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During the official visit in December 2011, Chinese Vice Premier, Xi Jinping met the Thai Prime Minister Yingluck Sinawatra. The three day visit was aimed at cementing the traditional friendship and promoting pragmatic cooperation. This begs few questions: What did China and Thailand achieve out of this high level visit? Why did the visit take place now and what will be the future trajectory in China-Thailand relations?

China and Thailand enjoy a long standing relationship over thirty six years. Their relationship in the past has testified that China-Thailand ties serve as a model for peaceful co-existence, mutually beneficial cooperation and common development. This visit was a major diplomatic initiative strengthening the bilateral ties and has opened a new chapter in their traditional friendship. During the visit the two nations signed a numerous documents on strengthening cooperation in trade, justice, disaster management and other areas. Thailand became the first country among ASEAN to sign a Plan of Action for the twenty-first century with China, to establish strategic cooperative relations with China and to sign a zero tariff agreement on trading vegetables and fruits.  

This visit is significant for Thailand because the Chinese Vice President placed a four point proposal to promote China-Thailand relations, emphasizing the need to elevate their strategic cooperation to a higher level, enhance high level exchanges, add impetus to the growth of bilateral ties and to deepen their cultural exchanges.

The most important was the currency swap deal between the Bank of Thailand and the People’s Bank of China, worth 70 billion RMB to strengthen trade and investment. This agreement will permit Thai and Chinese exporters to settle their trade deals in their own currencies, thus decreasing the influence of US dollar in their trade. This agreement will last for three years and will be extended by mutual consent.

Chinese Vice Premier expressed the will to explore ways to achieve which was aimed an aggregate trade of US$100 billion by 2015. The trade volume between China and Thailand has grown to US$52.95 billion in 2010. China has become Thailand’s second largest trading partner, the biggest market, and the second largest import source. The trade between the two countries is carried out through the Mekong River and it was reiterated from the Thai side to jointly maintain safety on the Mekong River.

Another important MoU was related to the infrastructure development - the development of a high speed train system on the Bangkok Chiang Mai route, linking with Lao PDR and other countries in the ASEAN region. Xi Jinping also emphasized that China is keen to foster close coordination with Thailand to facilitate progress in East Asian Cooperation.

The visit has boosted Sino-Thai relations, the Thai Prime Minister highlighted that “Thailand and China are as intimate as relatives” and agreed on developing bilateral relations on cooperation in East Asia. It was particularly helpful for China for the reason that Thailand will become the coordinating country for China ASEAN relations in 2012. This will add impetus to China’s over all relations in the ASEAN region. Also, Thailand is the only country in ASEAN that does not have any overlapping territorial claims with China in the region. Thai PM re-emphasized Thailand’s support to One-China Policy on Taiwan and Tibet and was appreciative of the assistance given by China during the severe floods.

There are cultural linkages between the two countries; it has over 9.5 million Chinese staying for five generations or more. There are many Confucius institutes in Thailand and Chinese culture and traditional is highly regarded and celebrated in Thailand. Beijing is trying to cement its relations with Thailand using its hard and soft power. Thailand is particularly important for China because it is home to the Thai Canal (formerly known as Kra Canal-it connects the Malay Peninsula with the Asian mainland and is popularly known as the “Devil Neck”). The Thai Canal is a proposed canal from the Indian Ocean to the South China Sea via Southern Thailand and also a potential alternative route to the Strait of Malacca to secure Chinese energy supply from the Middle East. Hence, it can be gleaned that China is using its economic clout to make Thailand its strongest ally in Southeast Asia.