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HONG KONG — China has signed a memorandum of understanding with Thailand to build 542 miles of double-track railway from Nong Khai on the Laos border to the Thai industrialized eastern seaboard.
The MOU was signed on the sidelines of a two-day regional summit in Bangkok, and is seen as consolidating China’s influence in a country that has had strong ties with the U.S., but which have cooled since the military coup in May, according to a report by Reuters.
“China will be responsible for the construction and development of the rail network and Thailand will take part in preparing the groundwork for construction,” Thai Transport Minister Prajin Junthong told the agency.
China has provisionally agreed with Laos to build a railway from Kunming through Laos, with the aim of connecting with Thailand. China will also develop another, 82-mile rail line linking the central province of Saraburi to Bangkok, about 67 mile away. Construction would begin in 2016, said Air Marshal Prajin.
Earlier this month, Thailand’s military-stacked Legislature approved a preliminary agreement on the China deal, putting the value at $10.66 billion.
Mayasu Hosumi, president of the Japan External Trade Organisation in Thailand (JETRO), said the rail network was “indispensable for the enhancement of production networks” in the region.
The rail development will link Thailand’s container port of Laem Chabang with Laos and revive the gateway port’s single rail transfer project that aims to ease the flow of containers to and from the terminals. It is part of Laem Shebang’s phase three development that was put on hold by the military coup.
Chinese Premier Li Keqiang attended the Greater Mekong Subregion (GMS) summit in Bangkok alongside prime ministers and presidents from Laos, Cambodia, Vietnam, Myanmar and Thailand. Li is the most high-profile foreign leader to visit Thailand since the coup, signalling, Thailand says, its return to normal following months of political unrest, said Reuters.
The army seized power in May to end months of political turmoil, but the economy of Southeast Asia’s second-largest economy has struggled in the face of weak exports and sluggish domestic demand. The economy grew just 0.2 percent in the first nine months of the year, although the central bank said its GDP has expanded in the last quarter.
Factory output in November declined 3.5 percent year-over-year, down for a 20th straight month.
Exports, which are equal to more than 60 percent of the economy, picked up in September and October but slipped in November. The central bank forecast exports to contract 0.5 percent this year and rise only 1 percent in 2015.
2014-12-20 09:21 Xinhua Web Editor: Qian Ruisha
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Visiting Chinese Premier Li Keqiang said here Friday that China and Thailand have agreed to kickstart mutually beneficial cooperation on agro-product trade and railway.
China eyes deeper cooperation with Thailand and hopes for a more balanced bilateral trade and economic relationship, Li told reporters after meeting with Thai Prime Minister Prayut Chan-o-cha.[Special coverage]
The two governments signed a memorandum of understanding on farm produce trade cooperation. China, Li said, has agreed to double its purchase on the basis of the volume the two sides agreed upon last year.
China expects the new initiative to empower both China and Thailand to resist risks of international market fluctuations and help improve the livelihood of Thai farmers, he said.
“Only China has such a big market and a huge purchasing power which could consume the big agricultural production of rice, rubber and others of Thailand,” said Li.
In addition, the two governments also inked a memorandum of understanding on railway cooperation.
Li said the Chinese and Thai governments have agreed to build Thailand’s first standard-gauge railway lines with a total length of more than 800 km, which has been approved by the National Legislative Assembly of Thailand.
The agreement allows China to invest in two dual-track rail lines in Thailand that will span 734 km and 133 km respectively and connect northeast Thailand’s Nong Khai province, Bangkok and eastern Rayong province.
The project is estimated to cost some 10.6 billion U.S. dollars.
“This is the expansion, extension and further confirmation of the previous agreement that the Chinese and Thai governments reached last year,” said Li.
The Chinese premier said he hopes that the two sides will speed up preparation for the railway project and lay a solid basis for the beginning of construction at an early date.
The new railway will also benefit neighboring countries if being extended to other places of the region, Li said.
Chinese standards, equipment and manufacturing capacity will all be used in building the Thai railway, which helps China export its manufacturing capacity to the rest of the world, Li said.
For his part, Prayut said Thailand and China are friends sharing weal and woe, and his country highly values its relations with China.
Bilateral cooperation on railway and farm produce trade is of vital significance to Thailand, and is conducive to regional inter-connectivity and development, said Prayut, adding that Thailand will cooperate closely with the Chinese side to facilitate the implementation of relevant cooperation agreements.
Thailand, he said, will take the 40th anniversary of the establishment of diplomatic ties next year as an opportunity to elevate its relationship with China to a new height.
Li is here to attend the fifth summit of the Greater Mekong Subregion (GMS) Economic Cooperation.
The Chinese premier said he looks forward to having an extensive exchange of views with all parties on deepening regional trade and economic cooperation, enhancing inter-connectivity and promoting innovation in industrial cooperation.
Hailing China’s “crucial” role in the GMS, Prayut said Thailand is willing to join hands with China and other parties of the GMS mechanism for more fruitful results.
The GMS Economic Cooperation Program, which was started in 1992 by six countries along the Mekong River — Cambodia, China, Laos, Myanmar, Thailand and Vietnam, aims to pool their efforts for improving infrastructure, promoting trade and investment and stimulating economic growth.
On a broader scale, Li said, the GMS cooperation will further enrich China’s partnership with the Association of Southeast Asian Nations (ASEAN).
China, he added, stands ready to cultivate stable, peaceful and friendly relations with its ASEAN neighbors.
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