C O N F I D E N T I A L SECTION 01 OF 08 BANGKOK 007313

SIPDIS

DEPARTMENT FOR EAP, EAP/BCLTV AND EAP/CM
DEFENSE FOR OSD/ISA
PACOM FOR FPA HUSO

E.O. 12958: DECL: 10/01/2014
TAGS: PREL MASS PGOV TH CH ASEAN BURMA
SUBJECT: THAI VIEWS OF A MORE ASSERTIVE CHINA

REF: BANGKOK 4085

Classified By: Ambassador Darryl N. Johnson. Reasons 1.4 (a and d)


1. (C) Summary. When analyzing China's growing influence
in the region, Thai experts tend to: accept China's growing
power as inevitable; hope that problems associated with
China's growing strength will either fix themselves or be
mitigated by other powers like the United States or India;
and, keep their fingers crossed that trade deals with China
lead to growth in Thailand without destroying domestic
enterprises. Thai analysts note that China is deftly
building up good will in the region to assuage any concerns
about hegemony. Perhaps naively, they tend to discount
notions that China will jeopardize its generally good
relations in the region in the near future by pressuring
ASEAN nations to support Beijing on political or strategic
issues.


2. (C) Thai experts tend to view China's growing role as
either not affecting the influence of other countries or as
coming at the expense of Taiwan and Japan rather than the
United States. Nonetheless, some warn that China's growing
role in the region comes at a time when the United States
appears preoccupied in the Middle East and with the War on
Terror. The MFA believes that it will be 15 years before
China could pose a security threat to the region and expects
the U.S.-Thai security alliance to counter any future threat.
While almost all experts note the generally positive nature
of Sino-Thai links -- pointing to China's help during
conflicts with Laos and Cambodia, China's positive role
during the Asian financial crisis and China's signing with
ASEAN the Code of Conduct on the South China Sea -- they also
point to the growing possibility of contention in several
fields: trade, Burma, energy, and Chinese development in the
upper Mekong River region. Undermining their analysis, Thai
government analysts notably tend to discount the possibility

of internal unrest, demographic problems or economic upheaval
upsetting current growth patterns inside China. Similarly,
they tend not to focus on the possibility of conflict between
Taiwan and the Mainland -- an attitude criticized by some in
academia and the media as overly optimistic. Thai Government
experts would benefit from opportunities to share views on
China's role in the region with U.S. delegations. End
Summary.

PALPABLE INTEREST IN THINGS CHINESE


3. (SBU) China's cultural influence continues to expand in
Thailand in obvious ways. In 2003, according to the Thai
National Statistical Office, 624,214 PRC citizens visited
Thailand, making it the 6th largest source of tourists to the
country (after Malaysia, Japan, South Korea, Hong Kong and
Singapore). The 15 percent of Thais who are ethnic Chinese
seem to take a greater pride in their heritage -- notably,
some now use their Chinese surnames along with their Thai
ones. The number of Mandarin language schools is growing at
the same time Japanese language studies are declining. Thai
sports fans openly pulled for Chinese athletes in the
Olympics in ways they've never supported Japanese or other
Asian competitors in the past. PRC-owned English-language
CCTV Channel 9 is very popular in Thailand and Mandarin
broadcasts on CCTV Channel 4 are readily available. The
foreign news editor for the national television network
Channel 9 reported that his station has signed a cooperative
agreement with CCTV. According to the editor, Channel 9 airs
around four direct feeds from CCTV at the top of its
international news every morning. The English-language
newspaper The China Daily plans to open a publishing
operation in Bangkok in 2005. The Xinhua news agency is
quite active and regularly places stories about "progress" in
Tibet and Han-Uighur "cooperation" in Xinjiang. Beijing
sponsors cultural and educational programs throughout the
country and has invested heavily in subsidizing Mandarin
training centers. Thai journalists are regular beneficiaries
of Beijing-funded junkets to China. A recent trip to Tibet
for ten Thai journalists resulted in a number of glowing
stories in Thai papers about the benevolence of Chinese rule
in Lhasa. Chinese and Thai diplomats express solidarity
openly.

