China's influence over Thailand and Asean to keep growing, experts say

[webfact]

China's influence over Thailand and Asean to keep growing, experts say
SOMLUCK SRIMALEE,
PETCHANET PRATRUANGKRAI
THE NATION

BANGKOK: -- THE Thailand-China relationship over the next decades will become closer in every way, including trade, investment, tourism and services based on mutual benefit, while China will also play a more significant role throughout the Asean region as a key economic supporter, observers say.

Kraisin Vongsurakrai, secretary-general of the Thailand-China Business Council and vice chairman of the Board of Trade of Thailand, said that from now on trade and investment between the two countries would grow significantly. They will see closer cooperation not only under the China-Thailand Free-Trade Agreement but also under |the Asean-China FTA and the Regional Comprehensive Economic Partnership.

"Relations between Thailand and China will strengthen in all dimensions into the fifth decade of their diplomatic relationship. Thai and Chinese businesspeople will also work together in doing businesses in both nations and in third countries," Kraisin said.

He believes more trade between Thailand and China will be denominated in the latter's renminbi currency, better known as the yuan.

Kraisin said the yuan would be used more in regional trading in the near future once it is fully convertible and functioning as an international reserve currency.

He said the Asean region would continue to grow in parallel with China, since that country plays many roles in the region's economic activities including export-import, investment and tourism.

In the past few years, China's financial sector has become a key supporter for Thailand and other countries in Asean, and has encouraged Thailand and the others to support China's initiative to establish the Asian Infrastructure Investment Bank.

In one instance of Thailand-China collaboration, they will finalise an agreement on building |a high-speed railway with total length of 873 kilometres. The first |leg will run from Bangkok to |Kaeng Khoi in Saraburi province and Map Ta Phut in Chon Buri. The second will link Kaeng Khoi and Nong Khai.

Elsewhere in the region, China and Laos this month signed a memorandum of understanding to strengthen their cooperation in human-resource development. China is also committed to providing financial support to two events in Laos: the 40th anniversary of the founding of the Lao People's Democratic Republic at the end of this year and the Asean Summit in 2016.

According to the Board of Investment of Thailand, China has been this country's second-largest foreign investor after Japan for the past seven years (2008-2014). The BOI received applications by Chinese investors for 21 projects in 2008, and the total number of projects had reached 74 as of the end of 2014. Of those, the BOI approved 40 projects last year.

Renminbi in Thailand and Asean

The combined value of direct investment from China was Bt3.47 billion in 2008, and had soared to Bt38.2 billion by 2014.

Kraisin said that although the whole Asean region had tightened its relationship with China over the years, China-Thailand ties were particularly strong as Beijing sees this country as a key investment and trading base to Asean and other third countries.

Sompop Manarungsan, president of the Panyapiwat Institute of Management, said besides Thailand, China would invest more in Asean countries, mainly Cambodia, Laos and Myanmar (CLM).

"With the strong ties [with China] and its good basic infrastructure, Thailand will become the bridge linking China's supply chain to CLM countries," he said.

Pisanu Riengmahasarn, former deputy permanent secretary of the Commerce Ministry and former Thai Trade Representative to |China, said the land-bridge pro-|jects linking Thailand and China |via the North-South and East-|West Economic Corridors would facilitate more trade and invest-ment between China and Asean region.

He said more cooperation would be seen in the following decades, particularly in infrastructure development, as well as investment in high-technology industries and value-added manufacturing.

To promote sustainable ties between the two sides, Pisanu advised Thai traders and investors to focus on mutual benefits.

Private ties

Thailand and China can be considered relatives, as one-third of Thais have Chinese blood. Thus many Thai businesspeople are |comfortable doing more trade |and investment with China, Kraisin said.

He pointed out that as an example of the long-time good relations with China, the Thai-Chinese Chamber of Commerce was set up in 1910, before the establishment of the Thai Chamber of Commerce. The Thai-Chinese Chamber now has more than 500 members.

To promote more trade and investment between the two countries, Kraisin advised Thai businesspeople to cross the language barrier by sending more young Thais to learn Mandarin and promote the teaching of Chinese in Thailand's schools.

The two governments should also discuss tariff and non-tariff barriers, as despite the FTA with Thailand, China's provinces still impose high tariffs for some goods. Thai investors should also form joint ventures with Chinese enterprises to facilitate their expansion into that market, particular in newly emerging interior provinces, after many investments in coastal cities.

Businesses that have high potential for Thai investors in China are processed food, alternative energy, and green high-technology industries.

China is one of the largest markets for Thai agricultural exports, mainly rice, tapioca, rubber and fruits. Chinese demand has had a strong influence on the prices of Thai commodities during the past several years.

