Geopolitical Report ISSN 2785-2598 Volume 36 Issue 5
Author: Riccardo Rossi
As the People’s Republic of China and Thailand strengthen their military and economic ties, a significant shift in regional dynamics is evident, underscoring Beijing’s strategic ambitions in the Asia-Pacific region.
This growing collaboration seems to be a deliberate effort by China to counterbalance the influence of the United States and position itself as a dominant player in the region. The multifaceted partnership spans geopolitics, economy, and military cooperation, reflecting a comprehensive strategy employed by Beijing.
This report delves into the intricate details of the China-Thailand collaboration, aiming to dissect the implications of their alliance and shed light on potential future strategies that China may employ to solidify its position in the Thai market. The evolving dynamics between these two nations hold implications not only for their bilateral relations but also for the broader geopolitical landscape in the Asia-Pacific region.
Information Background
On October 19th, 2023, Prime Minister Srettha Thavisin of Thailand travelled to the People’s Republic of China (PRC) to attend the third Belt and Road Forum for International Cooperation (BRF).
Xi Jinping took the opportunity to reaffirm Bangkok’s geo-economic importance in the 21st Century Maritime Silk Road and the centrality of the Strait of Malacca for the Sea Lines of Communications (SLOc) crossing the South China Sea (SCS) waters.
From these considerations, the analysis aims to understand what the PRC’s interests are in Thailand.
Geopolitical scenario
The People’s Republic of China focuses most of its attention on the Southwest Asia-Pacific region, particularly on a narrow area of the South China Sea (SCS) and South-East Asian states: Vietnam, Indonesia, and Thailand.
An initial explanation for Beijing’s increasing diplomatic pressure on Bangkok can be traced back to the country’s geography, which can be summarised in two main points:
- The adjacency of the Thai coast to the Strait of Malacca, an obligatory passage of the South China Sea connecting the main Chinese ports to European and Middle Eastern markets.
- The transboundary rivers Mekong and Salween, originating in Tibet but flowing through Thailand, affecting part of the nation’s rural economy.
Beijing considers these characteristics of Thailand to be of great strategic importance, influencing the Xi Jinping presidency in setting policies for the Southwest Asia-Pacific region, including:
- Foreign Direct Investment (FDI), essential for increasing the presence of Chinese multinationals in certain countries, exploiting natural resources, and developing an infrastructure network. This aligns with the concept of Debt Trap Diplomacy:
“China’s debt trap diplomacy called the Belt and Road Initiative is a ploy for them to procure political and economic ascendency by exploiting the poorer countries, which in turn could help them attain influence and control all over the world as the possible global hegemony in the future“.
Chinese investment policy in Burma, aimed at the construction of the China-Myanmar Economic Corridor (CMEC) to connect the Chinese city of Kunming to the sea trade routes via the Bay of Bengal, has confirmed the idea that the Belt and Road Initiative might substantially support the Debt Trap Diplomacy. - Opposition to the US military presence in the vicinity of the first island chain, aiming to prevent the U.S. Navy from exercising sea control in the Malacca Straits, Luzon, and Taiwan, denying China access to the Indian and Pacific Oceans.
Economic Scenario
Beijing’s ability to increase its economic influence in Thailand was fostered by the military regime’s industrial-military choices (2014-2019), including the approval of the Thailand 4.0 program aimed at introducing the 4.0 production model in the country. Bangkok identified ten strategic industries, including automotive, electronics, tourism, medical, agriculture, and biotechnology.
In addition to Thailand 4.0, in 2017, Thailand unveiled the Eastern Economic Corridor special development zone (EEC), a $46.5 billion project that earmarked an area of 13,000 square kilometres close to the capital as a high-tech industrial hub. The EEC attracted substantial foreign capital, including investments from the Rising Sun, Singapore, Hong Kong, and the People’s Republic of China.
While Thailand has enjoyed success with the EEC, it has also faced infrastructure shortages, leading to plans for major construction works, such as ports, airports, and high-speed railway lines. Notably, Laem Chabang and Map Ta Phut Industrial Deep Seaport are undergoing modernization to increase capacity and accommodate large cargo ships7.