CHINA'S RISE IS INEVITABLE


4. (C) Thai military, intelligence and foreign policy
analysts at the National Intelligence Agency (NIA), National
Defense Studies Institute (NDSI) and MFA tend to view China's
growing influence in Southeast Asia as inevitable. This
attitude was probably best described by Thongchai Chasiawath,
Counselor for the MFA's Third Asian Division, who recently
said "everyone is scared of the China threat, but if you
can't fight it, you must accept it and become its friend.
Build ties with that threat so that if they ever do hit you,
they hit their own interests." Rudiwan Kateluxana of the NIA
said "we have no other option but to accept China's offer for
closer economic links -- the opportunity is too great.
Nonetheless, we have to be cognizant that China is also a
competitor. Our challenge during the next few years as we
use our Free Trade Agreement with China to export our
agricultural goods, is to improve our competitiveness in
other areas." CAPT Nopadon Suwanapong of the military's
Strategic Research Institute (SRI), said that "the concept of
the 'China Threat' in traditional strategic terms is gone, to
be replaced by the concept of China as trading partner and
economic engine." Several contacts hope that risks to
Thailand posed by a rising China can be offset by continuing
strong links with the United States and, to a lesser extent,
with India.

WINNING GOODWILL BY GOOD BEHAVIOR


5. (C) Most Thai experts acknowledge the deft diplomacy
China recently has used to help reassure ASEAN countries in
general and Thailand in particular that China is a peaceful
neighbor. They cite China signing the ASEAN Treaty of Amity
and Cooperation (TAC), ASEAN Code of Conduct in the South
China Sea, China's leadership role in the Six-Party Talks on
Korea, the China-ASEAN Strategic partnership and the
China-ASEAN Joint Declaration on Non-Traditional Threats as
evidence of China's growing trustworthiness. Thongchai at
MFA believes that Hu Jintao and the other fourth generation
leaders in the PRC are much more adept at building regional
ties than Jiang Zemin was. "Hu is building bridges to the EU
and to ASEAN in a way Jiang never did; Jiang was much more
concerned with having strong ties with the United States," he
said. CAPT Arna Charanyananda, J-2 staff officer at the
Joint Staff College, sees China's signing the Code of Conduct
in the South China Sea as an example of Beijing putting its
desire to win influence in the region ahead of its short-term
national interest -- a view echoed by Rudiwan at the NIA.
"Ten years ago, China repeatedly threatened to use force over
the Spratleys," Rudiwan explained; "today, it has renounced
the use of force." SRI's Nopadon thinks that, by tying China
to regional security protocols, ASEAN is helping to ensure
that China will act more responsibly.

ECONOMIC LINKS ARE SEDUCTIVE


6. (C) In addition to China making effective diplomatic
moves, all of the Thai China watchers interviewed for this
message agree that the desire to have access to China's
market is the major driving factor in Thailand's growing
links with the PRC. According to the Customs Department of
Thailand, in 2003 Thailand exported 235 billion baht (5.73
billion dollars) of goods to China, a 54 percent increase
over 2002. Also in 2003, Thailand imported 203 billion baht
(4.95 billion dollars) worth of goods from the PRC, a decline
of 4 percent from 2002. The October 2003 Sino-Thai Free
Trade Agreement (FTA) and the 2002 Sino-ASEAN FTA have many
Thai companies eager to sell their wares in China. Rudiwan
believes that growing economic competition between China and
the United States is good for medium-sized economies like
Thailand's. Suvapan Tamyuwattana, Director of NIA's Division
One, noted that many ASEAN leaders, including some in
Thailand, now subscribe to the Chinese maxim, "what is good
for China is good for the rest of Asia." MFA's Thongchai
pointed out that PM Thaksin agrees with the maxim that "a
rich China will lead to a prosperous Asia" and claims that
Chinese leaders who promote economic links with Thailand are
"knocking on an open door." Thongchai sees Thailand as
uniquely situated to serve as a bridge between China and the
rest of ASEAN. He is optimistic that China will expand road
links to Thailand, passing through Laos and Burma, linking
the two countries.


7. (SBU) Public perceptions of the impact of the FTA
affecting agricultural goods are quite different than the
optimistic view Thai analysts tend to hold. 87 percent of
the items covered by the Sino-Thai FTA are fruits and
vegetables. According to the Customs Department of Thailand,
from October 2003 until September 2004 the value of Thai
fruit exported to China under the FTA was 3.43 billion baht
(83 million dollars), a 37 percent increase from the previous
12 months. For the same period, however, Chinese exports of
fruit to Thailand were worth 1.28 billion baht (31 million
dollars) an increase of 125 percent over the previous 12
months. For the same period, the value of Thai vegetables
exported to China was 8.13 billion baht (198 million dollars)
a 73 percent increase over the previous year while Chinese
exports of vegetables to Thailand were worth 3.06 billion
baht (76 million dollars) a 120 percent increase. Press
reports and public comments on the FTA Early Harvest pact
have focused on its impact on Thai farmers in the north of
the country who have reportedly been overwhelmed by cheaper
and better Chinese agricultural products such as garlic and
onions. Experts complain that the RTG, which was urged to
quickly conclude the agreement by PM Thaksin, did not
seriously study the impact of the agreement nor draw up plans
to help those negatively affected by it. In addition,
critics complain that Thai negotiators did not understand or
anticipate the difficulties faced by intra-provincial trade
in China, or the effect that excise taxes, documentation
requirements and other non-tariff barrier would have on Thai
products going into China. Ministry of Commerce officials
admit this lapse and say that it has been a good learning
experience. Interestingly, the Thai public seems to blame
the RTG for rushing into the agreement rather than the
Chinese for benefiting from it.

