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Thailand, China Sign Agreements to Boost Economy

Thailand is looking to China to boost its ailing economy and to draw in Chinese investments, as other sources of foreign funds dwindle. The effort to build China's business profile in Thailand came during Prime Minister Abhisit Vejjajiva's official visit to China.

Prime Minister Abhisit, leading a delegation of more than 100 officials and business people to China, announced business deals worth more than $1 billion. The agreements aim to increase Thai exports industries and to attract Chinese investors.

Mr. Abhisit also held talks with Chinese Premier Wen Jiabao in Beijing during his four-day visit, which ends Saturday.

The agreements involve exports of Thai rice, rubber, tapioca, fruits and jewelry. They are part of Thai Commerce Ministry efforts to expand business networks between the two countries, to counter the pain caused by the global economic slowdown.

Somphob Manarangsan, director of the Chinese Studies Center at Thailand's Chulalongkorn University, says both countries want to boost trade and investment.

"There are quite some prospects for the expansion of economic activity between Thailand and China," said Somphob. "Now the foreign trade of the two countries is just about $37 billion - the two way trade. So I think they try to expand the figure to achieve the $50 billion in the next few years."

Somphob says exports still account for over 60 percent of Thailand's total output. Thai trade with China fell 25 percent to just over $11 billion in the first five months of this year, but Somphob expects the rate of decline to improve in the coming months.

The Thai government recently set out a national investment plan worth more than $40 billion as part of efforts to revive the flagging economy.

The plan includes infrastructure projects, such as an expansion of the rail network. During his visit, Mr. Abhisit met with the chairman of the China Railway Engineering Corporation.

Somphob says many countries like Thailand hope to benefit as Chinese businesses seek investments abroad.

"From now on I think China will seem to boost outward foreign investment particularly in the field of direct investment," he said. "As you know that China has huge amounts of foreign reserves - so they need to go out to particularly to the developing economies."

Thailand also hopes to lure back Chinese tourists, many of whom postponed visits over the past year because of the country's recent political uncertainties.