China and Thailand yesterday agreed to expand economic cooperation as part of visiting Thai Prime Minister Abhisit Vejjajiva's efforts to revive the Thai economy that was hard hit by the financial crisis and political unrest.
Commerce ministers from Thailand and China signed the agreement at the Great Hall of the People after a meeting between Premier Wen Jiabao and Abhisit.
The two premiers officiated at the signing ceremony.
Details of the agreement were not available at press time, but Abhisit vowed before arriving in Beijing to try to attract Chinese enterprises to invest in a new three-year plan worth about 1.4 trillion baht ($40.9 billion) to revive an economy facing its first annual contraction since 1998.
The Thai prime minister, on his first visit to China since taking office in December, is leading more than 100 government officials and entrepreneurs - the largest team he has taken overseas.
In the first quarter of the year, the Thai economy contracted by 7.1 percent, following a fall of 4.2 percent in the fourth quarter of last year, according to the Thai Commerce Ministry.
Ministry figures showed its trade with China fell 25 percent to $11.3 billion in the first five months of the year.
Virachai Virameteekul, from the Thai prime minister's office, said before the visit that Abhisit would explain to Chinese leaders the reasons behind political unrest in the country and assure Beijing that Bangkok was ready to embrace foreign investment.
Abhisit has raised his expectation for bilateral trade from the current annual $40 billion to $50 billion for 2010.
His efforts received a positive response.
"The Chinese government encourages and supports Chinese enterprises to invest in Thailand and join in its infrastructure construction," reads a press release issued by the Foreign Ministry after the meeting.
Zhang Jiuqin, an expert on Thai studies with the Ministry of Commerce, said that while Sino-Thai trade is shrinking, the goal of $50 billion in 2010 will "possibly be reached", given signs of a warming global economy.
Thai Crisis' head will explode after reading this.
I'm seriously considering the idea that Abhisit may be mentally ill. He has cognitive dissonance problems where what he thinks is reality is so far removed from the actual reality.
Is he dishonest or just stupid? I'm having problems making the distinction.
Bi-lateral trade between Thailand and China is roughly $36 billion--and shrinking. And Abhisit think it can grow to $50 billion by next year during the worst economic down turn since the Great Depression.
Not only that, he wants the Chinese to invest $40 billion in Thailand within the next 3 years.
Why would China invest $40 billion in Thailand to produce goods that it can produce better and much more cheaply in its own country?
By the way, Abhisit really is an idiot. Thailand doesn't have a liquidity problem or a foreign investment problem.
Abhisit has no plans to use foreign investment to stimulate domestic demand. He has done nothing to remove the barriers to foreign money in the country when it comes to competing in the domestic market.
Most of the Thai economy is built on using Thailand an entrepot for foreign exports. Abhisit wants to continue that idiotic model. China doesn't need Thailand as an entrepot for its own goods.
If Abhisit had a brain cell in his head, he wouldn't be going hat in hand begging like a shameless peasant to foreign countries. Instead, he should be encouraging domestic banks to invest in Thais and create entrepreneurship and stimulate domestic demand, so millions of people can be pulled out of poverty on their own accord.