MILITARY TO MILITARY LINKS WITH CHINA


8. (C) Thailand continues to have good relations with the
Chinese military. The Chinese military attache in Bangkok is
a Brigadier General. Chinese defense sales delegations visit
Bangkok frequently. Many Thai military officers are
appreciative of China's assistance in supplying small arms,
tanks and artillery shells during conflicts involving Laos
and Cambodia and every year a number of Thai officers receive
military training in China. Nonetheless, Thai officers
acknowledge a vast disparity between Thailand's military
links with the United States and links with the PRC. "Most
of the equipment we received from China was not of good
quality when we received it and it is all outdated now,"
General Ronachuck Swasdikiat, former Commanding General of
the National Defense Studies Institute, said. NIA's Suvapan
notes the growing number of security seminars and dialogues
Thailand and ASEAN countries have with China and expects
these to continue to increase. However, a number of Thai
military officers are quick to emphasize that China's
influence on the Thai military is minuscule compared to that
of the United States. "For every one officer we send to
Beijing for training, we send 400 to the United States," one
explained.

DIPLOMATIC PRESENCE IN BANGKOK


9. (C) PRC diplomats in Bangkok have told U.S. Embassy
officials that they view the Chinese Embassy in Bangkok as
Beijing's leading diplomatic presence in ASEAN. Chinese
Ambassador Zhang Jiuhuan is a polished professional -- a
veteran of two previous tours to Bangkok and one in Singapore
-- who speaks excellent Thai and English. Mid-level Chinese
Embassy staff tend to be much more professional than their
predecessors. The PRC Embassy in Bangkok has done a
masterful job of reaching out to Sino-Thais. While attending
a large PRC-hosted function that included several hundred
ethnic-Chinese Thai nationals, one senior Chinese official
proudly claimed that "ten years ago this would have been
Taiwan's crowd." Thai military and government officials
attended PRC National Day on October 1 in large numbers and
at senior levels.


CHINA AND THAKSIN


10. (C) Allegations that Prime Minister Thaksin Shinawatra
is under Beijing's spell are rife in Bangkok. Outspoken
Thaksin critic Kavi Chongkittavorn of the Nation calls
Thaksin "China's deputy sheriff." Professor Thitinan
Pongsudhirak of Chulalongkorn University claims that
Thaksin's decision to single out and expel Falun Gong
adherents from Bangkok in preparation for 2003's APEC Leaders
Summit was directly due to pressure from Chinese leaders
(NOTE: Falun Gong adherents also were not tolerated under
the previous Thai administration). Thitinan and Kavi both
claim Thaksin has been receptive to overtures from Beijing in
order to win contracts for Thaksin's family multinational
company, Shin Corporation. They point to a recent telecom
license deal involving Shin's IPStar broadband satellite
system and the China Satellite Communications Corporation
(Chinasat) as an example of how China has rewarded Thaksin
for his support of closer business links.

CHINA'S RISE COMING AT WHOSE EXPENSE?


11. (C) Many Thai analysts believe that both Japan and
Taiwan are losing influence to a rising China. Rudiwan notes
that China's growing influence in the region comes at a time
when Japan is declining in power and the United States is
preoccupied in the Middle East and with the War on Terror.
She suggests that ASEAN countries are improving ties with
China to take into account China's rise and to hedge bets in
case the United States remains occupied elsewhere. Rudiwan
also points out that China's effective use of Free Trade
Agreements with ASEAN countries make those countries more
linked to China and cut Taiwan out. In 2003, according to
the Customs Department of Thailand, Thai exports to Taiwan
were worth 108 billion baht (2.63 billion dollars), or 46
percent of exports to the PRC. In 2001, Thai exports to
Taiwan were worth 85 billion baht (2.07 billion dollars) or
67 percent of the value of exports to the Mainland. In 2001,
more Taiwanese than mainland tourists visited Thailand but
those numbers have reversed since then. Nopadon sees
participation in regional meetings as an effective bellwether
of influence. He notes the growing number of Chinese scholars
at conferences outlining the future of Southeast Asia and
sees fewer and fewer Japanese scholars attending. Kavi
Chonkittavorn claims that contacts between senior Thai and
Chinese leaders are much more frequent than they were in the
past and seem to be coming at the expense of meetings between
Thai and Japanese leaders.


