Asia > Eastern Asia > Japan > China and Japan vie for influence with Thai rail projects

Japan: China and Japan vie for influence with Thai rail projects

2015/03/06

The strategic rivalry between Japan and China in Asia is finding expression not only in territorial disputes in the east China sea but as well in plans for railways to criss-cross Thailand and from presently on link the country to a wider Indochina rail network.
Both lines will serve primarily as freight transport systems. The planned Chinese-backed railway will run north-south from Thailand’s major deep seaport in Rayong to the Laos border at Nong Khai, with a separate spur that connects to Bangkok.

The proposed Japanese one would cross Thailand east to west, connecting Bangkok to the border towns nearest to Siem Reap, Cambodia, and Dawei, Myanmar. Dawei is the planned site of a major industrial zone and deep seaport backed by the Japanese, Thai and Myanmar governments.
In addition to these two rail projects, China and Japan have each as well expressed interest in developing additional train lines, inclunding high-speed passenger railways.

The projects reflect additional than the desperate need for modern long-distance trains in Thailand. China and Japan are openly vying for economic influence in South-east Asia, though for different sets of reasons.

As its economy continues to expand, China is accelerating efforts to increase its economic influence in Southeast Asia. The proposed Asian Infrastructure Investment Bank stands as perhaps the majority ambitious example, but China is as well ramping up its use of official development assistance (ODA) projects, historically the domain of wealthy developed nations.

China has as well been eager to support Thailand’s new military government, which came to power with the May 22 coup last year. In addition to the railway development, China has agreed to government-to-government (G2G) purchases of rice and rubber, both commodities that have suffered oversupply and weak prices in the last year. These and other overtures to Thailand are particularly strategic while the suspension of democracy under the junta has strained relations with the US.

Japan, meanwhile, seeks to maintain its long-established economic influence in Southeast Asia. The country remains the leading source of foreign direct investment in the 10-members of the Association of South East Asian Nations (Asean) and increasingly relies on the region as a manufacturing base.
This is most authentic in Thailand, which serves as the majority significant hub for Japanese automobile, industrial, and consumer goods exports in Asia. Indeed, Japan has so much manufacturing in Thailand that in a very direct sense an investment in Thailand’s infrastructure is an investment in Japan’s industrial sector.

The extent of Japan’s reliance on Thailand as its Southeast Asian manufacturing bulwark hit home in the aftermath of the 2011 floods that plunged Thai industry into a crisis and clobbered Japan’s supply chain.
Unease over China’s emergence as the leading Asian economic and military force as well means that Japan has a appropriate interest in preserving economic soft power in Asean. The region’s shared border with China, coupled with Beijing’s strong existing ties with Cambodia, Laos and Myanmar, makes Indochina ripe for Chinese inroads into Japan’s regional influence.

Thailand is a potential winner here, assuming the railways are actually constructed. But in a country with a history of cancelled and abandoned infrastructure projects, it is too any minute at this time to assume that either project will move forward, or that they will be completed even if ground is broken. Sceptics will point to “Thai Stonehenge”, several kilometres of concrete pillars intended for an abandoned elevated train to Don Muang International Airport.

Each government since the 1990s has discussed replacing the country’s ancient rail system, but two decades later no significant evolution has been made. The failure stands as a testament to dysfunctional politics: even with clear support from the public, business community, and no genuine resistance from opposition parties, no government has succeeded in making such an obvious and beneficial investment .
Nonetheless, the current military leadership has shown an ability to get things done, giving the projects a better luck of getting off the ground – particularly at the same time as the railways reflect the wider geopolitical concerns of both regional heavyweights.

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