China Profits in Thailand as US Watches

Throughout US global wars against communism, drugs and terrorism, Thailand has been an indispensable strategic partner. But the recent sharp deterioration in ties was evident in January when Thailand’s Foreign Ministry summoned the top US diplomat in Bangkok to register displeasure over the State Department’s critical comments about the country’s military rule.

As the erstwhile allies drift apart, China has moved to fill the gap with economic and strategic overtures aimed at countering the US pivot policy towards Asia.

Thailand’s official rebuke stemmed from a Jan. 26 public speech delivered by Daniel Russel, assistant US secretary of state for East Asian and Pacific affairs. In remarks to a Bangkok university audience, Russel raised concerns about a lack of “inclusiveness” in the military government’s so-called political reform drive and maintenance of martial law more than eight months after seizing power in a democracy-suspending coup.

The US has been a consistent critic since then-army commander, now prime minister, General Prayuth Chan-ocha ousted Yingluck Shinawatra’s elected government in May. Prayuth has since vowed to restore democracy after the passage of a new constitution and wide-ranging reform. Critics muted under martial law view the process as a charade to sustain the military’s political role.

While Prayuth’s coup was nominally staged to restore stability after months of debilitating anti-government street protests, many Bangkok-based diplomats suggest there was a hidden agenda to ensure that royalist generals rather than squabbling politicians are in charge during the delicate royal succession from ailing King Bhumibol Adulyadej, 87, to either his heir-apparent, Crown Prince Vajiralongkorn, or daughter Princess Sirindhorn.

First crowned in 1946 and revered by a broad cross-section of the population, Bhumibol’s passing is expected to diminish the monarchy’s overarching position in Thai society. Opposed political groups have jockeyed for position to fill the impending vacuum, contributing to a decade of turmoil characterized by revolving street protests and security clampdowns. The military has professed neutrality, but its paramount role of defending the crown is aligned with a royal establishment keen to sustain the palace’s power and privilege beyond Bhumibol.

Washington maintains what one US diplomat characterizes as an “engage not embrace” approach, a policy shift led by outgoing US Ambassador Kristie Kenney who initially refused to meet the coup-makers. Thai officials had deflected criticism of the coup and its clampdown on free expression and assembly, but the kerfuffle over Russel’s remarks, including the senior envoy’s insinuation that Yingluck’s impeachment by the military-dominated National Legislative Assembly was more political than legal, indicates relations are nearing a breaking point.

Prayuth told reporters that Russel had relied on “one-sided” information to assess Thai politics and he felt “sorry” that a long-time friend “misunderstood” the country’s context. Those comments resonate with a royal establishment that backed the coup while sensing that Washington sides with Yingluck and her self-exiled billionaire brother, former premier Thaksin Shinawatra. Both sides of Thailand’s political divide profess to fight for democracy. Each has demonstrated authoritarian and abusive tendencies while in power.

China, on the other hand, has aired no complaints, adroitly navigating the political currents compared to Washington’s polarizing pronouncements. Days after publicly scolding Russel, Prayuth hosted Chinese Defense Minister Chang Wanquan, the latest in high-level bilateral exchanges since the coup. Chang offered, among other things, to expand the two sides’ fledgling joint military exercises to include air force maneuvers.

Initiated in 2010, Chinese-Thai joint military exercises are more symbolic than substantial. But Beijing’s overtures to boost strategic ties have taken some sting out of Washington’s decision to downgrade this year’s joint Cobra Gold exercises, the region’s largest, held annually in Thailand since 1981. In punitive response to the coup, Washington limited this year’s maneuvers to humanitarian missions and reduced their naval component by some 20 percent. Some analysts speculate 2016 exercises could be cancelled if Thailand is not on a path to new elections.

The downsized maneuvers come amid a deal under consideration by Thailand’s Ministry of Defense to allow China to lead a multibillion dollar modernization of its Sattahip naval base on the Gulf of Thailand. Panitan Wattanayagorn, security expert and top aide to Defense Minister Prawit Wongsuwan, suggests that allowing China naval access to Sattahip would “rebalance” the special US privileges long held at U-Tapao airfield, used for staging bombing campaigns during the Vietnam War and, more recently, refueling military planes in transit to Afghanistan and Iraq.

Strategic recalibration by Thailand could have profound implications for the region’s balance of power. A new Ministry of Transport proposal to convert U-Tapao into a commercial airport, if approved, would likely end or diminish US military access to the runways. A Chinese naval presence in the Gulf of Thailand meanwhile would shift dynamics in two key maritime theaters by giving China a southern flank in the South China Sea and a new pressure point in emerging competition with India in the Indian Ocean.

It’s not clear that Thailand, renowned for astutely calibrating its great-power relations, has decidedly swung towards China. An older generation of still influential soldiers, embodied by the former prime minister, army commander and top royal advisor Prem Tinsulanonda, recall the vital US role in repelling China-backed communist revolutionaries bent on overthrowing the Thai monarchy in the 1960s and 1970s and keeping Vietnamese invaders at bay in Cambodia throughout the 1980s.

Prayuth’s cadre is less beholden to those Cold War memories and views China’s rise as more economic opportunity than strategic threat. During a December visit to Thailand, Chinese Premier Li Keqiang inked a US$12.2 billion dollar deal to build and help finance a north-south rail line connecting the Chinese city of Kunming to Bangkok and its industrial eastern coast. Prayuth’s economic lieutenants view the infrastructure as crucial to positioning Thailand as the soon-to-be-launched ASEAN Economic Community’s trade and transport hub. In 2013, China surpassed Japan as Thailand’s largest trade partner, representing around 14 percent of its total trade.

Still, Thailand’s ruling generals are aware of the risks of over-reliance on China, witnessed in the erosion of negotiating leverage in aid-for-concession Beijing deals for neighboring Cambodia, Laos and Myanmar. Thai officials have bristled at China’s proposed conditions for constructing the rail link, including Chinese management of its operations, rights to develop land along the 870-kilometer route, and a 4 percent interest rate on related loans.

There’s also political risk that the rail line facilitates fast-track migration of Chinese into Thailand as surging Chinese property acquisitions in the country become increasingly sensitive.

Obama’s pivot has turned on rising regional anxieties about China’s perceived hegemonic ambitions, particularly among Southeast Asian nations with competing territorial claims in the South China Sea. Thailand has no claim in the maritime dispute. While Obama’s thinly veiled containment policy has built new strategic bridges to authoritarian regimes in Myanmar and Vietnam, and deepened ties to the Philippines’ military accused of abuses, the active alienation of Thailand’s generals has opened the way for China to counter US regional advances and drive a geographical wedge in its encirclement.

The apparent US stand on democracy and rights could ultimately have the opposite effect. Prayuth’s post-coup vow to restore democracy quickly was made in part to appease the US and Europe, traditionally Thailand’s most important economic and strategic partners. The former army chief has already pushed back his original 2015 timeline for elections to 2016. As China presents an alternative rich source of trade and security, western pressure for new polls will have diminished resonance with ruling generals as they weigh the diplomatic costs and benefits of retaining power until the royal succession is secure.

Shawn W. Crispin has covered Thailand’s politics for more than 16 years variously with the Far Eastern Economic Review, Wall Street Journal and Asia Times Online. This is reprinted from YaleGlobal, the website of the Yale University Center for the Study of Globalization