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DEVELOPMENT POLICY BEYOND CHINA RISING: EAST-WEST ECONOMIC CORRIDOR (EWEC) AND LOWER-NORTHERN

Prateep Chaylee*

Abstract

This article explores regional development policy in lower- through the Indo-China Intersection (ICI). The ICI arrived when East-West Economic Corridor (EWEC) was officially opened in Thailand in 2008. Interestingly, the return of EWEC at this time came along with the rise of China’s power, which is the main key factor to run this hopeful mega-project in and in the northeastern region. Thai geography places this area in the middle of the ASEAN region. Therefore, it is likely to be the focal point of economic and political powers in this region. The southern part of China’s Yunnan province is a landlocked area. Since 1989, China has played a role through GMS Economic Cooperation to nearby countries, which was the first project initiation. During the 1990s, China’s FTA with other ASEAN countries was expanded to gain from trade with new economic partners. Consequently, Guanxi Economic Strategy through Beibu Gulf Economic Zone (BGEZ) was established and integrated with the Quadrangle Economic Cooperation or GMS Economic Zone. The second phase of the Guangxi strategy mainly focuses on opening the gate to ASEAN countries by using the ―one axis, two wings strategy.‖ This strategy is not only a global strategy of land-link but is also a factor of change in lower-northern region and nearby areas.

Keywords: EWEC, ICI, BGEZ, Guangxi strategy

* Ph.D. student, Institute of China & Asia Pacific studies (ICAPS), National Sun Yat-Sen University, Republic of China (Taiwan) E-mail: [email protected]

Received: 15/12/2019; Revised: 28/02/2020; Accepted: 03/03/2020

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I. Introduction

Phitsanulok is the main city of the Phitsanulok hopes to become a central lower-northern region of Thailand, which hub of logistic and supply chain, that is borders northern and . likely to be a new hope of economic Phitsanulok is an important and historic development as a strategic zone of city, located approximately 377 km north transport links within nearby regions and of , and is the capital of neighboring countries, especially CLMV , which stretches all countries. In the first phase of initiation, the way to the Laotian border. Phitsanulok the center of transportation and logistics is one of the oldest cities in Thailand, was proposed and promoted by the founded over 600 years ago. It is probably Phitsanulok Chamber of Commerce to best known as the birthplace of King develop Phitsanulok’s infrastructure. The , who freed Siam from Burmese related development policy aimed to fit domination in the late-sixteenth century, with the big changes of regional and his brother and successor King integration that would happen in the Ekathosarot (Sanphet III). As the cross- future. Another main gateway of links in road between the northern and central this region came from the proposed regions, Phitsanulok has long been development policy of the Thai important both for political and strategic government in terms of North-South reasons, and was fought over many times. Economic Corridor (NSEC) and East-West Economic Corridor (EWEC). However, Phitsanulok was the capital of the future development and its real Thailand for 25 years during the reign of opportunities and obstacles are still King Boromma Trailokanat of Ayutthaya. unclear. The city is located on the banks of the and it was originally a small Khmer Economic opportunity can be picked outpost known as Song Kwae, before the up ahead of time by a visionary former Khwae Noi River changed its course in the president of Phitsanulok Chamber of eleventh century. Phitsanulok was also a Commerce, Mr. Virot Jirattikalachoti, who provincial center of the Angkorian Empire proposed the master plan and its steps of during the Angkorian period. action for Phitsanulok City as a main gate of the Indo-China region and not only a Phitsanulok has recently become narrow view of the past. It is forecast that one of the hubs of educational center in this plan will lead to a huge influx of Thailand’s lower-northern region. It is also trade from Southern regions of China home of tertiary institutions such as and Thailand because it is cost - effective and Pibulsongkram and time saving (Interviewed; 2018). Rajabhat University, as well as to a major Consequently, the ICDI was initiated and base. This reflects the approved by the Thai government in 1997. geographical significance, and the The resolution of the Cabinet’s meeting in economic and societal development of the Chiang Rai on 29 July 1997 shows the city. Phitsanulok is primarily built on flat approval of northern region development lands with some hills. The eastern portion strategy, as follows: of the city has some wooded areas. The 1. Revival and reservation of natural city is situated in the Nan Basin, which is resource, environment, and culture; part of the Chao Phraya Watershed. 2. Development of people and society; 3. Develop areas with potential that can support linkage to neighboring

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countries Among these, Similarly, the master plan of regional Phitsanulok is set to develop as a development in Chiang Rai, the northernmost link of the East-West Corridor by province, is as a gate to neighboring making protocol for infrastructure countries by developing the Mae Sai- and economic linkage development Kunming route and Chiangsaen Port, for Phichit, Petchaburi , network under the Greater Sukhothai and Kampangphet, in Mekong Sub-region Cooperation (GMS) line with the city’s growth rate. or ―North-South Tourism Corridor‖, Mae 4. Restructuring of agricultural and Sod border, Tak and Mae Sai border, industrial production. Chiang Rai and the linkage between the Greater Mekong Sub-region Cooperation Phitsanulok and its vicinity are established (GMS) economic cooperation (economic as a developing area for the “Indo-China hexagonal area) and economic area. Intersection” (ICI), covering Sukhothai, Phitsanulok, Phitchit, and Likewise, the geographical advantage linked economic areas as Tak, Kamphaeng of the Phitsanulok area can be developed Phet and Uttaradit. However, this into a center for distribution before development must consider the links transporting to other parts and both sea between the existing economic areas of shores. Interestingly, although this Nakorn Sawan and . Therefore, development project has been ignored and National Economic and Social Development has not been continually developed for 12 Board was assigned to study and collect years, it also directly affects the economic information in the area. development strategy of the lower- northern region. Consequently, the name of this project and its signpost raise the question: “Can we really go to CLMV countries by this route?”

