China aims to strengthen commercial ties with Mekong region countries by installing a free-trade zone covering north-western Laos and northern Thai ports on the Mekong River.
The free-frade zone covers north-western Laos
In the planned zone, Beijing will waive tariffs and value-added tax on imports from countries that do not share a border with China.
“This is the first time that China has offered special privileges via border trade to have closer ties with the Mekong countries and finally to the whole of ASEAN,” said Danaitun Pongpatcharatorntep of Chiang Mai University’s China Intelligence Centre.
President Xi Jinping vowed last week to import $40 trillion worth of goods and services over the next 15 years — a figure that includes products from Mekong nations. China’s move to boost commercial ties in the Mekong region appears to be a way to mitigate the fallout from the trade war with the United States.
Chinese cargo boats in Chiang Khong, Thailand
China has poured $1.7 million this year into the Lancang-Mekong Cooperation — an initiative proposed by Thailand to develop the region.
The cooperation came up with the idea of extending the China-Laos border free-trade zone to the Thai-Laos border, which appears to cover all of Luang Namtha and Bokeo provinces.
Oramon Sapthaweetham, director-general of Thailand’s Trade Negotiation Department, said the trade zone will cover an area stretching from the southern Chinese border district of Mohan to Chiang Khong in far north of Thailand.
China has already signed a memorandum of understanding with the Laotian government to study a project to shorten travel times on the R3A highway that links Kunming, Chine with Houay Say in Laos and Thailand’s Chiang Khong.
Beijing also intends to use the project to capitalize on growing demand for cross-border e-commerce.
The Chinese government has built up such facilities and logistics infrastructure with a one-stop customs services in Mohan and other locations along its southern borders.
“Thailand is also interested in developing its e-commerce in Mohan and is about to set up Chiang Mai as an e-commerce hub aiming to export more products to southern China,” Oramon said.
She said the free trade zone will also be a way for Thailand and the Mekong countries to profit from China’s flagship Belt and Road initiative by exporting into the European market via China’s western border with Kazakhstan.
Source: Chiang Rai Times
