China inks deal to build 900km Thai railway line

Mr Wang Xiaotao (left), the deputy head of China's National Development and Reform Commission, and Thai Transport Minister Arkhom Termpittayapaisith (right) celebrating the railway construction agreement. The deal underlines the warming ties between
Mr Wang Xiaotao (left), the deputy head of China's National Development and Reform Commission, and Thai Transport Minister Arkhom Termpittayapaisith (right) celebrating the railway construction agreement. The deal underlines the warming ties between Bangkok and Beijing.PHOTO: REUTERS

BANGKOK • China and Thailand have agreed to build an ambitious 900km railway line in the latest sign of closer ties between them after Bangkok's links with Washington have cooled.

The two countries agreed on Thursday in a memorandum of understanding to build a long-mooted railway from the Thai-Laos border to Bangkok.

"We want this project to take shape soonest, especially in terms of construction, and we are trying to speed up construction by middle of next year," Thai Transport Minister Arkhom Termpittayapaisith told reporters.

China's ambitious infrastructural plans for the region include building rail links from Kunming in its south-west via Laos to Thailand.

Construction of the railway was previously expected to begin in September. Mr Arkhom said the design of the railway had delayed the start of construction.

The two countries did not agree on a price for the rail project at the meeting, he added. China has offered to finance the project with a loan with 2.5 per cent interest, but Thailand wants 2 per cent.

At the meeting in Bangkok, China also agreed to buy one million tonnes of white and jasmine rice and 200,000 tonnes of rubber from Thailand, said the Thai Commerce Ministry.

State-owned Chinese grains trader Cofco Corp said in a statement on its website late on Thursday that it had signed a framework contract to import one million tonnes of Thai rice.

It said the company would start negotiations as soon as possible on batch contracts, while working to expand the domestic market for Thai rice.

With plentiful harvests in recent years, China does not need to import rice, but import deals have been signed to support Sino-Thai friendship and economic cooperation and could also help meet Chinese consumer demand for more diverse products, Cofco said.

The agreements signed with China could help boost the sluggish growth rate of South-east Asia's second-largest economy.

China has said it is supportive of Thailand's military rulers, who took power in a May 2014 coup that ousted an elected government. Since then, Thailand's generals have sought to counterbalance ties with Washington and launched a charm offensive towards China.

Thailand is one of Washington's oldest partners in the region but, following the coup, Washington downgraded diplomatic and military ties.

REUTERS

A version of this article appeared in the print edition of The Straits Times on December 05, 2015, with the headline 'China inks deal to build 900km Thai railway line'. Print Edition | Subscribe