Figure 1: Indo-China Intersection

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The ICI project was reactivated in Thailand - , Lao People’s September 15, 2009 by the joint Democratic Republic, and Southern China. cooperation of the Ministry of Interior and Chamber of Commerce of Thailand, who This research article aims to explore found that “Phitsanulok has its own highly regional development policy in lower- capacity and well deserves to be center of northern Thailand, particularly Phitsanulok distribution.” They found that this project Province, through the Indo-China should be steadily supported and promoted intersection (ICI). It will also analyze the in the long run to prepare related benefits and problems of the development infrastructures to fit any changes in the of the project. future. However, the last period of neglect was a huge waste of time and opportunity cost. Another challenging problem is the II. Establishing a Logistics Center for legitimate project director or organization the ICI Project among the Thai government, which should foster, implement, and promote its In 2005, Phitsanulok Province Office progress. Moreover, the Thai Chamber of engaged the University of Thai Chamber Commerce would serve as a tax securitized of Commerce to study and design logistics organization for long container transportation system in the province to accommodate the within this route from one country to any development of the ICI area and the destination in a final route, where a economic growth of the region. The container truck would not be opened until university, as the project consultant, it reached its destination. submitted the final report summarizing the findings as follows: In turn, a regional organization such as the Provincial Chamber of Commerce, 1. A Distribution Center (DC) should could also serve a new role as tax auditor be established in the following phases: assigned by the Thai Chamber of  Phase 1: From 2005 onward, a DC Commerce. At present, a Thai exporter, is established that requires an Nimsiseng, has transported agro-foods to investment of 530 million baht Kunming-Yunnan, China through the R3A with a breakeven period of 8 years route that substitutes the conventional and a yield of 10% in 10 years. In route of Lam Cha-Bang seaport, which this phase, there are three saves its transportation cost and is also appropriate locations, ranging in much faster. The Greater Mekong Sub- order of suitability: Ban Bungpra region (GMS) Ministerial Meeting on 11 89.8%, Ban Tengnam, Hua Ror to 13 January 2000 resolved to set up new sub-district 74.2% and Tha Tong strategy to focus on the East-West sub-district 65.8%. Economic Corridor (EWEC) linking  Phase 2: From 2007 to 2017, the Myanmar, Thailand, Lao People’s DC is developed for multimodal Democratic Republic, and as pilot transportation. project of the GMS (, Myanmar,  Phase 3: From 2012 to 2017, the Lao People’s Democratic Republic, DC is developed as an ICD. Vietnam, Southern China (Yunnan), and  Phase 4: From 2015 to 2022, the Thailand). This area will eventually be DC is developed as an LCS. expanded to Myanmar to complete the economic bridge to link the China Sea 2. The consultant presented two with the Andaman Sea. This will foster the additional parts for the project for the concrete development of the NSEC linking province to consider according to the state

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of readiness and economic conditions, as cost of land and working capital) follows: obtains ISO 9000 or similar 2.1 Phitsanulok’s central and international standard certification fruit market project has potential and within 2 years from its start-up- ability to develop a regional date, otherwise the corporate agricultural market for vegetable and income tax exemption will be fruit, with following activities: reduced by 1 year.  Trade and exchange of agricultural  Exemption of import duty production, exemption on raw or essential  Market information provider, materials used in the manufacturing  Warehouse, of export products for 5 years.  Place for selecting products,  Deduction from net profit of 25  Provide production for exporters. percent of the project’s These measures can be implemented infrastructure installation or and operated in appropriate construction costs in addition to locations, such as in Don Thong sub- normal depreciation, and such district, Muang District where the deductions can be made from the Thai Charoen Market is already in net profit of one or several years operation. within 10 years form the date of first revenue derived from the 2.2 Safe parking-lot project for a truck promoted activity. terminal for travelers to other  50 percent reduction of corporate regions that includes facilities such income tax for 5 years after the as food center, parking lot, shops and exemption period. travel information, service station  Double deduction from taxable and residence for 24 hours. This income of transportation, project can be operated in many sites electricity, and water costs for 10 within the following areas: years from the date of first revenue  Area before Naresuan University on derived from promoted activity. Highway no. 117,  75 percent import duty reduction  South of Naresuan University on on raw or essential materials used Highway no. 117, in manufacturing for domestic sales  Eastern area of Muang District on for 5 years, based on annual junction of route no.11 and 12, approval. (This incentive is not  North of Muang District at Don available to projects in Laem Thong sub-district (Highway no. 11). Chabung Industrial Estate and industrial estates or promoted Furthermore, in terms of policy and industrial zones in Rayong regulation- It focuses on incentives in province.) doing business in the province, for instances; zoned in BOI zone-3: targeted III. Beyond the Go-west Strategy of entrepreneurs will enjoy the following China: Return of ICDI beyond the Rise benefits; of EWEC  Exemption of import duty on machinery. The emergence of an ICI in  Corporate income tax exemption Phitsanulok Province of lower - northern for 8 years provided that a project Thailand during 1990s is another part of with capital investment of 10 China’s regional Go - West policy million baht or more (excluding development. This area of China is

