Thailand and China have agreed to further boost economic ties during a high-level visit by Chinese Premier Wen Jiaboa to Bangkok. Analysts say the visit, following soon after that of U.S. President Barack Obama, highlights increased interest in Southeast Asia’s positive economic outlook.
Talks between Wen and Thai Prime Minister Yingluck Shinawatra on Wednesday were intended to build on a major trading agreement between China and Thailand, announced in April this year.
Under the pact set out for five years, the governments agree to ambitious targets to expand trade and investment, as well as tourism, aiming to raise bilateral trade up to 15 percent a year.
Wen focuses on Thailand
In an address to reporters, Wen said China sees Thailand as an important trading partner. He said both nations agreed to implement the five-year plan on development and trade with a strengthening of cooperation and mutual investment in agriculture, and projects linked to traffic management, water resources and infrastructure.
Yingluck also supported the calls for greater cooperation in the agricultural sector. She said the Chinese government is interested in buying agricultural produce, especially rice.
During the talks, China agreed to purchase more rice from Thailand, both at a state and private-sector level.
Reports this week said Thailand had hoped to sell up to 5 million metric tons of rice to China in a bid to reduce rice stocks that the government has accumulated under a controversial rice pledging program that sets government buying rates above the international market.
US emphasizes Asia-Pacific
China’s purchases of Thai rice have fallen by more than 50 percent this year, since the program was introduced. At the meeting Thursday, China agreed to buy 260,000 tons of rice.
The agreement Thursday follows just days after Obama visited during a trip to promote Washington’s increased focus on trade and diplomacy in the Asia-Pacific.
The United States renewed a long-standing security pact with Thailand and a U.S.-sponsored Trans Pacific Partnership (TPP), largely a free trade area between the U.S. and Asia-Pacific countries.
Somphob Manarangsan, a professor of economics, said the recent visits of the senior leaders from both countries stand in contrast, as China has strong economic ties to the region, while the United States’ key strength has been in security areas, but weaker in economic ties.
“You can see that when President Obama came to this area [the U.S.] try to sell the idea of the TPP - that means to have this improvement of the economic cooperation by the USA with countries of this area," said Manarangsan. "But Mr. Wen Jiabao - they try to use some cultural factor, education, social, like the opening up of the Chinese cultural centers here in Thailand using the soft power to deal more and more with this area.”
Somphob said that although countries like Thailand so far have been able to strike a balance between Beijing and Washington, that may become harder in the near future as trade, business and investments increase.