Let’s all board the same train
Thailand is striking a careful balance in its relations with China and Japan, the future of which might rest on high-speed railways
The seven agreements Japan and Thailand signed this week to strengthen ties and boost economic growth represent most welcome news. The pacts cover industrial upgrades, investment in the Eastern Economic Corridor (EEC), human-resource development, and support for small and medium-sized enterprises. What is somewhat disheartening about the deals forged during Japanese Economy, Trade and Industry Minister Hiroshige Seko, though, is that it’s too early to say how much Japanese investors are prepared to spend in Thailand and specifically on the EEC, a pet project of the ruling military junta. It is unknown when we might begin seeing tangible effects on our sluggish economy.
It was smart to invite the Japanese delegation to explore business possibilities here. Tokyo is keen to offset China’s ever-increasing influence in Southeast Asia, knowing that Beijing has been aggressive in pursuing trade and investment here in recent years. The Japanese delegation, 570 strong, arrived less than a week after Prime Minister Prayut Chan-o-cha was in Xiamen, China, for a summit of the BRICS countries – Brazil, Russia, India, China and South America.
Side business at the summit included the signing of Bt3.5 billion worth of design and supervision contracts for the planned Bangkok-Nakhon Ratchasima high-speed railway. Even though it’s tremendously beneficial to Beijing as a leg of the vast Belt and Road Initiative, that project is widely seen as signalling Thailand’s dependency on China. It is China that must handle the main components of the railway’s construction, a fact that forced Prayut to utilise Article 44 of the provisional constitution to waive restrictions on Chinese engineers working here.
Japan, of course, has its own plan to build a high-speed railway for Thailand – linking Bangkok and Chiang Mai – with the first phase, Bangkok to Phitsanulok, scheduled to begin next year. Deputy Prime Minister Somkid Jatusripitak said he asked Seko’s delegation to also consider building a high-speed railway linking Vietnam, Thailand and Myanmar and received an encouraging response. Seko said the details would have to be cemented first before Japanese investors got on board – and Japanese investors are not newcomers to Thailand.
Japan has always had a strong economic presence in Thailand and it’s fair to say our fiscal relationship has always been mutually beneficial. On the other hand China, with its offer to build a railway here, has the undisguised ulterior motive of forging a New Silk Road straddling half the globe and tying together all the termini of its economic and political influence. The Belt and Road system will benefit all of the linked countries, but by far mostly China.
Japan sees Thailand differently – as a cog in its overseas supply chain, yes, but also as the linchpin in its “Thailand Plus” strategy adopted several years ago, by which the Kingdom serves as its regional trading base.
The Thai government should consider that China and Japan are both competing with each other in various fields and are also able to cooperate with one another. Balancing economic power requires different approaches than the balancing of political power, even if the two often overlap.
Rather than having Japan and China competing to construct separate high-speed railways here at roughly the same time, Thailand, with its limited resources, might be better off having them collaborate on a
single project, in which case everyone would indeed share in the mutual benefit.