To promote more exports to China, Sompop advised Thai traders to focus more on the emerging middle-income group and the rising number of ageing people.

"Chinese consumer behaviour and lifestyles have been changing. With more income, Chinese consumers will have high demand for goods, more beauty products, and food safety, while they will also be concerned about the environment," he said.

Within five years, 60 per cent of China's people will be living in the cities. Within two years, China will also become an ageing society, 240 million of its people will be over 60 years old, Sompop said. Thus Thai traders should consider penetrating those markets.

The Commerce Ministry reports that between 1991 and 2014, |two-way trade between Thailand and China rose by 43 times |from US$1.48 billion to $63.58 |billion. Exports from Thailand |grew from only $340,000 in |1991 to $25.08 billion, while im-ports jumped from $1.15 billion to $38.5 billion during the past 23 years.

In the first four months of this year, exports from Thailand to China declined 11 per cent year-on-year to $7.45 billion, while imports from China were up 10.7 per cent to $12.98 billion.

Major trading partner

China has been Thailand's |largest export destination since 2010, and the Kingdom's largest import source since 2014. Two-way trade between Thailand and China in 1991 accounted for 2.25 per cent of this country's global trade value. That figure had risen to 13.96 per cent as of 2014.

As well, the number of Chinese tourists visiting Thailand has risen significantly during the past seven years. In 2010, 1.13 million Chinese tourists visited Thailand, 2.8 million in 2012, 4.64 million in 2013, and 4.62 million in 2014. This year, the number of Chinese travelling to Thailand is expected to reach 5 million.

More Thai tourists are also expected to visit China, from about 700,000 last year to 1 million this year.

This is the first instalment of a series commemorating the 40th anniversary of diplomatic relations between Thailand and China. |The second instalment will run this week.

Source: http://www.nationmultimedia.com/business/Chinas-influence-over-Thailand-and-Asean-to-keep-g-30263302.html


-- The Nation 2015-06-29

[waza]

"China's influence over Thailand and ASEAN to keep growing".

Thailand gets the carrot, high speed trains to Beijing, Chinese tourist, trade agreements and financing from the Asian Infrastructure Investment Bank. While Vietnam and the Philippines get the stick, Chinese sand castles..

"In his most direct public criticism of Chinese construction on the contested Spratly Islands archipelago of the South China Sea, U.S. Pacific fleet Commander Admiral Harry Harris Jr. accused Beijing of building a “great wall of sand” over areas claimed by several nations."

Edited June 28, 2015 by waza

[daoyai]

They just want to rape the environment of all the natural resources, but hey, that's just how they roll.

[Manbing]

While the money is moving China's going to fly.

However, if markets shrink and people stop spending in the face of austerity, who is China selling their manufactured goods to?

China has alot of debt, built on the back of promised growth of exports.

No tickey, no washee

[Srikcir]

As part of this series I wonder if there will be an article to celebrate the END of the 15-year Chinese communist insurgency to overthrow the Thai constitutional monarchy?

The Thai people should never forget that communism is an anti-religion, one-party proletariat form of governance that is not compatible with democratic constitutional monarchies. China make may a great trading partner but as a bedmate a nation shouldn't fall asleep or it may never wake.

[quandow]

While there are plenty of things wrong with the U.S., they ARE a solid trade partner. Now that the U.S./Thai relationship has become strained a little over Thailand's irresponsible behavior, Thailand turns to China.

Instead of pulling up their socks and taking care of the issues that they've "outed" on, they think they can rely on China, a nation with deplorable human rights issues and business practices that are beneficial in only one way - theirs.

This will have far reaching, disturbing results for Thailand. Soom noom na.

[Manbing]

While the money is moving China's going to fly.

However, if markets shrink and people stop spending in the face of austerity, who is China selling their manufactured goods to?

China has alot of debt, built on the back of promised growth of exports.

No tickey, no washee

I'm sorry to say that this is a popular misconception.

The Chinese to not manufacture and then sell. They only manufacture on order. The few items that are available online are only surplus supplies of previous orders. They do not and never will outlay a cent of their own.

Thailand on the other hand has prostituted themselves to the Chinese and everyone else with a dollar in their hand.

Bend over baby the Chinese are in town.

It used to be Yankee's doodle but now it is dim sim.

The misconception is yours,

I never mentioned orders or anything like that. I didn't suggest they have manufactured goods lying around unsold.

The fact is China has spent and invested a lot to be in a position to manufacture for the world. But without orders they won't be able to repay the considerable debt they owe.

