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Barun Roy: A Thai hub for China

China is aiming to centre its trade activities in south-east Asia on Bangkok, where all its rail and roads links will come together

Barun Roy  |  New Delhi 

One of the first things the newly-elected Thai government of Yingluck Shinawatra will have to decide on is the fate of a major high-speed railway that Shinawatra’s predecessor had proposed to build and China had offered to support. A memorandum of agreement (MoA) would have been signed and sealed by now, had the elections not intervened. In the changed circumstances, Beijing wants to know if the new rulers in Bangkok are still game.

And it’s more than likely that they would be, since high-speeding Thailand’s railways, a growing demand of the business community, had a prominent place in their election campaign. It’s equally likely that China would want to play along, since the proposed railway would help realise one of its pet ambitions: a bullet railway connecting Beijing and Singapore and bringing China and south-east Asia closer together.

The Thai proposal is for a 640-km high-speed link between the north-eastern town of Nong Khai, on the Laotian border, and Bangkok, with trains running at 250 km per hour. According to a draft MoA, submitted to the Chinese last April, a 51-49 per cent joint venture would run the railway for 30 years, with automatic renewal for another 20. Work would be completed by 2016.

China has also shown great interest in three other Thai high-speed proposals: Bangkok to Rayong to the east; Bangkok to Padang Besar to the south, on the Malaysian border; and Bangkok to Chiang Mai to the north. Most Thais are keen that these projects go through to boost industry, trade and tourism, and private interests from Japan and South Korea are also willing to get involved. As of now, Bangkok-Chiang Mai is said to be the most promising and a contract could be signed either by early next year.

If the Nong Khai-Bangkok high-speed gets going, the Beijing-to-Singapore dream would be closer to reality. It’s like this. Beijing to Shanghai is already connected by a 300-km-per-hour railway, while a high-speed connection from Shanghai to Kunming – in China’s Yunnan province that borders Myanmar, Laos and Vietnam – is under construction and expected to be ready by 2015. From Kunming, an extension is to join up with a $7 billion high-speed that China is helping Laos to build from its border town of Boten to its capital, Vientiane. A groundbreaking ceremony for the Laotian section was to have been held in April but was postponed in the wake of Beijing’s sacking of its railway minister, Liu Zhijun, last February on corruption charges.

From Vientiane, it’s only 25 km to Nong Khai, where the Thai corridor would start its journey south to Bangkok and on to Padang Besar on the Malaysian border, from where a Malaysian link to Singapore, through Kuala Lumpur, already exists and is being upgraded. Once this 3,900-km-long connection gets into place, bringing Kunming within 12 hours or so of Singapore, the entire business scenario in south-east Asia will take a dramatic new turn.

Even as China is developing Kunming as its major south-east Asian gateway, it has another link in mind to widen its coverage of the region. Last January, plans were announced for a second high-speed railway corridor between China and Singapore, running from Nanning – capital of Yunnan’s next-door neighbour, Guangxi – through Hanoi, Vientiane, Phnom Penh, Bangkok, and Kuala Lumpur. Construction of the Guangxi section is due to begin later this year, with a five-year target to finish the entire route.

At the same time, work has begun on a 1,920 km. high-speed line from Kunming to Myanmar’s capital, Yangon, with a connection to Myanmar’s deep-sea port of Kyaukphyu on the Bay of Bengal, being built with Chinese assistance. The railway will follow the route of the proposed Kunming-to-Kyaukphyu natural gas pipeline, which has just gone under construction, entering Myanmar through the border town of Muse.

If things turn out as planned, Yunnan will, in the next ten years, emerge as China’s export processing zone for south-east Asia, and Bangkok will be the hub where all Chinese links to the region, both road and rail, will come together. That’s why the Bangkok connection is important to China (as it is to Thailand, which seeks Chinese business as much as Chinese tourists). It’s also why Beijing has picked Bangkok as the site of a planned $1.5 billion wholesale trade centre for Chinese goods, as big as 100 football fields put together. To be ready by 2013, the centre will allow Chinese products to be re-exported without paying any levies.

China’s trade with south-east Asia is expected to reach around $300 billion this year. Its trade with the Greater Mekong sub-region alone is likely to hit $150 billion by 2015. Kunming is the point through which much of this business will be done in future, up and down highways that are growing nicely and high-speed railways that would soon be in place.  

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First Published: Thu, July 28 2011. 00:34 IST