Thailand to establish yuan clearing bank

Thailand to establish yuan clearing bank
Premier Li Keqiang and Thai Prime Minister Prayut Chan-o-cha inspect a guard of honor during a welcoming ceremony in Beijing on Monday. The two countries signed four deals to carry economic ties forward.

Premier Li Keqiang hosted his Thai counterpart Prayut Chan-o-cha in Beijing on Monday, three days after they met in Bangkok, in a gesture of reaching out to the Southeast Asia country. The two leaders officiated the signing of four agreements after an hourlong meeting, carrying economic ties forward.

According to the deals, a new bank will be established in Thailand as the clearing bank of the Chinese yuan. In addition, the countries will extend their currency exchange agreement, while new areas of cooperation will be developed between the Stock Exchange of Thailand and the Bank of China.

Beijing and Bangkok will also expand their technical cooperation in the water resource management and irrigation sector.

"Regardless of any changes, bilateral friendship has taken root and the cooperation will move forward," Li said at the meeting on Monday.

"Sino-Thai cooperation has made substantial progress during my visit to Bangkok, as the two governments reached agreements on rail construction and agriculture," he said.

He said the relationship with Thailand is important to China, not only because of geographic proximity, but also because the Southeast Asian country has been the coordinator country of China-ASEAN relations.

Prayut said Thailand welcomes Chinese investment and business people, and he is looking to push forward ties with the Chinese government by carrying out rail and agriculture deals as soon as possible.

China and Thailand are working to boost bilateral trade to more than $100 billion (S$132 billion) in 2015. Trade in the first eight months of this year exceeded $45.7 billion. China is the largest export market and major source of overseas tourists for Thailand.

Prayut, accompanied by his transportation minister, will visit China Railway Corp, the country's sole rail corporation, on Tuesday, before riding the high-speed railway between Beijing and nearby Tianjin to experience the Chinese train network.

The countries signed a long-anticipated rail deal on Friday as Li was in Thailand for a regional meeting. The agreement allows Chinese companies to design and build a high-speed railway line of more than 800 kilometers to connect Thailand's Nong Khai province with Bangkok, as well as Bangkok with the eastern province of Rayong.

China is one of the bidders for the Southeast Asian country's plan for three more new railway lines, connecting the capital with cities in the east, west, north and northeast, as part of its project to upgrade its aging rail network.

One of the three routes would connect Mae Sot at the Myanmar border with Mukdahan near the border with Laos. Another would connect Kanchanaburi with the industrialized province of Rayong province, and the third would run from Bangkok to the northern city of Chiang Mai.

The rail project is worth $10.6 billion.

Song Qingrun, a research fellow with the China Institute of Contemporary International Relations, said the high-speed trains will help bolster logistics in the region, drawing more investment among the countries and forming bigger markets.

"For instance, the network could woo more investors to less-developed areas in Thailand, while Thai farm products will be more effectively transported to surrounding countries," Song said.

With convenient high-speed trains forming an efficient network, the railway lines will also boost tourism along the routes, he said.

 

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