Thailand and China to finalise Bt500-bn medium-speed railway contract in May
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THAI AND CHINESE authorities are expected to finalise a Bt550-billion contract on a medium-speed railway system in May as part of the grand strategy to connect Southeast Asia with China’s “Belt and Road” initiatives, in which more than 60 countries will l
Speaking at a panel discussion hosted by Suthichai Yoon, chief adviser of Nation Multimedia Group, Aksornsri, also a lecturer at Thammasat University, said the “Belt and Road” initiatives would also connect countries in the Pacific Ocean with those in the Indian Ocean based on the ancient Maritime Silk Road.
“The Chinese are building a 507-kilometre railroad extension from the southern city of Kunming to Laos, where another 600km-plus railroad will be built to link with the Thai section of over 800km, which runs from the northeastern province of Nong Khai to Map Ta Phut and Bangkok,” she said.
Because of the strategic importance of Thailand and the rest of Southeast Asia, Chinese authorities have given a high priority to the Thai-Chinese railroad scheme, which has been considered by several Thai cabinets over the past few years.
Last month, the China-led Asian Infrastructure Investment Bank (AIIB) was also officially established to provide financial support for infrastructure schemes in Asian countries.
Thailand and other Asian as well as European countries including the United Kingdom, Germany and France are among the 57 countries that hold shares in the AIIB.
Aksornsri said the “Belt and Road” initiatives and AIIB were “good strategies” that would connect China with Southeast and Central Asia as well as Europe.
Dr Sarasin Viraphol, executive vice president of Charoen Pokphand Group, said the Thai-Chinese railway project’s investment and shareholding structure had been changed back and forth several times in the past years, causing delays to the scheme.
Now, the Thai government prefers China to hold a majority stake in the project to reduce the investment risk. It also has requested a lower interest rate on China’s loans to finance the project.
Dr Sompop Manarungsan, president of Panyapiwat Institute of Management, who has closely followed China’s development, said China was also pursuing a “One Sky-One Cyberspace” initiative.
In a related development, Sarasin said another Chinese strategy was to connect offline businesses with online enterprises using the so-called O-to-O Internet platform. This will allow large Chinese companies to link with small and medium-sized enterprises as well as young entrepreneurs who are mostly in online or e-commerce businesses.
Sarasin told the panel discussion that China was building up a new generation of entrepreneurs along with hundreds of new big cities. The rapid pace of urbanisation is expected to increase the number of big cities to 800 nationwide, up from around 100 a few decades ago.
Urbanisation will allow China to boost domestic consumption at a time when its export sector is facing a growth slowdown. The new normal for growth of China’s gross domestic product is 6-7 per cent per year, down from the previous double-digit growth rates.
Sarasin said China had prepared for a downward economic growth trend after three decades of high growth, so it should be able to cope with the new normal.
Given China’s huge population and domestic market, Sompop shared the same opinion that the growth slowdown was manageable and that China would avoid a hard landing as its services and financial sectors become more prominent.
Thanong Khanthong, executive editor of Nation Group, said China had also boosted its relations with countries in Africa and the Middle East to diversify its export base further and utilise its over-capacity in the manufacturing sector.
