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On Mekong River, Worries About Surging Trade With China

China's rapid economic expansion in Southeast Asia has led to increasing reliance on the Mekong River for trade. Dams and new ports are expected to help trade in the coming years, but not everyone is welcoming the development.

The Mekong River since ancient times has served as a major transport route. Now, with modern ships and new ports, the river is becoming a key part of China’s rapid economic expansion.

Since 2004, annual cargo volumes have tripled between Thai and Chinese ports - to about 300,000 tons, partly a result of a 2003 Free Trade Agreement between China and its ASEAN neighbors.

The booming trade is also due in part to a special “Early Harvest program” between Thailand and China, that charges no tariffs on more than 100 farm products. Local vendors are not happy with the increased competition.

“The Chinese produce is cheaper than Thai products so it impacts the Thai farmers -- they cannot sell their own vegetables,” says San Ang Somalin, a local Thai vendor.

Many here feel the tariff system is tilted against them. China’s stricter food hygiene controls and a goods and services tax cut into profits for Thai exporters.

But the one of the biggest complaints is the transportation network itself.

“All the boats belong to the Chinese and they control the shipping costs and any extra expenses," says Saya Khamneund, an economist who studies the impact of dams on river communities. "And because the Chinese have built many dams upstream, they can control the water level so more boats from China can export more produce downstream.”

In the Thai border town of Chiang Saen, signs of the changing demographics are hard to miss. At local markets, imported Chinese produce sells quickly as buyers scoop up bargains. But many here still support home-grown producers.

“Thais prefer to eat their own crops such as chili and other vegetables," vendor Somalin said. "So the Chinese produce ends up being shipped to Bangkok.”

Despite the local grumbling, Chinese imports are poised to increase with a newly opened second commercial port.

“The main reason we built the new port was because in the future they will have more produce from China," said Weera Jinnikorn, manager of the Chiang Saen port. "The old Chiang Saen port received 300,000 tons per year. That’s the reason the Thai Port authority decided to build a new one that could handle up to six million tons per year.”
While trade steams ahead, Thai critics of the deal worry that unless the government steps in, local businesses will suffer as profits head upriver.