12. (C) Political Minister Hasegawa Susumu and First
Secretary Hajime Kishimori of the Japanese Embassy in Bangkok

SIPDIS
are also convinced that China's growing role in Southeast
Asia is coming at Japan's expense. They privately lament
that Tokyo does not seem to have a coherent strategy to
reengage with the region. MFA's Thongchai also believes
China's growing role is coming at a time when Japan's
influence is declining. He thinks that it would be good for
U.S. interests if Washington were to urge Japan to take a
more active leadership role in fora affecting Thailand.

CHINA TAKING OVER ASEAN?


13. (C) Many analysts suspect China's participation in the
ASEAN region is an attempt to further expand its influence,
perhaps at the expense of the United States. Arna of the
Joint Staff College describes China's "partnership strategy"
as the means by which China hopes to emerge as a long-term
counterweight to the United States in the region. Under this
"partnership strategy" China stresses the need for
multilateral approaches in ASEAN and ARF as the best means to
solve regional problems. China is also not hesitant to play
up its role as a member of the UNSC P-5. While Arna believes
China wishes to use only economic influence in the near-term,
he is convinced that China's ultimate aim is to replace the
United States as the strongest power in the region. Rudiwan
at NIA claims that every country in ASEAN remains quietly
suspicious of China's real agenda in the region and is
concerned about its influence in ASEAN. Nonetheless, she
notes, so far the attractiveness of the China market coupled
with China's good behavior in North Korea and the Spratleys
has more than offset that suspicion. MFA's Thongchai also
believes that China wants ASEAN to be "China-centric" and is
convinced of China's long-term goal to supplant the United
States in the region. However, he discounts concerns that
China will be able to exercise power on a par with the United
States for decades. On the other hand, Nopadon believes that
China's growing role in ASEAN will not allow the organization
to act contrary to China's wishes ten years from now.

UNITED STATES REMAINS THE PREEMINENT POWER


14. (C) General Ronachuck observed that Thailand is not
about to replace the United States with China as its
strategic partner; "we are cordial with China, we are allies
with the United States, and that's not about to change" he
said. NIA's Suvapan goes further by saying "We recognize
that China is trying to use growing economic ties to create
an atmosphere of political and security dependence, but this
issue is quite sensitive among Thai senior officials who
intend to rely on the United States as the prime guarantor of
security in the region for the foreseeable future." MFA's
Thongchai thinks that, to counter the risk of a rising China,
Thailand will need to rely more strongly on the bilateral
relationship with the United States. He does not see this as
a zero sum game, however, noting that if China and the United
States can continue to improve relations with each other,
they could work jointly in the region to promote stability.

PEACEFUL COEXISTENCE -- ARE THAIS NAIVE?


15. (C) Most of the analysts interviewed seem convinced
that China's impressive economic growth will continue for the
next several years uninterrupted. None seem willing to
seriously entertain the notion that China's huge unemployment
figure, overheated financial sector, insolvent banks, aging
population or underdeveloped interior might upset the
economic juggernaut. As a result, Thai analysts seem unable
to consider moves a struggling China might make that could
jeopardize regional security. COL Thavin Akaramathayut, J-3
Staff officer at the Joint Staff College, realizes that China
must continue to maintain a high level of economic growth in
order to modernize and believes that China will be unwilling
to jeopardize Southeast Asia's peaceful environment for the
foreseeable future. Nopadon is also generally optimistic
about China's emerging role in Southeast Asia and seemed
unwilling to consider alternative scenarios where internal
problems cause China to act aggressively to divert domestic
attention. Thongchai at MFA is convinced that Chinese
leaders will not make any aggressive moves in the region for
the foreseeable future; "their number one concern is to
maintain Party control and they will do nothing to jeopardize
the economic growth that allows the Party to remain in
power." He added, "China can't afford a war over Taiwan, it
would kill economic growth." Rudiwan agreed by saying, "We
are not sure that China would use force against Taiwan; in
the near term we think China wishes not to jeopardize its
economic development. In the future, however, we are not
sure what China's long range strategy is." She added, "We
believe the United States will continue to successfully use
influence over Taiwan to prevent Taipei from declaring
independence."

