During the official visit in December 2011, Chinese Vice Premier, Xi Jinping met the Thai Prime Minister Yingluck Sinawatra. The three day visit was aimed at cementing the traditional friendship and promoting pragmatic cooperation.

This begs few questions: What did China and Thailand achieve out of this high level visit? Why did the visit take place now and what will be the future trajectory in China-Thailand relations?

China and Thailand enjoy a long standing relationship over thirty six years.

Their relationship in the past has testified that China-Thailand ties serve as a model for peaceful co-existence, mutually beneficial cooperation and common development. This visit was a major diplomatic initiative strengthening the bilateral ties and has opened a new chapter in their traditional friendship. During the visit the two nations signed a numerous documents on strengthening cooperation in trade, justice, disaster management and other areas.

Thailand became the first country among ASEAN to sign a Plan of Action for the twenty-first century with China

and to establish strategic cooperative relations with China and to sign a zero tariff agreement on trading vegetables and fruits.

This visit is significant for Thailand because the Chinese Vice President placed a four point proposal to promote China-Thailand relations, emphasizing the need to elevate their strategic cooperation to a higher level, enhance high level exchanges, add impetus to the growth of bilateral ties and to deepen their cultural exchanges.

The most important was the currency swap deal between the Bank of Thailand and the People’s Bank of China, worth 70 billion RMB to strengthen trade and investment. This agreement will permit Thai and Chinese exporters to settle their trade deals in their own currencies, thus decreasing the influence of US dollar in their trade. This agreement will last for three years and will be extended by mutual consent.

via China and Thailand: Analyzing Xi Jinping’s Visit by Teshu Singh.