There is a knock on effect too. Especially for countries like Thailand who rely on the supply of raw materials to China for their main income sources.

[Praematura]

Chinese buying stocks at 100x earrings on cheap loans. When the bubble bursts those not in TPP will come hat in hand. Yuan as a reserve or regional currency...lol.

[djlest]

I just hate buying Chinese goods - 90% of anything from China stops working a few weeks after, falls apart or is just junk. I just dont see why the World doesnt see fit to improve and boycott Chinese crap completely.
20 years ago the quality of stuff was just miles better - things were regulated before it was let into a country, tested and had to adhere to standards.

Nowdays that doesnt exist... corruption is the new standard.
Made in Thailand, Taiwan, Korea, Singapore used to be on all the labels - but now they have let China undercut them - or perhaps the Chinese are just better workers, less lazy and more drive?
Well either way - if anything to is improve it wont be from China

[Shaunduhpostman]

It seems Thailand will be caught off guard eventually, if it hasn't already. Among other things, from the get go, there is this notion we hear again and again and repeated in the above article, that after all many Thais are Chinese, so we are family, and you don't need to worry your pretty little heads, Uncle China will be there with bags of money for you and generally take care of you. Really an unfortunate, deceptive and dangerous notion if Thailand wants to avoid finding itself under the boot heel of China's corporations and financial institutions. I think you might even be hard pressed to argue that most Chinese people in China aren't firmly under it as well, so I really cannot fathom how Thailand will ever fair well under a people already well known in Thailand as jai dum. Unfortunately for Thailand, their nationalism will too often blinker them from being able to take in what has happened in places like Africa when they have allowed Chinese companies in and given them too much of free reign. Or why China would be any kinder to Thailand than the Philippines or Vietnam and others in the region.

[Cats4ever]

Despite the apparent hatred of China and or Chinese, you must follow the money. The Middle Kingdom is on the way back. I am not an apologist for their authoritarian, capital punishment heavy regime. Wealth brings influence. Just watch.

[cookee68]

The way things have been going lately I would have thought that it would have been the other way round.

[Mudcrab]

I just hate buying Chinese goods - 90% of anything from China stops working a few weeks after, falls apart or is just junk. I just dont see why the World doesnt see fit to improve and boycott Chinese crap completely.

20 years ago the quality of stuff was just miles better - things were regulated before it was let into a country, tested and had to adhere to standards.

Nowdays that doesnt exist... corruption is the new standard.

Made in Thailand, Taiwan, Korea, Singapore used to be on all the labels - but now they have let China undercut them - or perhaps the Chinese are just better workers, less lazy and more drive?

Well either way - if anything to is improve it wont be from China

Have to disagree with you....most of the best known western brands are manufactured in China..Siemens, ABB etc.

The rhetoric you use is the same as that used against the Japanese many years ago, and didn't that turn out to be rubbish.

Have a close look at the PC you are using....fair chance it was made in China...my Toshiba laptop was.

[cmiuc]

of course why not? they can get free money and not have to pay back...

and why is china so intent on building up its military strength every where when they should be working for peace... Cold war coming soon? WWIII?

usually when you build up Military Strength... it means you are seeking world Domination... true? they will have a lot of people to contend with if that happens... and do you think Thailand dares fight for them? Its like WW2 when Japanese overtook Thailand(without a fight) because strength is not in the Thai character... so same will be true when China calls on them to pay up their debt by support... some reneging will be going on... (all SEA countries will be like that)

[MaxLee]

Chinocracy in the making, coming soon,... officially,....

[waza]

While the money is moving China's going to fly.

However, if markets shrink and people stop spending in the face of austerity, who is China selling their manufactured goods to?

China has alot of debt, built on the back of promised growth of exports.

No tickey, no washee

I'm sorry to say that this is a popular misconception.

The Chinese to not manufacture and then sell. They only manufacture on order. The few items that are available online are only surplus supplies of previous orders. They do not and never will outlay a cent of their own.

Thailand on the other hand has prostituted themselves to the Chinese and everyone else with a dollar in their hand.

Bend over baby the Chinese are in town.

It used to be Yankee's doodle but now it is dim sim.

The misconception is yours,

I never mentioned orders or anything like that. I didn't suggest they have manufactured goods lying around unsold.

The fact is China has spent and invested a lot to be in a position to manufacture for the world. But without orders they won't be able to repay the considerable debt they owe.

There is a knock on effect too. Especially for countries like Thailand who rely on the supply of raw materials to China for their main income sources.

