Given the drastic changes in international political and economic conditions in recent years, the implementation of the free trade zone strategy has become an important part of China’s new foreign policy opening. Currently, China and the Association of Southeast Asian Nations (ASEAN) Free Trade Area (CAFTA) have signed and implemented 14 free trade agreements involving 22 countries and territories.
In 2019, ASEAN (Malaysia, Indonesia, Thailand, Thailand, Philippines, Singapore, Brunei, Vietnam, Laos, Myanmar, Cambodia, Laos, Myanmar, Myanmar, Cambodia) has not only become China’s second largest trading partner, but also China’s largest trading partner in the world. In 2002, the bilateral trade volume was only 54.8 billion dollars, while in 2019 it exceeded 600 billion dollars, showing a significant increase.[1]
China-Thailand bilateral economic relations have developed at an unprecedented pace in the history of economic exchanges between the two countries following the signing of CAFTA. Three agreements signed in conjunction with CAFTA have been the driving force behind the development of the two countries’ economic exchanges. These agreements include the Trade in Goods Agreements, the Trade in Services Agreement and the ASEAN-China Investment Agreement. These were signed in 2004, 2007 and 2009 respectively.[2] Thailand has been one of the most active beneficiaries of CAFTA among other ASEAN member countries. Since the 2006 coup, despite political instability, the Thai government has signed an agreement with Beijing on accelerated tariff elimination under the harvest program, in addition to CAFTA’s normal tariff reduction program.
China’s growing economic contacts with Thailand are gaining momentum due to various factors, such as supportive measures by the governments. The two governments have set clear policies to strengthen mutual ties and have held joint meetings with high-level trade representatives. Trade exhibitions for Thai products have also been organized in many Chinese cities. The signing of the Second Five-Year Joint Action Plan on Thai-Chinese Strategic Cooperation for 2012-2016, the Memorandum of Understanding (MOU) on Agricultural Trade Cooperation and the Five-Year Development Plan for 2012-2016 took place during Thai Prime Minister Yingluck Shinawatra’s visit to China from April 17-19, 2012. These agreements have been a driving force in the economic growth of the two countries.[3]
The mutual investments of both countries are increasing rapidly. In particular, the increasing flow of investment from China to Thailand has led to a two-way investment pattern. In addition, other forms of economic cooperation, such as tourist cooperation, trade in services and financial cooperation, have played an important role for China-Thailand bilateral economic growth and development.
Chinese Foreign Minister Wang Yi said on Sunday, January 28, 2024 that China and Thailand are preparing to officially launch a “visa-free period” as of March 1, 2024. Speaking at a joint press conference after the annual consultations with Thai Deputy Prime Minister and Foreign Minister Parnpree Bahiddha-Nukara, Wang stressed that this agreement will take bilateral relations to a new level, noting that Thailand has always been a priority in China’s diplomacy with neighboring countries. At the same time, Wang commended Thailand’s firm adherence to the “One China” principle and its active support for the Global Development Initiative, the Global Security Initiative and the Global Civilization Initiative.[4]
As Belt and Road Initiative (BRI) cooperation is developing, China is also focused on strengthening its relations with ASEAN in the areas of economy, trade and investment. In this context, the flexibility in visa requirements is an important step for the 50th anniversary of China-Thailand diplomatic relations. ASEAN is an important route for the New Silk Road. The main objective of China’s efforts towards Southeast Asia is to increase cooperation and interaction in the areas of human resources, industries, investments, education and culture.
In economic and trade terms, Thailand is considered China’s third most important trading partner after Malaysia and Singapore, and Thailand is an important region in the development of BRI. China has used the Asian Infrastructure Investment Bank to provide financial support to Thailand. This support is aimed at improving regional transportation links and enhancing Thailand’s geopolitical importance.[5] China and Thailand are also strengthening their economic and trade relations through high-speed railway projects.[6] These projects aim to boost regional transportation as well as promote social and economic development. China also plans to cooperate with Thailand in cultural exchanges and tourism in 2024.
As a result, economic growth and the trend of foreign direct investment expansion into China and ASEAN countries make it imperative for Thailand to accelerate connectivity and infrastructure development. These steps aim to support the economic development of the country and the region. The visa-free access between the two countries can be interpreted as a step to support the ‘cultural deepening’ promised by China in the context of the BRI. China’s strategies, especially the BRI promoted through the Southeast Asia region, will directly and indirectly benefit ASEAN countries by promoting cooperation between China and ASEAN in various fields such as transportation, trade, investment, energy and regional cooperation. Thailand has a central role in this cooperation due to its geographical advantages. Moreover, the fact that Thailand is a site of strategic competition between new and old world powers requires a careful approach.
[1] Yaoshan Ma ve Miao Ping. “Does China’s CAFTA strategy threaten or promote the development of high-tech industries in ASEAN countries?”, Applied Economics Letters 31, no. 1 (2024): 40-45.
[2] Shen Hongfang. “The economic relations between China and Thailand under the context of CAFTA: an assessment.” Chinese Studies 2, no. 01 (2013): 52.
[3] Aynı yer.
[4] “China, Thailand to enter ‘visa-free era,’ says Chinese FM”, CGTN, https://news.cgtn.com/news/2024-01-28/China-Thailand-sign-mutual-visa-exemption-agreement-1qG7JZ3wEcE/p.html, (Date of Accessed: 28.01.2024).
[5] Piratorn Punyaratabandhu ve Swaspitchayaskun Jiranuwat. “The political economy of China–Thailand development under the one belt one road initiative: Challenges and opportunities.” The Chinese Economy 51, no. 4 (2018): 333-341.
[6] “Thailand’s High-Speed Railway: On the Fast Track to Ties With China, But at What Cost?”, The Diplomat, https://thediplomat.com/2023/11/thailands-high-speed-railway-on-the-fast-track-to-ties-with-china-but-at-what-cost/, (Date of Accessed: 28.01.2024).