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composed of 12 western provinces; The central region should concentrate Chongqing, Sichuan, Guizhou, Yunnan, on producing energy and raw materials, Tibet, Shaanxi, Gansu, Ningxia, Xinjiang, and certain machinery and electrical Inner Mongolia, Guangxi, and Qinghai, products, including agricultural products. which are home of more than 400 million Likewise, the western region concentrated people. In particular, Yunnan is one of the on , forestry, animal husbandry, main target provinces for the great transport, and selectively develop its transformation of economy and society. energy and mineral resources, including certain local processing industries. The Dengist regional development Therefore, this plan highlighted on strategy may be interpreted as an regional complementarity rather than application of the growth center doctrine regional self-sufficiency (Yang, 1997). within the concept of international competition and an unbalanced development This pilot project started in the 8th to strategy within China. This is most evident 10th Five-Year Plans (FYPs), beyond the in the sixth development plan (or the five- authority of presidency of Jiang Zhemin. year plan), alias the National Economic Additionally, the northern and western Development Plan (NEDP), which had regions are main targeted regions of different levels of economic development development. Initially, the main pilot between China’s coastal and interior areas. project was carried on through the In contrast, the seventh NEDP focused on Quadrangle Economic Cooperation or the interior, which is further divided into GMS Economic Zone comprises Cambodia, the central and the western regions, and the People’s Republic of China (specifically aimed to speed up the development of the Yunnan Province and Guangxi Zhuang coastal region relying on the construction Autonomous Region), Lao People’s of raw materials and energy in the coastal Democratic Republic, Myanmar, Thailand, region, as well as the preparation for and Vietnam. With assistance from the further development of the western region. Asian Development Bank (ADB), these Each region was assigned a special six countries entered into a program of advantage based on its own resource sub-regional economic cooperation that endowment (Dali Yang, 1997, p.10, pp.18- was designed to enhance economic 20). relations. With support from ADB and other donors, the Greater Mekong Sub- Since this plan, the coastal province region Economic Cooperation Program has been urged to strengthen the supports the implementation of high- technological transformation of traditional priority sub - regional projects in agriculture, industries and develop knowledge with energy, environment, health and human technology intensive and high value-added resource development, information and consumer products industries. It would communication technology, tourism, also gradually transfer high energy transport, transport and trade facilitation, consuming and high pollution producing and urban development (ADB, 2018). factories to less developed regions that had This program has forged Thailand’s more or affluent resources (Yang, 1997, regional development policy and its p. 29, referred to Mingzi 1985, Xinjishu determination into the role of China in 1986 and Guangdong Jiuji 1986). ASEAN. The former chairman of Phitsanulok Chamber of Commerce reported that many people in this province

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did not believe that the small intersection before boarding at Danang sea port in in this province could not go further or Vietnam. Moreover, it is a pilot link to other nearby neighboring countries, preparatory project for related facility as stated in its name: ICI (Interview, improvements. In fact, it is in total 105 km 2017). However, in the first decade of the long. However, this project does not have 1990s the ICI development project was funding from ADB but was directly sponsored from Thai Highway department delayed and kept from both the central and totally 900 ฿ million. local authorities thanks to the vagueness of the authorities in signaling the right Phitsanulok has also proven its direction, as well as the lack of budget in capabilities as a capital of the lower- running this kind of mega-project. The role northern region of Thailand. This province of the chamber of commerce in these has high purchasing power: not only provinces was to monitor and send their purchasing power by itself but it also feedback to the related authorities to return purchases powers from nearby provinces this project back to operation again as soon (i.e., Uttaradit, Sukhothai, and Phichit). as possible. The same issue was brought Interestingly, it also has new purchasing back to the headline news in Thailand in power from neighboring countries that 2010. support economic development in this area. Moreover, it is also a center of Even though the concept was education in various levels, especially agreed upon in 1998 at the Ministerial tertiary education as Naresuan University, Conference of GMS in Manila, the which has around 30,000 students and Philippines, this corridor only became staff. This another supportive factor of operational on December 12, 2006. This provincial prevalence. Later, it contributed corridor is created based on a road of to the rise of regional economic integration 1,450 km with the west end at port city of through China’s role in ASEAN region. (Myanmar), crossing Kayin This directly signals the existence of ICDI Division, Thai provinces of Tak, Sukhothai, and related development effects. There are Phitsanulok, Phetchabun, Khon Kaen, various new kinds of business groups, as Kalasin and and Laotian follows: provinces of , Vietnam- Danag city as the east end. Additionally, 1. The establishment of Cambridge from Myanmar it is further connected to Regional College: This is the first India via India – Myanmar - Thailand branch of ASEAN that officially Trilateral Highway which is being opened in September 2011, which upgraded, with most parts already will be the center of international completed. The remaining upgrade will be education in this region in a completed by 2020. coming future- ASEANIZATION within EWEC. This directly redeveloped and 2. The development of Thai nurtured a lagged ICDI project and gave it premier department stores: This a new life of hope. It has changed many is led by Central Pattana Group physical changes in this project, especially (CPN), a premier department store the expansion of No.12 Asian-Highway of Thailand and its well-known (Phitsanulok-Lomsak) from traditional two brand of . It has lanes to four lane High Way to evaluate its opened a Central Plaza department capacity of the bulk logistic and mass store in Phitsanulok, which is the transportation from southern region of biggest branch in this region. China via northeastern region of Thailand Tesco, Big-C and Home-pro are

