China could learn from Japan’s vision for mutual benefit in SE Asia

Initial investment by a special purpose vehicle (SPV) set up jointly by the Thai, Japanese and Myanmar governments is estimated at be around Bt55 billion. In following stages, the investment outlay will top Bt300-400 billion, creating a new growth driver for Asean’s East-West economic corridor, which spans Myanmar, Thailand, Cambodia and Vietnam.

Japanese, Thai and other Asean companies will be among the major benefactors of this new development zone in Myanmar’s Dawei area, where a deep-sea port will be built along with industrial estates. The 196-square-kilometre full-scale zone will be linked with Thailand’s Kanchanaburi province via a motorway from Bangkok to the Eastern Seaboard of Rayong and nearby provinces.

In addition, a railroad linkage will be added to further boost the potential of the East-West corridor, allowing goods and services to flow easily from the Andaman Sea in the Indian Ocean to the South China Sea in the Pacific and vice versa.

The Japanese commitment to the Dawei SEZ exemplifies Japan’s long-term vision of this region, a strategic move that China could not afford to play down. On the other hand, Chinese strategists will have to accelerate their move in firmly positioning China’s economic and other interests in the region.

Given this context, the medium-speed railway projects in Thailand and Laos are crucial and it’s time for the Chinese to show more goodwill in moving the projects forward. So far, disagreement exists over the terms and conditions, such as China’s insistence on a higher interest rate than what is acceptable to Thai negotiators, and discord over the overall investment outlay that exceeds Bt500 billion for the route from Bangkok to the northeastern province of Nong Khai.

The Bangkok-Nong Khai railway will be linked with a similar railway project in Laos, where there will be a connection with a rail line from southern China. Previously, Chinese and Lao officials could not cut a deal on this project but later they renewed efforts to push ahead the scheme to extend China’s rail network into mainland Southeast Asia via Laos and Thailand.

The grand vision is to further extend the railway from Thailand to Malaysia and Singapore, as well as to Cambodia and Vietnam. 

To speed up the railway diplomacy, Chinese authorities may need to learn some lessons from Japan’s achievement in Thailand and other Southeast Asian countries.

Over the past three decades, corporate Japan has been quite successful in playing a leading role in promoting economic development in this region with mutual satisfaction. As a new superpower in Asia, China needs to be more accommodating in its economic relations with Southeast Asia and the railway diplomacy in Thailand and Laos needs to serve as the springboard for other cross-border infrastructure and related projects in the region.

In other words, China needs to catch up with Japan in terms of building a long-term vision of prosperity that is mutually acceptable when it comes to turning that vision into reality.