China rice deal takes root

A rice deal signed during Chinese Prime Minister Wen Jiabao’s official visit has already taken effect with the Chinese private sector buying hundreds of thousands of tonnes of rice worth some Bt6.24 billion from Thailand, helping relieve the domestic political and market pressure on the government.
Prime Minister Yingluck Shinawatra and Premier Wen yesterday witnessed the signing of a memorandum of understanding on the rice deal, which would facilitate rice trade between the two countries.
The MoU was not a government-to-government contract as widely understood, but an inter-government instrument to boost rice trade, a senior official said. Yesterday’s purchases of rice totalled 260,000 tonnes of polished rice seeds.
The MoU says both sides will develop rice trading for the benefit of good relations and mutual benefit. Both parties will cooperate on the basis of transparency, justice and fairness between their rice-trading agencies.
The two governments will support proper management of rice trading in accordance with market principles, according to the government document released after yesterday’s Cabinet meeting.
Under the MoU, the Chinese government will support the Chinese private sector’s rice trading with Thailand, according to the Foreign Ministry’s East Asia Department director-general Damrong Kraikruan.
The rice deal with China was the most watched agenda item during Premier Wen’s visit, as the government was under political pressure after accusations from the Opposition and academics that its rice price-pledging policy had damaged the domestic market and had caused a decline in Thai rice trading.
The Opposition Democrat Party plans a censure motion debate in the House of Representatives next week against the government on the rice-policy issue.
However the rice deal was just part of the discussions during the visit of Premier Wen. The two leaders also witnessed the signing of three more pacts on cooperation between the foreign ministries of the two nations – on the transfer of prisoners and education cooperation.
The two leaders also considered cooperation on many other farm products, including tapioca, rubber and fruit, Yingluck said.
Thailand wanted to increase Chinese investment by 15 per cent annually, she said, adding that the various sectors open for Chinese investors included rubber processing, natural plastic, automobile production, infrastructure development for connectivity, the Dawei Special Economic Zone in Myanmar, a high-speed train, water management and flood prevention.
Premier Wen said China would support and cooperate with Thailand in accordance with the five- year plan of economic cooperation, which was signed recently.
The two countries will forge cooperation on infrastructure development, agriculture, investment and Mekong development schemes, he said.
“Development in Thailand not only brings benefits to the Thai people, but it would be a good condition for relations between Thailand and China,” he said. “It is China’s pleasure to cooperate with Thailand to help each other coordinate on regional affairs, notably to promote relations between China and Asean, for peace and prosperity in the region.”
Wen also praised Yingluck’s policy of giving importance to cultural and education cooperation. The two leaders jointly presided over an official opening of the Chinese Cultural Centre in Bangkok. Yingluck said Thailand would also open a Thai Cultural Centre in China soon.
Yingluck hosted an official lunch for Wen after their meeting at Government House. The Chinese premier later made a courtesy call on Privy Council President Prem Tinsulanonda.
His Majesty the King granted him a Royal audience at Siriraj Hospital before his departure for Beijing.
Wen will step down from office soon after the new set of leaders chosen by the Communist Party Congress take the reins. Yingluck conveyed her regards to the new Chinese leadership led by Xi Jinping and praised outgoing Wen as well as President Hu Jintao for their ability to bring economic success to China and the region.
 
Memorandum of understanding on rice
- Both sides will develop rice trading for the benefit of good relations and mutual benefit.
- Both parties will cooperate on the basis of transparency, justice and fairness between their rice-trading agencies.
- The two governments will support the proper management of rice trading in accordance with market principles.
- The MoU can be amended or revoked with consent of contracting parties.