict with the Asian super power would be a disaster but they would not win. 

Do you mean that China would not win against countries like Laos or Thailand?

[Fex Bluse]

For all intents and purposes, Thailand IS China already. 

 

99% of the Thai influence and power and wealth is Chinese-Thai. There Sino-Thais pretend they are in no way Chinese, but somehow many generations of them continue to marry into only Thai Chinese families, getting whiter and whiter skin. 

 

Chinese complete domination of Thailand is the country's biggest known secret 

[harleyclarkey]

 

 

I was in, dirt poor, Ethiopia recently and asked my driver why were they building many kilometres of a super dual carriageway in the middle of nowhere and serving tiny villages/hamlets.

 

"Chinese money...Chinese labour...Chinese machinery"

It was patently clear to me....loan poor countries billions, build useless projects, then demand interest and repayment wich as planned they do not have. .

 

Nasty work China you really are the worst and lowest of the low. 

 

Moreover, the initiative has pushed some countries into a morass of debt. The starkest example so far has been Sri Lanka, whose government was unable to repay $6 billion in loans used to build an expensive Chinese-led port and airport project in Hambantota, a once-sleepy but strategically located backwater. As a result, Sri Lankan authorities ceded control of the port and some 15,000 acres of land around it to Beijing on a 99-year lease. The move led to accusations that China is engaging in a 21st-century style of “creditor imperialism."  

“States caught in debt bondage to China risk losing both their most valuable natural assets and their very sovereignty,” warned Indian commentator Brahma Chellaney, an outspoken critic of Beijing. “The new imperial giant’s velvet glove cloaks an iron fist — one with the strength to squeeze the vitality out of smaller countries

[wotsdermatter]

Closer to home, Malaysian Premier Mahathir Mohamad has pulled back from the BRI, cancelling a $20-billion railway and a $2.3-billion natural gas pipeline approved by his predecessor, Najib Razak, citing his country’s ability to repay the debts.

 

Just read the article and found it curious that Malaysia cancelled their gas pipeline because of their "ABILITY to repay the debts."  Seems a strange reason, albeit a good thing to do, to stop the intrusion and burden of repaying for something probably not needed.  Although Malaysia was colonized, while Thailand was/did not, they learned some lessons that Thais did not and one was to be wary of somebody offering things that are not necessary and have a big price attached.

 

'nuf sed

[DrTuner]

20 hours ago, harleyclarkey said:

It was patently clear to me....loan poor countries billions, build useless projects, then demand interest and repayment wich as planned they do not have. .

Loansharking is part of Chinese culture, they've just upped the scale to include whole countries.