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also expected to expand its own 5. Center of medicine: Phitsanulok is branch or space to fit with new promoted to be medical tourism life-styles and new high hub in the lower-northern region. purchasing power groups. Once a Interestingly, foreign patients from high-speed train link commences neighboring countries are in Phisanulok, it will also attract gradually coming to the private another leading group to survey its hospitals in this area, especially trade capability: The Mall group. Burmese. This trend will be more 3. Retail auto business groups: Most popular after ASEAN accession. of these are well-prepared for this In addition, the rise of Business big change by investing in Merger between local capital and renovation and opening new central/internal capital. For branches in many sites in this area. example; the BGH buys 70% of Interestingly, the big rental car Rattanavej hospital capital stock, business, Thai rent a car, has which it renames as the ―Bangkok already opened its branch here Hospital Phitsanulok‖. At the with totally 25 ฿ million. same time, Thonburi hospital 4. Housing and property: This group undertook the same concept attracts various leading housing with Inter-vejakarn hospital. Later, brands from Bangkok to set up the most popular leading group as their new projects here. For Bamrungraj Hospital also took example; AP-group has opened its capital stock of Phitsanuvej with new condominium project beyond 51%, which is the first step of ―COO brand‖ with totally its investment in this region. totally 728 ฿ Million (Manager 2014: online). This referred to an Consequently, today this intersection interview of vice-president of would be highlighted to be the landmark of marketing strategy of AP-group economic development of lower-northern about new area of business region of Thailand and also the competition. He said that neighboring countries in the future. Phisanulok is a real center of Therefore, the role of external force as lower-northern region with its full EWEC directly supports the re-emergence capacity as a logistics center. of the ICI and related Economic Therefore, whenever ASEAN accession is completed, it will Development Zones in these areas, directly attract new business especially the increase of China’s power in groups or consumers who have Economic and Societal Development in high purchasing power. Whereas EWEC and also in Guang-Xi Strategy/ CP land has also opened the same Pan-Beibu Gulf Economic Cooperation in project beyond ―Kalaprapruek Nanning since July 2006 onwards. brand‖, which is worth 260 ฿ million. Moreover, it has another project on building new hotel and IV. EWEC in terms of China Strategic rental office in Phitsanulok. The viewpoint: The systematically driven three giant housing groups—Land force & House (L&H) and Saensiri and Supalai group—intentionally took EWEC is not a normal phenomenon some lucrative areas for new but it directly relates to China’s political business opportunities. and economic strategies. China has tried to expand its economic cooperation with

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other members by focusing on ASEAN on carious asymmetric strategies are countries since 2011. Likewise, China’s outside the realm of conventional military 11th five-year plan (2006–2010) focused power. China is playing a different game on the significance of neighboring based on economic investment, trade, countries, especially in ASEAN countries. immigration, and smile diplomacy Previously, China had shown its own (Leonard, 2008, pp. 108-109). As a result, interest in this region by issuing and the first ASEAN Summit has official joining the Treaty of Amity and organized since 2005 onwards. In this Cooperation in Southeast Asia in 2003, aspect, some scholar called this new term before initiating its own new concepts of as “The many facets of Unrestricted security in the following year. Ultimately, Warfare” (ibid) as illustrated in the the new security concept of China based following table.

Table 1: The many facets of Unrestricted Warfare

Military Trans-Military Non-Military . Atomic Warfare . Diplomatic Warfare . Financial Warfare . Conventional Warfare . Network Warfare . Trade Warfare . Bio-chemical Warfare . Intelligence Warfare . Economic Warfare . Ecological Warfare . Psychological Warfare . Resource Warfare . Space Warfare . Tactical Warfare . Regulatory Warfare . Electronic Warfare . Smuggling Warfare . Sanction Warfare . Guerilla Warfare . Drug Warfare . Media Warfare . Terrorist Warfare . Virtual Warfare . Ideological Warfare (Deterrence)

Source: Mark Leonard, 2008: ibid

Strategically, China’s power expansion ―ICI‖ in Phisanulok province - lower- through geographical advantage in northern part (EWBIZ, 2015). engaging with the new countries. Later, Guangxi province was promoted as a new The Guangxi strategy is the main gate to ASEAN countries in 2006, or the key factor of change in these countries in early part of the 11th five-year plan. This is terms of the political and economic primarily a sub-regional mechanism development framework. Most countries involving China’s Guanxi Zhuang of the south highly expect to gain Autonomous region and also the six economic benefit from this mega-project. ASEAN countries: Vietnam, Malaysia, The rise of China since 1989 and its rapid Singapore, Indonesia, Philippines, and progress of economic diplomacy means Brunei. It focuses on the 21st Century that China always plays its own strategy Maritime-Silk Road in enhancing the towards the South-landlocked areas, China-ASEAN networks for port especially Yunnan province as the gateway cooperation and building a new rail-sea to Southeast Asia and South Asia. track corridor. It has held 10 fruitful Therefore, China has been a sole key forums (China Report ASEAN, 2018, economic player in this region through p.30). Consequently, the other land-bridge GMS Economic Cooperation since the project has been initiated and established 1990s. Ultimately, China can reach and as EWEC in 2006 beyond the name of the connect the west and east coasts for its own economic benefits in the long run.

