Chiang Rai Residents to Protest at Chinese Embassy

What with the million person demonstration to come in Bangkok this weekend and the theft of weapons from the army by …. well, we all have suspicions as to what is going on there … what with all this, we could do without an outbreak of anti-Chinese sentiment but the ongoing problems with the River Mekong may provoke just that. Today it is being reported that Chiang Rai residents are planning to demonstrate outside the Chinese Embassy, on the basis that it is the dams in China which are contributing to the low level of water and the floods over a couple of years.

According to the leader of the Chiang Khong Conservation Group, Niwat Roykaew, “”We can’t stand by idly on the issue … No one is telling China about the painful experience we are facing. As the prime victims, we will make our voice heard and take action to deal with the problem.”

The principal issue seems to be that people feel no one is acting on their behalf – which is a reasonable position to take given the nature of the current regime. It is certainly the case that the government (or at least its few grown-up members) is generally unwilling to upset the Chinese leadership for a wide range of reasons. Flap-mouthed buffoon Kasit Piromya might be persuaded to say something different, after all. This is exacerbated by the unwillingness of the Chinese government to participate in regional agencies to discuss the relevant issues.

This could all turn nasty. Let us hope for some leadership (presumably by someone actually elected by the people).

Tension with China Likely as Mekong at Lowest Level for 30 Years

As the Mekong runs to its lowest level in three decades, boat traffic has had to be suspended and, in common with other waterways in the region, people wonder how they are going to survive. There will be the economic cost of reduced trade (there is an estimate of 100 million baht so far) and also the threat to the approximately 50 million people who rely on the Mekong in one way or another.

There will also, it seems inevitable, be increased tension with China, since it is widely believed that it is damming of the Lancang (which is the term used in China for the Mekong – it means something like the ‘turbulent river’) upstream which is the principal contributory factor to low levels.

Water wars or at least skirmishes seem likely this year in many parts of the GMSR.

The Thai-Chinese Free Trade Agreement

The Thai-Chinese Free Trade Agreement (FTA) has made significant differences to the livestyles of many Bangkok residents and, indeed, people in all the large towns of Thailand. The combination of the reduction of tariffs on various agricultural products (fruit and vegetables – especially apples, garlic and onions) together with improved road links within the Kingdom and connecting with Kunming in Yunnan and the spread of large retail outlets such as Tesco-Lotus means that consumers have been enjoying the availability of cheaper, better quality produce in various categories. However, we live in a capitalist system and capitalism always leads to endless acts of creative destruction in which some are winners and some are losers. On the whole, FTAs tend to increase overall levels of wealth by reducing tariffs, which in general terms lead to inefficient uses of resources. The winners from the FTAs can look after themselves – the losers are the ones about which government should be concerned. In this case, it is the garlic and onion farmers of Chiang Rai in the north who used to produce these goods for the country but who cannot compete with Chinese farmers who need help. Younger, more educated farmers are more likely to be willing to switch their production methods or their job or their location (so would be receptive to government support in retraining and so forth which are active labour market policies); on the other hand, the older and less well-educated farmers tend to be those less willing or able to change their lifestyles and so need more government assistance in the form of unemployment benefits and the like (which are passive labour market policies). It is usually better to plan for these changes in advance but TIT (This is Thailand). This FTA is not perfect – these things rarely are and, because it was signed on a bilateral basis (a larger, ASEAN-China FTA will come into force later) it is more susceptible to the relative power of both sides. That is, the power of Chinese negotiators compared to Thai negotiators (my market is bigger than your market so your farmers can jump through more hoops to gain access) is much higher. However, in a win-win situation there is no need for both sides to gain exactly 50% of the benefit. It should not be seen as a context with China in which Thailand either wins or loses.