The People’s Republic of China recognises the geo-economic importance of the Nong Khai-Bangkok railway line and the Thai port infrastructure, similar to the China-Myanmar Economic Corridor, as an attempt to address the Malacca Dilemma. Since 2014, China has increased its presence in Thailand’s economy, becoming Bangkok’s main trading partner, with bilateral trade reaching 3.69 trillion baht ($107 billion) in 2022.
Military scenario
Since 1980, the People’s Republic of China has supported a rearmament and training programme of the Royal Thai Army (RTA) structured in four main phases:
- Phase One (1980s): China transferred tanks, armoured personnel carriers, and rocket launchers to Thailand at “friendship prices.” Aimed at reinforcing the Royal Thai Army during its confrontation with Vietnam, which had occupied neighbouring Cambodia.
- Phase Two (1990s): Thailand took delivery of six Chinese-made frigates. Subsequently outfitted these frigates with Western communications and weapons systems.
- Phase Three (2000s): Bangkok ordered two Thai-designed offshore patrol boats from China. Additionally procured multiple rocket launch systems to enhance naval capabilities.
- Phase Four (Since 2014): Marked by the 2014 coup, triggering the need for alternatives due to the US arms embargo. Thailand initiated efforts to diversify its sources for military equipment and supplies.
Beijing these four phases as an opportunity to increase its influence in Thailand, taking advantage of a twofold favourable condition. On the one hand, the US decision to deny the military junta USD 4.7 million in military funding, of which USD 3.5 million was for the purchase of equipment and services and the remaining USD 1.3 million for the International Military Education and Training (IMET) programme.
In addition to the cancellation of the loans, Washington reduced its deployment in the Cobra Gold military manoeuvre, first carried out in 2002. The 2013 edition, prior to the military coup, had 9,500 US military personnel; from 2014 to 2017, US personnel had dropped to 3,600.
As a second favourable condition, Beijing saw the dictatorship’s willingness to modernise the army as an opportunity to increase the Royal Thai Army’s dependence on China.
Beijing in 2015 concluded a 1.3 billion deal with Bangkok for the supply of three conventional S-26T submarines, including the training of soldiers and a 10-year ‘guarantee’. Thailand, in 2018, had made a down payment of 410 million for the construction of the first boat, which was then suspended in October 2023 by Defence Minister Sutin Klungsang, at the same time accepting the Royal Thai Navy’s willingness to purchase a Chinese frigate using the funds earmarked for the S-26T.
Beijing, in addition to the order of the three submarines, sold 48 VT4 tanks to the Thai army from 2016 to 2018 for a total of USD 280 million. Bangkok, to date, is the only country to use the Chinese tank.
Since 2005, the People’s Liberation Army (PLA) and the Royal Thai Army have been organising regular military manoeuvres, which have underlined the Chinese rising role in the region and supported Xi Jinping’s popularity in the nation’s domestic politics.
Of particular importance was the ‘Falcon Strike’ exercise held in 2016, 2017 and 2018. On one of these occasions, the Royal Thai Air Force (RTAF) operated together with the People’s Liberation Army Air Force (PLAAF), employing Saab JAS 39 Gripens, but not F-16s in accordance with US strategic doctrine. The PLAAF similarly to the RTAF deployed J-11 and J-10 jets instead of the sophisticated Russian SU-30s and SU-35s.
By promoting cyclic exercises with the Royal Thai Army, the People’s Republic of China seeks to foster an interaction between its own armed forces and those of Thailand, while at the same time understanding the functioning of Western equipment in use by the RTA.
On the other side, these exercises are aimed at guarding the main maritime lines of communication, maintaining a presence in the vicinity of the Malacca and Sunda Straits, through which it is possible to control commercial traffic in and out of the waters of the South China Sea.
Conclusions
Beijing sees the deepening of relations with Bangkok as indispensable to increase its economic-diplomatic influence in the South China Sea (SCS) region, counteracting the US Pivot to Asia policy. From this assessment, it is conceivable that the People’s Republic of China will increase FID in the coming years.
With this manoeuvre, Beijing should find itself in a position both to exploit the EEC’s industrial potential more effectively and to have a soft power to influence the management of the Strait of Malacca with greater weight.
This is an issue that the Xi Jinping presidency considers to be of high national interest and is now tackling through a twofold approach. The first is to strengthen the Chinese presence in the northern countries of the South-East Asian region, primarily Burma.
The second mode of intervention involves the strengthening of investments for the creation of economic corridors through the countries of the South East Asian region, such as in Burma.
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