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Thailand is the only one country that is 1. Industry: the government reward located in the middle of China’s strategy. funds will offer rewards to major industrial projects. Under the framework of ACFTA and Strategic Partnership Agreement, China 2. Taxes: additional tax exemptions enhanced the momentum of the regional will be applied from 2008 to 2010 cooperation by organizing every year in to enterprises which have already Nanning China-ASEAN Trade Fair and enjoyed preferential tax policies. China-ASEAN Business & Investment Summit. Then they came to propose the 3. Land use: major industry projects Pan-Beibu Gulf Economic Cooperation at that are in line with national the Forum on Pan-Beibu Gulf Economic policies on industry, environment Cooperation in Nanning in July 2006 protection requirements and land (Hosokawa, 2009, p. 9). These are main supply policies will be prioritized objectives of Pan-Beibu Gulf Economic in the annual land-use plan. Cooperation: 4. International economic 1. Pan-Beibu Gulf Economic cooperation and foreign trade: the Cooperation would play an policies and regulations permit important role in future of speeding foreign funded enterprises to up the construction of China- expand their business scope and ASEAN free trade area, integrate conduct cross-industry operations. the economy and promote social and economic development in the In China’s intention, there are many countries involved. things would like to achieve (Hosokawa 2009, pp.5-6), as follows: 2. To enhance exchange and coordination and include the new  China as well as Guangxi Region Pan-Beibu Gulf sub-regional wishes to develop coastal area of cooperation in the framework of Beibu Gulf by economic the construction of China-ASEAN cooperation with neighboring free trade area. regions and countries.  Development of Guangxi can 3. Pan-Beibu Gulf Economic promote Western Development of Cooperation would be a China through the fact that supplement of the existing sub- Guangxi is the only region which regional cooperation mechanism, has ocean ports. Development of such as the Great Mekong River ports in Beibu Gulf and transport Sub-regional Cooperation. infrastructure to the ports from Chongqing or Kunming facilitate In January 2009, Guangxi Zhuang the export of products in these Autonomous Region released the ―Policies inner western regions. and Regulations on Promoting the  It serves as a platform for ASEAN- Opening-up and Development of the China Free Trade Area ACFTA. Guangxi BGEZ.‖ Preferential policies China has been seeking to were issued in seven major categories strengthen political and economic including as follows: relationship with ASEAN countries. In economic field, it is agreed between ASEAN and China that ACFTA shall be formed by

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2010 by 2015 for Indochina Economic Cooperation. The basic countries through abolishing structure of this community will be customs duty. China expects to made of Chinese economic facilitate its export and investment network between Chinese in China trade much more. Pan-Beibu Gulf and pro-Chinese in ASEAN area is the place where the countries including overseas agreement shall be applied and its Chinese. benefit shall be enjoyed.  Pan-Beibu Gulf Economic To achieve these aims, China also sets Cooperation is an initiative with its own plan to serve both its short- and ASEAN where China can have a long-term plans. Therefore, we can learn leadership. GMS is another means from these (Hosokawa, 2009, pp.4-5), for China to work with ASEAN. as follows: Nevertheless, GMS is led by ADB and China can play the role as one 1. The short-term targets for 5 years participating country. China (2006–2011) expects to create the relationship  To build the regional cooperation with ASEAN in its own way by mechanism and the platform, Pan-Beibu Gulf Economic which are efficiently and Cooperation. influentially managed.  China needs sources of energy and  To establish the basic networks of natural resources for its sustainable land, maritime and air traffic economic development. It is between China and ASEAN by apparent that China looks for oil improving the traffic infrastructure. and mineral resources in ASEAN  To make human traffic and trade of countries in Pan-Beibu Gulf goods convenient between China Economic Cooperation. and ASEAN.  China also needs a peaceful and  To make efforts for establishing a friendly environment for its mechanism in forming Beibu Gulf sustainable economic development. Economic Zone (BGEZ), and for There still exist the disputes on getting remarkable progress and sovereignty of South-China Sea, outstanding results in some especially on the Spratley Islands concretized cooperation projects among China and ASEAN between China and Vietnam. countries including Vietnam, the  To aim to complete a basic tourism Philippines. China has been zone in Pan-Beibu Gulf. To plan to strengthening its navy to force its prior develop the Guangxi BGEZ. claim on the territorial issues. There continues to be some 2. The long-term targets for 10 to 20 collision in the South-China Sea years (2016–2026) between Vietnam and China. So,  To build the regional three- China expects to dissolve the dimensional traffic network with perception ―Threat of China‖ well-equipped land, maritime and prevailing in ASEAN countries air traffic infrastructure. through Pan-Beibu Gulf Economic  To build the Pan-Beibu Gulf Port Cooperation. League, which has a well-  China seems to try to establish developed merchant service, a East-Asia Economic Community good role sharing and cooperation. EAEC by its initiative and  To build the relatively developed leadership through Pan-Beibu Gulf Pan-Beibu Gulf Tourism Zone.

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 To build the pro-ecologic region in to establish a newly economic which the maritime resources and growth zone in the West bank of ecologic environment are the Pacific Ocean. efficiently protected, and the harmony between economy, As a result, there are now many land- society and natural environment are bridge megaprojects in Thailand and kept and sustainable development nearby neighboring countries, both NSEC is viable. and EWEC, which are the result of China’s  To build the logistic base, trade power through the Guangxi Beibu Gulf base, processing manufacturing Economic Cooperation in Guangxi base and information center for (BGEZ). This framework is shown in Pan-Beibu Gulf Economic Figure 2. Cooperation in Guangxi BGEZ.  To build the harmonious, reciprocal, and highly unified Pan- Beibu Economic Community and

Figure 2: Strategy of Guangxi BGEZ

Other than a big scope of BGEZ, we the southern part of China-Yunnan can analyze solely on EWEC and find that province is a landlocked area. China has the rise of EWEC through China’s power played its role through GMS Economic is the main key factor to run this mega- Cooperation to nearby countries since project. Therefore, the superiority of 1989 as the first project initiation. Later, Thailand is that it stays in the middle of during 1990s China’s FTA was expanded ASEAN as the focal point of economic with other ASEAN countries to gain from and political powers in this region. Also, trade and new economic partners

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(Hosokawa, 2009, pp. 5-7). Consequently, (Wiboon, 2012, pp. 20-21). These are the Guanxi Economic Strategy through shown in Figure 3. BGEZ has been established and integrated with the Quadrangle Economic Cooperation  M1 = Mainland Economic Cooperation, or GMS Economic Zone. In the second  M2= Mekong Sub-region phase, the Guangxi strategy mainly focus Cooperation, and on opening the gate to ASEAN country by  M3 = Marine Economic using ―One axis, two wings strategy.‖ Cooperation. This is also called ―3M principles‖

Figure 3: One Axis, Two wings strategy (small scale)

Moreover, two wings can be viewed and categorized into two sides (as Figure 4).

