Thailand, China Sign Agreements To Boost Economy

Thai Prime Minister Abhisit Vejjajiva speaks during a press conference at a hotel in Beijing, China, 26 Jun 2009Thailand is looking to China to boost its ailing economy and to draw inChinese investments, as other sources of foreign funds dwindle. The effort to build China's businessprofile in Thailand came during Prime Minister Abhisit Vejjajiva'sofficial visit to China.

Prime Minister Abhisit, leading adelegation of more than 100 officials and business people to China,announced business deals worth more than $1 billion. Theagreements aim to increase Thai exports industries and to attractChinese investors.

Mr. Abhisit also held talks with Chinese Premier Wen Jiabao in Beijing during his four-day visit, which ends Saturday.

Theagreements involve exports of Thai rice, rubber, tapioca, fruits andjewelry. They are part of Thai Commerce Ministry efforts to expandbusiness networks between the two countries, to counter the pain causedby the global economic slowdown.

Thailand's economy has seen exports slump more 20 percent a month over the past year, and tourism has slumped.

SomphobManarangsan, director of the Chinese Studies Center at Thailand'sChulalongkorn University, says both countries want to boost tradeand investment.

"There are quite some prospects for theexpansion of economic activity between Thailand and China," saidSomphob. "Now the foreign trade of the two countries is just about $37billion - the two way trade. So I think they try to expand the figureto achieve the $50 billion in the next few years."

Somphobsays exports still account for over 60 percent of Thailand's totaloutput. Thai trade with China fell 25 percent to just over $11 billionin the first five months of this year, but Somphob expects the rate ofdecline to improve in the coming months.

The Thai governmentrecently set out a national investment plan worth more than $40 billionas part of efforts to revive the flagging economy.

The planincludes infrastructure projects, such as an expansion of the railnetwork. During his visit, Mr. Abhisit met with the chairman of theChina Railway Engineering Corporation.

Somphob says many countries like Thailand hope to benefit as Chinese businesses seek investments abroad.

"Fromnow on I think China will seem to boost outward foreign investmentparticularly in the field of direct investment," he said. "As you knowthat China has huge amounts of foreign reserves - so they need to goout to particularly to the developing economies."

Thailandalso hopes to lure back Chinese tourists, many of whom postponed visitsover the past year because of the country's recent politicaluncertainties.