Following Thailands May 2014 military coup, relations with the United States soured, while those with China improved considerably. This was yet another case of Chinas no strings attached policy, combined with the prospect of significant economic and financial investment, altering the geopolitical alignments of a developing country.
Although China surpassed Japan in 2012 as Thailands largest all-around trading partner, Japan remains the leading investor in Thailand and the U.S. the most important provider of military equipment, technology, training and support even under present limitations. Nevertheless, Thai officials have jointly pursued ever-greater Chinese investment (which Beijing has pushed for as well) in high-tech industries, including the automotive industry, electronics, biofuels, petrochemicals and, importantly, transportation.
For a mix of these economic and geopolitical reasons, Beijings influence in the country appears to be on the rise. Thailand is reportedly now holding more high-level bilateral meetings with China than any other country. The two countries have carried out a string of more ambitious joint military exercises, including the first joint air force exercises earlier this year. And, in May 2016, Thailand expressed its support for Chinas position that territorial disputes in the South China Sea should be solved via bilateral not multilateral negotiations.
Observers have even noted a concerning number of recent incidents where political dissidents and Chinese citizens seeking refugee status in Thailand have been repatriated or even disappeared, likely turned over to Beijing in deference to the growing bilateral relationship.
Unlike in other cases, however, this transition toward Beijing and away from the U.S. has apparently been driven less by the dangling of easy money and massive investment deals as has been the case, for example, with Cambodia, Burma, Democratic Republic of Congo and other countries plucked from the arms of foreign donors by Chinese economic and financial strategies and more by the geopolitical instincts of Thai leadership to shore up the countrys position with the big powers after U.S. rebuke of the military coup.
In other words, Thailand has shown some signs that its new relationship with China is not, necessarily, based on economic desperation. It has pushed back against investment offers that are viewed as one-sided (e.g., the China-Laos-Thailand high-speed rail project) and shown, via its relationship with Japan, that it has other options in the economic and financial domain.
That said, there is still considerable risk that Chinas efforts to establish tighter relations and greater levels of investment over time (including in strategically significant sectors, like transportation) will ultimately influence the countrys calculations with regard to Chinese power projection in the region. The prospect of AIIB funding, for example, to help the country reach its lofty investment goals and other economic and financial strategies could yet lure Thailand into Beijings strategic vision for the region focused on Chinese-friendly infrastructure and transportation projects.
Excerpted Deals and Transactions:
- In July 2014, several months after taking power, the Thai military government announced a $75 billion master plan to upgrade the countrys transportation infrastructure. China has targeted Thailands transportation sector especially as an area for joint collaboration, as it has in other Southeast Asian states. Thailand has a critical role to play as a regional hub in Chinas efforts to connect its markets overland with those of other ASEAN countries (i.e., Burma, Malaysia, etc.), including their ports along the Gulf of Thailand, the Andaman Sea (and out to the Indian Ocean) and the Malaccan Strait. Chinas motivations, however, are not purely commercial.
- One of the most ambitious infrastructure projects being discussed in Thailand is the Kunming-Bangkok standard-gauge high-speed railway, to serve ultimately as one part of Chinas vision for a Pan Asian HighSpeed Railway Network (ultimately linking Kunming in Southern China to Singapore over nearly 3,000 km away). For China, the motivation is to link southern China with Thailands industrial eastern coast, deepsea ports and to Bangkok and potentially even create a highvolume pathway from Bangkok out to the Andaman Sea and Indian Ocean (again, circumventing the Malacca Strait). Thailand also provides the only land bridge to Singapore. Negotiations between China and Thailand, however, have recently been derailed.
- Thai military signed an agreement with NORINCO to purchase twenty-eight MBT-3000, Model VT4 main battle tanks, for $150 million and establish a dedicated service facility in Thailand
- Chinese companies have been pushing the planned Kra Canal project, which would cut 30 miles through southern Thailands Kra Isthmus, linking the Andaman Sea with the South China Sea. It would allow ships to avoid the Strait of Malacca, a continuing Chinese strategic fixation
- Huawei opened a $12 million Southeast Asia regional headquarters in Bangkok; Thailand is the companys largest market in in the region.