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Figure 4: One Axis, Two Wings strategy (big scale)

From these two figures, it can be seen getting others to want the outcomes that why China tries to promote their presence you want - co-opts people rather than in the global stage, especially in the new coerces them (Nyre Jr., 2004, p.5). form of big sponsor for megaprojects in any countries around the globe. The rise of This concept is also used in the China since 1989 has been in the new form business world through smart business of economic diplomacy that mainly executives whose leadership is not just a composes of economic and political matter of issuing commands but also aspects. Interestingly, it varies depending involves leading by example and attracting on the fertility of the raw materials and others to do what you want. Naturally, it is natural resources that China requires difficult to run a large organization by Wiboon, 2013, p.18). commands alone. The influence of soft power in any countries primarily depends Interestingly, a world - renowned on the following three resources (Nyre Jr., political scientist, Joseph Nyre, Jr., calls 2004, p.11): this as a means of success in the world  Its culture: in places where it is politics in searching for a new alliance attractive to others. based on some attractive agenda, which is  Its political values: when it lives up called “soft power.” Moreover, not just in to them at home and abroad. purely political issues but also in related  Its foreign policies: when they are business issues, he said soft power is seen as legitimate and having more viewed as ―the second face of power‖ or authority. the indirect way to get what you want. A country may obtain the outcomes it wants Importantly, culture is a set of values in world politics because other countries and practices that create meaning for admire its values, emulate its example, society. Because a country’s culture aspire to its level of prosperity and includes universal values and its policies openness, and want to follow it. Hence, it promote values and interests that others has to set agenda and attract others in share, it increases the probability of global politics. We can conceptualize it as obtaining its desired outcomes due to the

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relationships of attraction and the created Commerce is only one of many ways duties. Hence, narrow values and parochial in which culture is transmitted. It also cultures are less likely to produce soft occurs through personal contacts, visits, power. While others look at soft power as and exchanges. These represent through a popular cultural power, they make the the ideas and values that US exports in the mistake of equating soft power behavior minds of more than a half a million foreign with the cultural resources that sometimes students who study in American help produce it. They confuse the cultural universities every year and then return to resources with the behavior of attraction. their home countries. Likewise, in the For example; Coke and McDonald do not minds of Asian entrepreneurs who return necessarily attract people in in the Islamic their home after succeeding in New York world to love the United States. Or or Silicon Valley, tend to reach elites with excellent wines and cheeses do not power. Similarly, in trying to persuade guarantee attract people to France. other world leaders in any regions all the However, we cannot deny the role of globe to change their policies and be more popular culture as a resource that produces supportive of Americans in any measures, soft power. Therefore, the effectiveness of it probably helped that he/she could hear any power resource depends on the from a network in that country. In the context. same way, both government policies at home and abroad are vital potential sources of soft power. The interaction of power in world and also Chinese political economic interactions are summarized in Table A:

Table 2: Interplay of three powers in global politics

Type of power Behaviors Primary currencies Government policies Military Power Coercion Coercive diplomacy (Security) Deterrence Threats War Protection Force Alliance Economic Power Inducement Payments Aid Coercion sanctions Bribes Sanctions

Soft Power Attraction Values Public diplomacy Agenda setting Culture Bilateral & multi- Policies lateral diplomacy Institutes

Source: Joseph Nyre, Jr.; p.31

Since July 1991, China has dialogue in the region. When the first attended ASEAN's meeting for Foreign summit meeting of ASEAN+ 3 including Minister as an observer, where China Japan, China, and South Korea in Kuala started diplomatic relations with ASEAN. Lumpur in December 1997, the first At the same time, China participated in summit meeting between China and ASEAN Regional Forum (ARF), which is ASEAN was also held and the ―Joint the mechanism to guarantee the security Declaration of ASEAN and China on Good

