China losing, US gaining crucial ground in Thailand

BANGKOK – When Thai Foreign Minister Don Pramudwinai returned one late April evening from a high-level meeting in Anhui, China, the top Thai envoy was greeted at Bangkok’s airport by an unexpected host: Beijing’s ambassador to Thailand Han Zhiqiang.

The diplomatic role reversal, where China’s envoy welcomed the kingdom’s foreign minister on Thai soil, sent what one Thai government insider saw as a clear and strong signal: That Beijing would be watching closely the Thai government’s next moves after Don’s discussions in China.

In Anhui, Chinese Foreign Minister Wang Yi pressed Don for faster progress on a long-slow-moving train project designed to link Thailand to China via Laos, where Beijing recently finished a high-speed line that without Thai connectivity represents a Belt and Road Initiative (BRI) white elephant dead-end in Southeast Asia, the insider said in recounting the talks.

Wang also discouraged Thailand from joining the US-sponsored Indo-Pacific Economic Framework, a then-inchoate trade initiative that has since been formally launched with 13 regional partners as an alternative to China-led pacts and schemes, according to the same Thai government source.

China made significant diplomatic, economic and security inroads into Thailand after military coup-makers led by soldier-cum-politician Prime Minister Prayut Chan-ocha toppled an elected government and installed a junta regime in 2014, a lurch from democracy that sent relations with long-time ally the United States into a tailspin.

Eight years on, though, China has clearly not received all that it has sought, and as Beijing transitions from less soft and more hard diplomacy under ambassador Han, the Thais are overtly looking back to the US – and its regional ally Japan – for new diplomatic balance and choice, according to multiple Thai officials who spoke to Asia Times on condition of anonymity.

The root of Thailand’s emerging disconnect with China is the unbuilt train, which has been on Bangkok’s drawing board for over a decade but beyond a few symbolic shovelfuls to please Beijing has made scant progress in actually connecting to the Lao border.

Thai Prime Minister Prayut Chan-ocha (2nd-R), Wang Xiaotao (3rd-L), deputy director of the National Development and Reform Commission of China, and then-Chinese Ambassador to Thailand Lyu Jian (2nd-L) at a 2017 ceremonial ground-breaking ceremony for the still-unbuilt line. Image: cn.com

Privately, Thai officials say they are concerned the BRI link would balloon the kingdom’s already high and rising trade deficit with China, which has surged by nearly 50% during the pandemic. The officials have also looked on warily as China has taken control of key strategic assets in Laos in debt-equity swap settlement of delinquent train loan payments.

But as Bangkok’s tarrying on the train is by now more clearly unstated policy than mere bureaucratic torpor, some observers, diplomats and officials perceive China’s slow but deliberate “encirclement” of the kingdom in an increasingly hard power play to get its way with the Thais.

Beijing’s pressure points on Thailand’s borders have proliferated as its regional influence has spread. These include not least the string of dams Beijing has built on the Mekong River, an upstream chokehold on water flows that Beijing often applies without forewarning to downstream Thailand, resulting variously in flooding and drought of riparian Thai populations.

Thailand’s National Security Council, meanwhile, has expressed private concerns to certain envoys who spoke to Asia Times about China’s building of physical infrastructure on the Mekong in Laos in the form of riverboat fueling stations, which the council believes Beijing is using as justification for boosting its security patrols closer and closer to Thailand’s river border.

Foreign gunboats are deeply emotive in Thailand, dating back to the colonial era when Britain and France used naval pressure to carve up kingdom lands. Perceptions that China is doing the same to press its wider demands are taking certain hold, seen in Bangkok’s strong resistance to China’s plan to blow up rocky Mekong rapids to allow larger vessels to travel the waterway.

Chinese-run casinos in Lao border areas have also raised Thai antennae, as at least one includes an extra-long runway supposedly for VIP private jet access but that could also be used for military purposes. The casinos are known havens for human, drug and wildlife trafficking, vice that is giving China another cause to up its security presence in the Thai-Lao-Myanmar border area.

The encirclement narrative is rounded out in Cambodia, where China has secured a secretive 25-year access agreement at the Ream Naval Base that opens onto the contested Gulf of Thailand, and neighboring Myanmar, where Beijing has accelerated progress on another BRI-related rail line since last year’s military coup and may or may not have urged its aligned United Wa State Army insurgent group to muscle ever closer to the northern Thai border.

A sense of “encirclement” is closing in on Thailand. Map: Twitter

“I think they have that [encirclement] sense, but whether or not they fully appreciate that circumstance and it’s widely shared in the entire establishment, [I’m] not sure,” said one Bangkok-based senior diplomat who spoke on condition of anonymity. “[But] when you look at it geographically, it looks like an encirclement and Thailand is the odd one out.”

The envoy said Thailand thus looks increasingly like a “democratic oasis” in the region, as China consolidates its sway over neighboring authoritarian regimes in Cambodia, Myanmar and Laos. That’s all raising questions in Bangkok-based diplomatic circles about how far Thailand may be willing to recalibrate its great power diplomacy away from China and towards the US.

Thailand’s renowned “bamboo in the wind” diplomacy, on any well-informed compass, is now perceptibly bending back to the West. That’s particularly apparent on the strategic front.

A pending US-Thai joint vision statement, earlier set to be announced during US Secretary of State Antony Blinken’s Covid-canceled visit to Bangkok in March, would have raised eyebrows in Beijing with its dusted-off reference to the Vietnam War-era 1962 Rusk-Thanat Communiqué, which not only facilitated US modernization of Thailand’s military and infrastructure but also included a guarantee to defend the kingdom against aggressor neighbors.

