Prasarn Trairatvorakul: Economic and financial cooperation between
China and Thailand
Opening remarks by Dr Prasarn Trairatvorakul, Governor of the Bank of Thailand, at the
Luncheon to inaugurate the Bank of Thailand Beijing Representative Office, Beijing,
6 April 2012.
* * *
Your Royal Highness (Princess Maha Chakri Sirindhorn),
Your Excellencies,
Distinguished Guests,
Ladies and Gentlemen,
The Bank of Thailand is humbly grateful to Your Royal Highness Princess Maha Chakri
Sirindhorn for graciously presiding over this Luncheon to inaugurate the Bank of Thailand
Beijing Representative Office. The Bank of Thailand is privileged and honoured to celebrate
this auspicious occasion at the Residence of the Ambassador of Thailand here in Beijing
among a group of honored guests who have been part of the long-standing Sino-Thai
relations.
Today's event provides a unique opportunity to celebrate not only the present achievements,
but also to pay tribute to history of the friendship between China and Thailand that has
spanned over 700 glorious years since the Tang Dynasty and the Sukhothai Era.
Our cooperation first began in the form of trade, which remains to this day the strongest tie
between our two nations. Along with the flows of trade from China came the cultural heritage,
which is why our cultural linkage is deeply rooted - in all aspects of the arts, culture and
cuisine.
Your Royal Highness,
Ladies and Gentlemen,
The long-standing relations between our two economies have provided a solid foundation
that shaped our modern economic and financial relationships.
Trade value between our two countries has grown tremendously over the last decade. With
the highest growth recorded among our major trading partners, China has now become
Thailand's largest export destination and the second largest trading partner.
For more than 30 years, Thai businessmen have invested in China and I understand that we
are the first of the ASEAN countries to invest in China. Chinese investment in Thailand has
also increased significantly and China is now the fourth largest foreign investor in Thailand.
Thai commercial banks have long had a presence in China to better respond to the needs of
their customers in China, namely Bangkok Bank, Kasikorn Bank, and Krung Thai Bank.
Likewise, Bank of China and ICBC, the two largest Chinese banks, are already operating in
Thailand.
In addition to these bilateral relations, our cooperative spirit has also extended to the
multilateral frameworks. Please allow me to name just a few important ones. related to the
economic and financial cooperation.
The first is the ASEAN, China, Japan and Korea or ASEAN+3. Significant achievements
under this forum include the Chiang Mai Initiative Multilateralization which pool resources
within the region to safeguard against risks and volatilities, and the setting up of the
ASEAN+3 Macroeconomic and Research Office or AMRO to act as a surveillance unit for the
region.
The other is the Executives' Meeting of East Asia-Pacific Central Banks or EMEAP, which
have helped develop the capital market in the region through the establishment of the Asian
Bond Fund and many other initiatives.
The increasingly important role of China to the Thai economy and financial system has
brought about the need for broader and deeper understanding of the Chinese economy and
a more proactive response from public agencies, including the Bank of Thailand, to seek a
presence in China.
Your Royal Highness,
Ladies and Gentlemen,
Following the initial foothold in the form of two representative offices in New York and
London twenty years ago, the Bank of Thailand recently established a representative office
here in Beijing. The Beijing office is our first representative office in Asia. I also believe that
we are the first central bank from the ASEAN region to have its representative office in
China.
But, being the first is not the only measure of success for our journey here. Since its
establishment last year, our Beijing representative office has fulfilled its objectives to further
promote closer ties between the Bank of Thailand and the People's Bank of China, as well as
other Chinese government agencies. The office also aims to sharpen its focus and first-hand
understanding of the economic and financial developments in China.
This achievement is well-illustrated by the deepening financial cooperation between China
and Thailand. In December last year, the People's Bank of China and the Bank of Thailand
concluded the bilateral local currency swap arrangements during the visit of Vice President
Xi Jinping to Thailand. The Agreement provides for the exchange of respective local currency
upto 70 billion yuan or 320 billion baht, to facilitate bilateral trade and investment. I believe
this is a crucial role that the public sector can provide to give assurance to the private sector
on the availability of their access to the yuan and the baht for their trade and investment
needs.
In addition, the Bank of Thailand received approval from the People's Bank of China and
China Securities Regulatory Commission to participate in the interbank bond market and
securities market here in China. Our investment would allow our asset allocation and
diversification to better reflect the increasingly important role of the yuan in international
monetary system.
Last but not least, I hope that the inauguration of our Beijing representative office will be
more than just another success story. I truly hope that the spirit and friendship behind this
long-standing relations and successes, nurtured earnestly over centuries, will continue to
serve as solid foundations that will lead to even greater and closer future cooperation
between our two nations.
Let me end by thanking everyone for being an important part of this success. And, with Your
Royal Highness' permission, may I propose a toast to future success and cooperation as well
as to your Royal Highness's good health and prosperity.
Thank you.