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- Neighbor and Friendship Partnership ICI - New Economic Zone, includes urban towards 21st Century‖ was signed. regeneration and planning. This not only focuses on economic development issue After 2000 the China - ASEAN but also focuses on social development and relationship has rapidly become closer and urban governance. This strategy is initiated has enlarged. In November 2002 ―the by many stakeholders in drafting and Framework Agreement on Comprehensive promoting urban development and Economic Cooperation‖ was signed. This management, composing of Phitsanulok agreement prescribes the comprehensive Chamber of Commerce, Council of economic cooperation between China and provincial Industry, Tourism Business ASEAN under the framework of ASEAN- Association associate with Phitsanulok China Free Trade Agreement ACFTA. Good Provincial Administrative Organization - Neighbor and Friendship Partnership (PPAO), Phitsanulok Municipality, Declaration of 1997 was progressed in ATSME and Phitsanukok Council of October 2003 to Pan - Beibu Gulf Farmers. Economic Cooperation (Hosokawa, 2009, pp. 3-4). The “Joint Declaration of ASEAN Most of them officially declare that it and China on Strategic Partnership for is time to implement and promote the new Peace and Prosperity” declares the China- holistic strategy of provincial development, ASEAN comprehensive cooperation in which is called “Phitsanulok 2020: Indo- politics, security, economy, society, and China Intersection (ICI) New Economic international relations in Asian Region. Zone.” This also directly fits with new urban development plan. To follow related The 11th five-year plan initiated the economic cooperation and development new forum as the China-ASEAN strategies as described by ACMECS in its FTA(CAFTA) as the implementation of GMS strategy, the development in lower- the early harvest program in the previous northern region is a main issue of the 11th 2004, which commenced and upgraded the Thai National Economic and social CAFTA in aiming to expand trade to the Development Plan (NESDB). It should be $US 1 trillion by 2020. Interestingly, reconciled and promulgated related issues China has enjoyed some extraordinary to become a pilot development project. In years of growth with its trade partners. In addition, the Thai government released its 2017, CAFTA reached $US 514.8 billion, infrastructure development for supporting whereas the two-way investment totaled continued transport with logistic and $US 200 billion. In addition, China has supply chain development, called remained the largest trading partner of ―Pitsanulok Multimodal Transportation ASEAN for nine consecutive years. While Center within 2020,‖ as well as a a high- ASEAN has remained China’s third largest speed train (Bangkok - Chiang Mai) trading partners for seven years in a row together with a railway transportation (China Report ASEAN, 2018, p. 30). center between the route of Paknampoe- Denchai. These committees willingly approve this government policy and its V. Phitsanulok 2020: Towards Future positive impact for future development in Development and Sustainability the long run.

The emergence of EWEC since Therefore, they form various active 2009 has been accompanied by many working teams by integrating diversified changes in Phitsanulok and nearby areas, development issues to cluster within especially in Phitsanulok City. The new related dominant development issues to strategy, which is called Phitsanulok 2020: fulfill the ultimate goal of regional

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development in this crucial transitional zone, especially in Bung Phra area period. This mainly focuses on pushing where it is likely to be promoted as Phitsanulok to become an economic and a center of high-speed train. service center, particularly in logistics and supply chain, distribution center, and Conversely, in response to the natural tourism by systematically annexing transformation from the great external this macro-scope of development plan with force, provincial authorities or local holistic urban development plan with the governments, and related stakeholders following issues: have delayed in their actions even though 1. Initiated project of multi-continued they know what is going to be in the near transportation in Phitsanulok, future in their areas. Regrettably, the active 2. Mass transportation development, role of both central and local governments 3. Commercial and economic center, is vague in driving any pilot projects rather 4. Regional commercial and logistics than the private sectors, especially the center- Ban Bung Phra, proactive actions of the chamber of 5. Innovative food industry and commerce in systematic planning and agricultural development zone, implementing related steps of actions. 6. Innovative research and production Therefore, these related development center, zones were left to business speculation by 7. Convention and exhibition center. some business groups for many years.

In fulfilling the goal of ASEAN Hopefully, the pilot project would be ization, the committees willingly propose initiated through practical and academic some suggestions to Thai government in projects, such as LIMEC (Luang-Prabang- declaring Phitsanulok would be a new Indo – China - Malamyine Economic economic zone by issuing various Corridor) by the school of Logistic and supportive means and regulations: Supply Chain-Naresuan University. This is 1. Support Phitsanulok to become a an economic corridor that most sectors or new economic zone by providing stakeholders in the first lower-northern rights and benefits for investors region of Thailand in collaboration with with the same regulations as other Luang - Prabang and Xaiyaburi of Lao special economic zones in the rest PDR, the Karen state of Myanmar in of the country. official inauguration in 2015 by promoting 2. Support Phitsanulok to become a this route as the gateway to their nearby new economic zone by providing world heritage sites at Wat Xiang Tong of rights and benefits as tax Luang-Prabang, Queen Sirikit Dam of inducement or grace period of Utttaradit, Phu - Hin Rongkla and Thung payback for some investors who salaengluang National Park of Phitsanulok, are responsible for investing in The Sukhothai and Srisatchanalai Heritage infrastructure at the time given in sites of Sukhothai, and Rimmoei Border the contract. Market in of Thailand before 3. Upgrade some areas in a city to further connecting to the Lay down become regional commercial and Buddha Image of Win - Sein Dawya of logistics center, as well as Malamyine in Myanmar (as shown in innovative research and production figure 5).

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Figure5: LIMEC

Source: limecthailand.com

Alternatively, another sub-economic the international standards. It is also a main corridor could merge these nearby cities linkage and transit point. Therefore, the where they share nearby borders, direct investment of the government and especially the dominant cultural resources. the joint-venture of private sectors in these A new economic and social development provinces are the key supportive issues. platform run by the Provincial Chamber of Commerce and also their federation of The provincial airports at Phitsanulok industry has been introduced in these five and Tak have been upgraded to provinces (i.e., Phisanulok, Sukhothai, international airports, including the Phetchabun, Uttaradit, and Tak) to construction of a new airport for Tak promote their business opportunities, as province (Location-2). Also, modals of the well as matching related business between linkages within the sub-region highlight sectors, provinces and among their groups. railway transportation, especially in the These areas are all world heritage sites extension zone of Tak-Sukhothai- (LIMEC, 2018, Interview). in further transport facilitation, as well as connection to the high-speed rail of To drive regional economic Myanmar and India in the near future. The development, around the year end of 2017 logistic and supply chains of goods and at the special ministerial meeting at services in the WEC will soon be further Phitsanulok led by the Prime Minister transported to the India-Myanmar railway Prayut Chandra-Ocha there was an official networks (Oknation, 2017). discussion on the pilot project of this region, especially in these three lower- VI. Conclusions and Recommendations northern provinces of Phitsanulok, Sukhothai, and Tak to drive the development zone of the Western The rise of EWEC is a turning Economic Corridor (WEC) as a parallel point of Phitsanulok and related lower- economic zone and fulfill the EEC northern region that directly comes from (Eastern Economic Corridor), which is a the role of China’s power as a main key pilot mega-project proposed by this current factor to run this mega-project. Moreover, government (Oknation, 2019). In addition, Thailand is a focal point of this big its main goal is to become the regional change. Consequently, it is likely to be the center for trade and investment through focal point of economic and political infrastructure investment and the powers in this region. In addition, the comprehensive urban planning in achieving southern part of China-Yunnan province is

