Financial Cooperation under the Belt and Road Initiative: Implications of Thailand's Economic Security

Abstract

The Belt and Road Initiative (BRI) is one of the most crucial foreign policies of the
People’s Republic of China under President Xi Jinping’s leadership. It is considered as
both opportunities and challenges for countries along the BRI routes. Thailand, although
not geographically located in the BRI routes, is expected to be inevitably affected by
the Initiative. This issue is, therefore, challenging in terms of policy implementation.
The study on the impacts of the BRI will be useful for policy design to strike a balance
between benefits and risks on the country’s economic and financial security.
This study was conducted on a qualitative-based research and its objectives
is threefold, (1) To compare and contrast the BRI with other multilateral cooperation
frameworks, (2) To analyze the benefits and impacts of the BRI over regional and
Thailand’s economy and (3) To provide policy recommendation to cope with the
impacts from Thailand’s participation in the BRI. the content of this study is confined
to financial cooperation under the BRI. Analysis of the result of this study is based on
literature reviews and in-depth interviews with 12 economic and financial experts.
The study revealed that there are many differences between the BRI and other
multilateral cooperation frameworks in many respects. Despite covering many dimensions
of economic integration, the BRI tends to put more emphasis on physical connectivity.
This helps to facilitate the expansion of China’s economic influence in Asian, African
and European regions. It is found that the BRI provides Thailand and regional countries
with economic opportunities in many aspects. This is especially the case for Thailand
where it is strategically located in the heart of mainland ASEAN and CLMV and its attempt
to integrate the country’s Eastern Economic Corridor (EEC) to form an integral part of
the BRI routes. Potential negative impacts which are considered major risks to the host
countries include the influx of Chinese businesses to intensify the competitions
against local businesses. Thailand should enhance local businesses’ capability and
competitiveness and be prepared for the increased financial liberalisation in a more
strategic manner. Also, proper financial regulations should be put in place to reduce
the risk of financial volatility as a result of deeper financial integration under the BRI.
Thai people should learn and have profound understanding on how China carries out
its policy strategies in the host countries to minimize risks and maximize economic
benefits out of the BRI.