HKTDC Hong Kong Means Business

Hong Kong Means Business Hong Kong Means Business

Search form

Languages

  • EN
  • 繁
  • 简
SUBSCRIBE
  • EVENTS
  • MY FEED
  • CONTACT HKTDC
  • ABOUT HKTDC
  • hktdc.com

Section Menu

  • multimedia
  • market spotlight
  • first person
  • Venture Hong Kong
  • heads-up
  • inside china
  • life & style
  • hktdc research

Search form

Languages

  • EN
  • 繁
  • 简
SUBSCRIBE
Hong Kong Means Business

Section Menu

  • multimedia
  • market spotlight
  • first person
  • Venture Hong Kong
  • heads-up
  • inside china
  • life & style
  • hktdc research
market spotlight
SAVE FOR LATER
SHARE / SEND

Thai-China Belt and Road Link on Track

A fast-rail link is set to boost the Thai economy while helping to bring the Belt and Road Initiative closer to reality.

25 April 2017

The anchor project of Thailand's Belt and Road-related infrastructure plans has long been the construction of a new rail line connecting Bangkok to China via Laos. Project negotiations between China and Thailand have been protracted, with the two parties disagreeing over several key issues. Last September, however, agreement was reached for the first phase of the project to begin later this year.

Expected to cost 500 billion baht (US$14.2 billion), the project is a key element of China's Belt and Road Initiative. Its proposed first phase will focus on the construction of a 256-kilometre high-speed railway link from Bangkok to the Thai city of Nakhon Ratchasima, and is expected to take three years to complete.

The second phase – expected to take up to two years – will focus on building a 355-kilometre rail link from Nakhon Ratchasima to Nong Khai, a northeast Thailand city near the Lao border. Once completed, the line will connect directly to the China-Laos railway, putting the Lao capital Vientiane within four hours journey time of Bangkok. From Vientiane, travelers can proceed to Kunming, the capital of China's Yunnan province.

Good Fit

A proposed third phase would see the construction of a 246.5-kilometre line linking the two provinces of Saraburi in central Thailand and Rayong on the country's east coast. There is also a longer-term plan to extend the line south, offering connections to Kuala Lumpur and Singapore.

The Thailand-China railway is considered a good fit with Thailand's own infrastructure development strategy – a comprehensive five-part, 1.9 trillion baht plan scheduled for completion by 2022. Overall, these initiatives are tied into the country's goal of establishing itself as the key strategic and logistics gateway to the ASEAN Economic Community.

The potential gains from the Thailand-China railway are considered hugely significant for Thailand’s development. An academic study by John Draper and Peerasit Kamnuansilpa, two lecturers at northeast Thailand's Khon Kaen University, indicated that the project would improve Thailand's connectivity with Myanmar, Laos and Vietnam via similar local Belt and Road-related projects. The connection with Myanmar is expected to ultimately lead to the creation of a new economic corridor linking China, Bangladesh and India.

Railway Benefits

The study also concluded that once the Thailand-China railway links up to the Trans-Asia railway, Bangkok will directly connect to Chengdu, the capital of Sichuan province, home to thriving electronics, IT, and car-manufacturing sectors. It will also bring Bangkok to within 15 days of rail-freight time to Lodz, Poland's third-largest city.

Other expected benefits include a sharp increase in the number of Chinese mainland tourists travelling to Thailand. China is already Thailand's leading, and fastest-growing, tourism source market. In 2015 alone, Thailand attracted eight million mainland tourists, a 71 per cent increase on 2014. These 2015 visitors accounted for 376 billion baht in revenue, an 87 per cent rise on 2014. Mainland tourists now account for more than 25 per cent of all overseas visitors to the country.

Good Economic Sense

From China's perspective, Thai investment is seen as making good economic sense. Not only is Thailand’s location geographically advantageous, the nation also has highly developed logistical, trade and finance resources. By nurturing Thailand as the primary logistics hub within the ASEAN bloc, China ultimately stands to gain greater access to Southeast Asia's 600-million strong market.

Despite these clear benefits, rail project negotiations have been far from smooth. Among the concerns raised were the interest rate China proposed with regard to its financial support, the overall ownership structure and the construction costs of the project. Thailand is also believed to have baulked at China's pursuit of development rights along the railway's rights of way.

These concerns led Thailand to reject China's initial funding proposal, opting instead to finance the project through domestic loans, bond issues and the establishment of an infrastructure fund. All of the trains and signaling systems, however, will still be purchased from China.