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the landlocked area. China plays its role because it can directly drive its economic and through GMS Economic Cooperation to social development towards sustainability in nearby countries since 1989 as the first the long run. Even the economists who are project initiation. Later, during the 1990s, interested in advanced economic theory the expansion of China FTA with other mainly rely on the scientific method ASEAN countries expanded the gains through mathematical and statistical from trade and new economic partners solutions. But in reality most related (Hosokawa, 2009, pp. 5-7). economic policies stem from the process Consequently, Guanxi Economic of negotiation, as well as institutional Strategy through BGEZ was established factors or issues. Therefore, we actually and integrated with the Quadrangle could not separate economic issues from of Economic Cooperation or GMS Economic societal or political issues as theoretical Zone. Therefore, the second phase of the proof—they are both two sides of the same Guangxi strategy mainly focuses on coin (Teh-Chang, Lin, 2018, interview). opening the gateway to the ASEAN countries by using ―One axis, two wings Crucially, Thailand is in a transitional strategy,‖ which is also called ―3M period of change in its economic and principles‖ (Wiboon, 2012, pp. 20-21). social development. However, for more Consequently, the return of ICI in than five decades it has focused on Phitsanulok is the result of EWEC economic growth more than structural emergence since 2009. change and related issues. Thailand strongly believes that whenever economic It is crucial to review the Thai growth is strong, social development will conventional development policy also gradually develop. These ideas reflect determination, which is mostly based on the fact that it believes in neoclassical Western viewpoint without any economic theory, which conceptualizes the comprehensive or integrated approach agents—households and firms—as rational from their thoughts to the actions. China’s actors. Agents were modeled as optimizers rise in this new century mainly focuses on who were led to "better" outcomes. The multi - faceted strategies rather than resulting equilibrium was "best" in the conventional security as we have known it. sense that any other allocation of goods Therefore, sustainability to balance and services would leave someone worse economic and social quality as part of a off. Thus, the social system in the comprehensive plan should be highlighted. neoclassical vision was free of unresolvable conflict. The Thai economic development paradigm has always viewed this regional The very term "social system" is a economic development as a development measure of the success of neoclassical paradigm and common practice without economics because the idea of a system, looking to geo - political and economic with its interacting components, its factors to improve its effective strategic variables and parameters and constraints, development plan and its applications. is the language of mid-nineteenth-century physics. This field of rational mechanics was the model for the neoclassical Consequently, the lack of geo- framework: agents were like atoms; utility political and geo-economic factors, as well was like energy; utility maximization was as interdisciplinary perspectives in the like the minimization of potential energy, current world are the main issues for Thai and so forth. This was the rhetoric of technocrats and related stakeholders successful science linked to the

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neoclassical theory, and in this way local communities by global economics became linked to science itself corporate bureaucracies. (Weintraub, 2015). These elements are the key issues that The alternative economist, Ha - Joon we have learned from these limitations to Chang, described that ―Neo-classic is too prepare and set up any possible solutions accepting of the status quo by analyzing to achieve both economic and social individual choice, it accepts as given the development towards sustainability. To underlying social structure-the distribution survive in the era pf globalization, we of money and power, if you will. This should respect the following core makes it look at only choices that are principles (Monder & Cavanagh, 2004, possible without fundamental social p. 103-104). changes‖ (Chang, 2014, p. 126). This development paradigm supports the 1. International trade and investment globalization model. Actually, it is systems should respect the composed of eight key elements of the legitimate role of democratic world economy today (Monder & government at all levels and should Cavanagh, 2004, p. 34). focus on the civil society in doing anything that affects their well- 1. Promotion of hyper-growth and being by working through unrestricted exploitation of transparent democratic process environmental resources and new involving the participation of all markets to fuel growth. levels of governments and other 2. Privatization and commodification related stakeholders. Participation of public services and of remaining of the most vulnerable stakeholders aspects of the global and is especially important. community commons. 3. Global cultural and economic 2. International trade and investment homogenization and the intense systems should safeguard the promotion of consumerism. global commons and respect and 4. Integration and conversion of promote human rights, the right of national economies, including workers, women, indigenous some that were largely self-reliant, people, and children: any to environmentally and socially international agreement on trade harmful export-oriented and investment should properly production. support such local and national 5. Corporate deregulation and regulation. unrestricted movement of capital across borders. 3. International agreements should 6. Dramatically increased corporate support the goal of creating concentration. sustainable societies: it must 7. Dismantling of public health, follow the UN Sustainable social, and environmental programs Development Goals (SDGs) to that are already in place. serve both local, national, and 8. Replacement of traditional powers international levels. of democratic nation-states and

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Interview: The-Chang, Lin. Interviewed. Institute Master Program of Public Wirot Jirattikanchoti. Interviewed. School Administration (IMAPA), National of Business-Naresuan University: Sun Yat-Sen University, Taiwan: July 5, 2018. October 14, 2019.

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