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Asia News
Thailand, China Sign Agreements on Rail Link, Agriculture
From the Wall Street Journal of Fri, 19 Dec 2014 06:40:00 EST
Thai Prime Minister Gen. Prayuth Chan-ocha.
Thai Prime Minister Gen. Prayuth Chan-ocha. Zuma Press

BANGKOK—Thailand on Friday signed two memorandums of understanding with China on the development of a key rail link project and the purchase of agricultural products.

The two countries are seeking to strengthen their economic ties and firm up relations in general.

The agreements are among the few major bilateral deals secured by Thailand’s military-backed government since it staged a coup on May 22. The U.S. government has cut military aid to Thailand, while the European Commission suspended trade negotiations.

“Thailand doesn’t have a lot of choices,” said Kornphanat Tungkeunkunt, a history lecturer at Thammasat University in Bangkok. “It still needs to rely on major economies, while China has been expanding its trade and investment abroad as domestic growth slows.”

China plans to construct two parts of railroads linking northeastern Nong Khai province to Bangkok and the eastern port of Map Ta Phut starting in 2016, according to the Thai government. The north-south rail link, covering 870 kilometers (544 miles), is expected to facilitate the transport of goods from China’s southern region to Gulf of Thailand ports via Laos.

The project is valued at around 400 billion baht or $12.2 billion, the Thai government has said.

China has already been in discussions with Laos, a landlocked country, to build new railroads.

The rail infrastructure plan is part of a set of multibillion-dollar projects by the military-backed government to upgrade the country’s roads, rails and ports over the next decade. Similar projects were proposed by the previous government but they failed to get off the ground after a Thai court ruled against the government’s funding plan.

China has also promised to purchase about 2 million metric tons of rice and some 200,000 tons of rubber. The large purchase is expected provide the Thai government a much-needed channel to offload its rice and rubber stockpiles it inherited from the previous administration’s subsidy programs.

Thai Prime Minister Gen. Prayuth Chan-ocha presided over the signing ceremony with Chinese Premier Li Keqiang , who is also to attend a two-day Greater Mekong Subregion Summit in the Thai capital. Gen. Prayuth is expected to visit Beijing next week at the invitation of Mr. Li.

In 2013, China overtook over Japan as Thailand’s top trade partner, accounting for about 14% of the total trade this year.

Write to Warangkana Chomchuen at warangkana.chomchuen@wsj.com



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