Ultimately, for the project to prove a success, Thailand will need its investment to be repaid through a substantial increase in trade. At present, its trade with China is still rising, with the country both its largest export market and its second-largest source of imports. China has also been Thailand's second-largest foreign investor, after Japan, for the past seven years.

While some see risks in Thailand's growing dependence on China, there is also a sense that it is currently by far the best option on offer. Overall, the rail project is expected to strengthen Thailand's role as the key conduit for trade and expertise between the ASEAN bloc and China. With global trade entering a period of uncertainty, such a role could be crucial to ensuring Thailand's economic well-being.

For more market opportunities, please visit: http://research.hktdc.com/.

Related Link
Belt and Road

BACK TO TOP ^
CONTENT PROVIDED BY
    Topics:
  • Finance & Investment,
  • Hong Kong,
  • ASEAN,
  • China,
  • infrastructure,
  • Belt and Road initiative
POST A COMMENT
  • Finance & Investment
  • Hong Kong
  • ASEAN
  • China
Home

Article Topics

ARTICLE TOPICS

FINANCE & INVESTMENT24664
HONG KONG36026
ASEAN37801
CHINA35607
INFRASTRUCTURE80947

ARTICLE TOPICS

FINANCE & INVESTMENT24664
HONG KONG36026
ASEAN37801
CHINA35607
INFRASTRUCTURE80947
BELT AND ROAD INITIATIVE108649

Social Share

FOLLOW US

GET WEEKLY UPDATES

newpaper-img

GET OUR WEEKLY EMAIL UPDATES

banner-img


I acknowledge that the above information may be used by the Hong Kong Trade Development Council (HKTDC) for incorporation in all or any of its database for direct marketing or business matching purpose (and may therefore become available to the public within and/or outside of Hong Kong for use by them), and for any other purposes as stated in the Privacy Policy Statement; I confirm that I have the consent and the authority of each individual named in this form to release their personal data for the purposes stated herein.


*For non-EU/EEA customers, please skip this box which is solely for EU/EEA customers as required by the relevant data protection law in the EU.

THANK YOU

Thank you for registering.

interest_article

YOU MAY BE INTERESTED IN

17 April 2018

Jack Lew at AFF: Hong Kong the Door for Investment

16 April 2018

Belt and Road Summit

22 March 2018

More than a Pipe Dream

20 March 2018

AFF 2018:Connecting investors from around the world

Related Events

RELATED EVENTS

27-30 April 2018

HKTDC Hong Kong Gifts & Premium Fair 2018

22-24 May 2018

Hong Kong Pavilion at the 23rd China Beauty Expo, Shanghai

5-10 November 2018

China International Import Expo, Shanghai

13-16 November 2018

electronica - International Trade Fair for Components and Assemblies in Electronics, Munich, Germany
FIND AN EVENT


I acknowledge that the above information may be used by the Hong Kong Trade Development Council (HKTDC) for incorporation in all or any of its database for direct marketing or business matching purpose (and may therefore become available to the public within and/or outside of Hong Kong for use by them), and for any other purposes as stated in the Privacy Policy Statement; I confirm that I have the consent and the authority of each individual named in this form to release their personal data for the purposes stated herein.


*For non-EU/EEA customers, please skip this box which is solely for EU/EEA customers as required by the relevant data protection law in the EU.


I acknowledge that the above information may be used by the Hong Kong Trade Development Council (HKTDC) for incorporation in all or any of its database for direct marketing or business matching purpose (and may therefore become available to the public within and/or outside of Hong Kong for use by them), and for any other purposes as stated in the Privacy Policy Statement; I confirm that I have the consent and the authority of each individual named in this form to release their personal data for the purposes stated herein.


*For non-EU/EEA customers, please skip this box which is solely for EU/EEA customers as required by the relevant data protection law in the EU.

Thank you

User login

  • Create new account
  • Request new password

Footer Menu

  • hktdc.com
  • ABOUT HKTDC
  • MEDIA ROOM
  • TERMS OF USE
  • PRIVACY POLICY
  • SITE MAP
  • 京ICP备09059244号

Footer Logo

Copyrights

Copyright © 2018 Hong Kong Trade Development Council. All rights reserved.

SHARE THIS STORY

EMAIL
LINKEDIN
GOOGLE+
FACEBOOK
TWITTER
WEIBO

POST A COMMENT

OR

POST A COMMENT

Don't have an account?

Create An Account

successfully added on your preferences.