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People's Daily Online>>Foreign Affairs

Interview: Thailand forges stronger financial ties with China


09:00, April 19, 2012

BANGKOK, April 18 (Xinhua) -- Thailand is forging stronger financial ties with China to accommodate rapidly growing bilateral trade and engagement between the two countries' private sectors, Prasarn Trairatvorakul, governor of Thai central bank, said Wednesday.

Prasarn, governor of Bank of Thailand (BOT), has achieved more in Sino-Thai financial relations than most of his predecessors. Under his leadership, BOT signed a swap deal with People's Bank of China (PBC), included Chinese yuan in Thai foreign reserves and opened a representative office in Beijing.

Being a Chinese descendent, the governor wrote his Chinese name "Zhang Xu Zhou" on his business card in handsome characters before an interview with Xinhua. He said his bond with China served as a support factor in enhancing Sino-Thai financial cooperation, but the main driving force for closer ties is the natural progression of economic reality.

"China is already the regional center of production network, where Thailand is part of the supply chain. It is also the largest trade partner of Thailand -- the largest export destiny and the second largest source of import. And bilateral trade is growing fast," Prasarn said.

Sino-Thai bilateral trade for the first quarter of 2011 reached 15.7 billion U.S. dollars, up 66 percent year on year. The two countries have pledged to increase annual bilateral trade to 100 billion U.S. dollars by 2015.

"The bilateral swap agreement of 70 billion yuan, signed at the end of 2011, between PBC and BOT is a reflection of the commitment between the two central banks for the use of yuan for international settlement. It's an indication to the private sector, particularly commercial banks that if they want yuan liquidity, they can resort to central bank, at least as a last resort,' Prasarn said.

Thailand's reserves should reflect the significance of China's role in its economy. But BOT also recognize the need for gradual evolution as China's policy is to internationalize yuan step by step, he added.

"Lately the Chinese authorities have been expanding the channels for foreign investors, we were also approved to be able to invest in both the exchange and the inter-bank bond market. So gradually we invested part of our reserve in yuan," Prasarn said. Thailand got quotas of 300 million U.S. dollars on China's security market and 1 billion U.S. dollars for China's inter-bank bond market.

Last week, Beijing became the third city to have a BOT overseas office after New York and London. "Beijing is not a big international financial center yet. But we anticipate China will be a very important world financial market in the future." The office represents BOT to coordinate work with Chinese authorities, Chinese commercial banks with business in Thailand and Thai commercial banks in China.

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