So, too, would have the recent first-ever US-Thai joint parachute drop exercise wherein 200 troops traveled non-stop from America’s Washington state to Thailand with a refueling in the middle of the Pacific Ocean, a maneuver that at least one envoy familiar with the drill said showed how bilateral interoperability was improving in a South China Sea-like setting.

The true state of US-Thai military ties has been in question ever since Australian academic Greg Raymond published in 2018 a survey of over 1,800 Thai mid-ranking military officers who broadly indicated preference for China over the US – though some have since raised critical questions about the survey’s methodology, including in regard to the possible influence pro-China local research partners may have had on soldier replies and their interpretation.

Fast forward four years, it’s China-Thai military ties that are in doubt with the sinking of a US$1 billion submarine deal that has been hounded by political controversy ever since the previous coup government set it in motion. The deal is on the rocks due to Germany’s recent refusal to deliver to China the sub’s MTU396-type engine because it would be on-sold to a third party, i.e. Thailand. Whether the US pressed the Germans to withhold the technology is unclear.

Diplomats monitoring the development have noted the Thai side’s firm refusal of China’s offer to switch the German engine for a perceived as inferior Chinese-made one. The sub deal’s provision to allow Chinese technicians to set up shop at Sattahip Naval Base had strained US-Thai ties, as the US Navy makes frequent port calls to the base with sometimes sensitive wares that would have been exposed to prying Chinese eyes.

Royal Thai Navy top brass hold a press briefing at the force’s headquarters in Bangkok on August 24, 2020, to defend the purchase of Chinese submarines. Photo: AFP / Apichit Jinakul / Bangkok post

Some now wonder if the Chinese sub deal’s potential cancellation will free up funds to procure instead US-made F-35 stealth fighters. As with the sub deal, the political opposition has gainsaid the air force’s request for eight F-35 trainers, priced at 2.7 billion baht each, included in the 2023 draft budget.

If procured, the jets would significantly improve US-Thai interoperability; reports indicate a US Air Force inspection team will soon assess Thailand’s readiness to operate the fifth-generation jets.

The bigger money question, though, concerns how much Thai policymakers and executives see a role for China in the kingdom’s post-Covid economic recovery. Bilateral trade relations took a certain hit when China closed its border to Thai durian and lychee imports, nominally in the name of Covid prevention but perhaps also coercively for the lack of progress on the train line.

China’s Covid-closed borders and a more inward-looking “dual circulation” economic strategy likely means the waves of Chinese tourists that buoyed Thailand’s pre-pandemic tourism boom, where Chinese arrivals accounted for around 28% of the nearly 40 million tourists who visited the kingdom in 2019, won’t return in similar mass numbers anytime soon, if ever.

Those who sense the bamboo is blowing back in America’s favor note that Thailand’s exports to the US surged during the pandemic, jumping 40% year on year from 2020 to 2021 while netting a $26.6 billion trade surplus, while the kingdom’s deficit with China soared from $20.8 billion in 2020 to $29.8 billion in 2021, rising by nearly 50%.

The same economic observers note that US investment in Thailand still dwarfs China’s, particularly in jobs-creating manufacturing – though Chinese telecom giant Huawei has made big inroads on 5G-related infrastructure, which has contributed to the surging trade deficit in the form of telecom equipment imports that are cheaper than those made by rival Western firms.

Those long-standing and still-strong trade ties with the US likely explain why Thailand defied Wang’s cajoling in Anhui and opted instead to be among the first 13 nations to join the IPEF, which was officially launched by Biden in Japan. Prime Minister Prayut traveled to Tokyo just days later, where he made what some heard as an IPEF-inspired call for more Japanese investment in Thailand’s hopeful and crucial electric vehicle (EV) industry.

If the innately non-confrontational Thais had their diplomatic druthers, the US and China would refrain from jousting for power and influence from inside the kingdom. Outgoing US ambassador Michael Desombre’s outspoken criticism of China’s policies, blasted in a Thai language op-ed critique of China’s maneuvers on the Mekong, rubbed many Thai officials the wrong way.

They have reportedly favored Thai-speaking US chargé d’affairs Michael Heath’s more even-keeled approach, which those familiar with the de facto top envoy’s diplomacy say has focused on rebuilding ties while not pressing the Thais to take geopolitical sides – even as Chinese ambassador Han openly snipes at the US on his embassy’s social media channels.

Chinese Ambassador to Thailand Han Zhiqiang reportedly received his marching orders from President Xi Jinping. Photo: Screengrab / Nation TV

While Han was clearly dispatched to Thailand to make progress on various stalled fronts – whispers say at Chinese President Xi Jinping’s personal behest – the envoy’s tougher tack hasn’t won him many allies or advocates at Thailand’s Ministry of Foreign Affairs.

There, many see his go-go style as pushy, if not tone-deaf, compared to Thai-speaking chargé d’affairs Yang Xin, who served as top envoy for nearly two years while the ambassadorship was curiously left vacant.

But if China is losing and the US winning back Thailand, then Beijing’s vaccine diplomacy is partly to blame. China sought to steal a pandemic march on the US by heavily promoting its Sinovac vaccine at a time when Thailand was for still unclear reasons late in line to procure US-made mRNA vaccines. (Thailand’s China-linked CP Group owns a 15% stake in Sinovac Biotech.)

An eventual US government donation of Pfizer vaccines arguably turned the tide on the kingdom’s lethal Delta wave last August, scoring Washington a public relations coup with its superior medical technology as questions swirl then and now, far and wide around Sinovac’s effectiveness against emergent Covid strains.

While China continues to donate Sinovac supplies, now seemingly more for diplomatic photo ops than actual disease control, Thai medical teams are quietly incinerating the unused stocks as Thais largely eschew Sinovac for Pfizer and Moderna, according to a Thai government source familiar with the burning.

“China sees us as a customer; the US views as a partner,” said another top-level Thai official. “That’s always been the difference.”