Not only is China's public and household debt low, it is the 3rd largest holder of US debt and its foreign exchange holdings now stand at $3.8 trillion, they aren't going to fold any time soon

"But overall, China’s federal level debt remains low,bank’s remain strong despite higher non-performing loans on the balance sheet, and yet we still get a total debt to GDP ratio of a whopping 282%..... McKinsey says local debt is the biggest problem. Central government debt is still low, at around 64% of GDP (and) Household debt in China is very low. Like most Asian societies, Chinese love to save and invest.......The U.S. total debt to GDP, which includes household and corporate debt, is 331.7%. "

"To put China's ownership of U.S. debt in perspective, its holding of $1.2 trillion is even larger than the amount owned by American households."

Edited June 29, 2015 by waza

[englishoak]

While the money is moving China's going to fly.

However, if markets shrink and people stop spending in the face of austerity, who is China selling their manufactured goods to?

China has alot of debt, built on the back of promised growth of exports.

No tickey, no washee

I'm sorry to say that this is a popular misconception.

The Chinese to not manufacture and then sell. They only manufacture on order. The few items that are available online are only surplus supplies of previous orders. They do not and never will outlay a cent of their own.

Thailand on the other hand has prostituted themselves to the Chinese and everyone else with a dollar in their hand.

Bend over baby the Chinese are in town.

It used to be Yankee's doodle but now it is dim sim.

The misconception is yours,

I never mentioned orders or anything like that. I didn't suggest they have manufactured goods lying around unsold.

The fact is China has spent and invested a lot to be in a position to manufacture for the world. But without orders they won't be able to repay the considerable debt they owe.

There is a knock on effect too. Especially for countries like Thailand who rely on the supply of raw materials to China for their main income sources.

Not only is China's public and household debt low, it is the 3rd largest holder of US debt and its foreign exchange holdings now stand at $3.8 trillion, they aren't going to fold any time soon

"But overall, China’s federal level debt remains low,bank’s remain strong despite higher non-performing loans on the balance sheet, and yet we still get a total debt to GDP ratio of a whopping 282%..... McKinsey says local debt is the biggest problem. Central government debt is still low, at around 64% of GDP (and) Household debt in China is very low. Like most Asian societies, Chinese love to save and invest.......The U.S. total debt to GDP, which includes household and corporate debt, is 331.7%. "

"To put China's ownership of U.S. debt in perspective, its holding of $1.2 trillion is even larger than the amount owned by American households."

We shall see, Chinas shadow banking debts are apparently enormous, very precarious and nearly all local debt.

One things for sure Thailand is going to be nothing more than an observer and probably end up a backwater for Chinese tours.

[Thai at Heart]

While the money is moving China's going to fly.

However, if markets shrink and people stop spending in the face of austerity, who is China selling their manufactured goods to?

China has alot of debt, built on the back of promised growth of exports.

No tickey, no washee

I'm sorry to say that this is a popular misconception.

The Chinese to not manufacture and then sell. They only manufacture on order. The few items that are available online are only surplus supplies of previous orders. They do not and never will outlay a cent of their own.

Thailand on the other hand has prostituted themselves to the Chinese and everyone else with a dollar in their hand.

Bend over baby the Chinese are in town.

It used to be Yankee's doodle but now it is dim sim.

The misconception is yours,

I never mentioned orders or anything like that. I didn't suggest they have manufactured goods lying around unsold.

The fact is China has spent and invested a lot to be in a position to manufacture for the world. But without orders they won't be able to repay the considerable debt they owe.

There is a knock on effect too. Especially for countries like Thailand who rely on the supply of raw materials to China for their main income sources.

Not only is China's public and household debt low, it is the 3rd largest holder of US debt and its foreign exchange holdings now stand at $3.8 trillion, they aren't going to fold any time soon

"But overall, China’s federal level debt remains low,bank’s remain strong despite higher non-performing loans on the balance sheet, and yet we still get a total debt to GDP ratio of a whopping 282%..... McKinsey says local debt is the biggest problem. Central government debt is still low, at around 64% of GDP (and) Household debt in China is very low. Like most Asian societies, Chinese love to save and invest.......The U.S. total debt to GDP, which includes household and corporate debt, is 331.7%. "

"To put China's ownership of U.S. debt in perspective, its holding of $1.2 trillion is even larger than the amount owned by American households."

We shall see, Chinas shadow banking debts are apparently enormous, very precarious and nearly all local debt.

One things for sure Thailand is going to be nothing more than an observer and probably end up a backwater for Chinese tours.

Every large economy has debt levels which are on the margin of manageable as long as all things stay equal.

But none are invulnerable . the Chinese cannot break the USA because they break themselves. Same with the USA not being able to break the Chinese. It is an immaculate stand off