OVERLY ROSY PICTURE?


16. (C) General (ret.) Teerawat Putamanonda, an influential
thinker on a number of security issues, is concerned that
Thai leaders have too rosy an opinion of future relations
with China. "I think they are not considering our potential
points of conflict carefully enough," he cautioned. Teerawat
is especially concerned that China's growing influence in
Burma will undermine Thailand's interests there and hurt
efforts to stop the drug trade between Thailand and Burma.
Doctor Panitan Wattanayagorn of Chulalongkorn University said
that, while Thailand should not overlook the possible
benefits of closer ties with the PRC, it is in Thailand's
best interests to think about less sanguine possibilities.
Panitan thinks that Thai analysts covering China could gain
much by having more regular meetings with U.S. counterparts.


SOME AREAS OF DISAGREEMENT STARTING TO APPEAR

17. (C) While noting the generally good relationship
between China and ASEAN countries, some analysts predict that
the number of contentious issues will grow as China becomes
stronger. Thongchai noted how forcefully Beijing responded
to Singapore PM Lee Hsian Loong's recent trip to Taipei and
expressed concern over how abjectly Singapore apologized and
made amends for the "offense." Kavi of the Nation finds it
significant that ASEAN resisted Chinese overtures to accede
to the protocol of the Southeast Asian Nuclear Weapons Free
Zone but is skeptical that the effort may have served as a
wake up call to ASEAN leaders that they need to stand up to
Beijing more frequently. Joe Horn, an Anglo-Thai businessman
with offices in Bangkok and Beijing believes that trade
friction between Thailand and China will only increase.
"It's fairly easy to avoid the political hotbuttons with
Beijing -- Tibet, Falun Gong, Taiwan -- but as more and more
Thai consumer companies are undercut by cheap Chinese
imports, there will be a growing call to protect Thai
industry," he predicted. Thongchai at MFA and General
Teerawat believe that Burma will become an increasingly large
irritant between China and Thailand. Thongchai believes that
Chinese efforts to reach the Andaman Sea through Burma are at
odds with Thailand's interests in having Chinese goods bound
for ASEAN pass through Thailand.


18. (C) General Ronachuck believes that China's planned
dams along the upper Mekong River will give it a great deal
of influence over countries downriver. SRI's Nopadon
foresees Mekong subregional development and the drive to find
new sources of fossil fuels as the two issues most likely to
cause bilateral problems between China and Thailand. He sees
energy security as second only to Taiwan as a potential cause
for China to use force in the region. Nopadon described
Beijing's attitude towards Taiwan as "irrational" and,
looking at Chinese spectators' behavior during the recent
Asian Games, expressed concern about rising nationalism in
the PRC. LTG Tanongsuk Tuvinun, Superintendent of the
National Defense College, is also skeptical that Thailand can
avoid economic disagreements with China; "China says it does
not want to be a superpower, but it seems to be moving in
that way by acquiring better defense technology, improving
its space program and modernizing its military. Every
country looks at China as a potential export market, yet look
around at how many companies import far more from China than
they export there."

WHEN COULD CHINA POSE A SECURITY THREAT?


19. (C) NIA's Rudiwan concludes that China will continue to
try to use its economic clout to influence ASEAN countries in
the political and security fields. Nonetheless, she doesn't
see China as an outright security threat for several years.
Thongchai predicts it will be 2020 at the earliest before
China will have the potential to pose a military threat to
Thailand. If present economic trends continue and China can
maintain 7 percent annual growth, Thongchai believes China
could have the means to possess three or four aircraft
carriers by 2020.

COMMENT


20. (C) While Thailand's desire to see China emerge in the
future as a responsible member of the international community
are in line with our objectives, Thai analysis of the
ramifications of China's growing influence seems inadequate
and overly optimistic. RTG economic officials seem unable to
gauge the impact of many of Thailand's recent trade deals
with China, and Thai strategic thinkers seem overly sanguine
about the effect China's rise will have on the security
situation in the region. Thailand's close ties with the PRC
give Thai sinologists some insights that might be beneficial
to American experts. A regular exchange of views between
Thai and U.S. sinologists could improve our insights into
Chinese policies and practices in this region while helping
the Thais to improve their analysis. End Comment.
JOHNSON