Opinion: Exploring the close ties between Thailand’s CP Group and the Chinese Communist Party

“The Chinese people will never allow foreign forces to bully, oppress or enslave us. Whoever nurses delusions of doing that will crack their heads and spill blood on the Great Wall of steel built from the flesh and blood of 1.4 billion Chinese people.” – Xi Jinping’s speech at CCP’s 100th anniversary

Xi Jinping’s address at the CCP’s 100th Year anniversary is as much a message of defiance as it is a threat. It is a clear message to the rest of the world that China’s rise is inevitable and that China still clearly remembers the days of foreign occupations. Perhaps it is not that surprising that the memories of foreign occupation are still fresh in China’s mind. After all, Hong Kong was only handed back to the Chinese from the British in 1997.

However, as China continues to rise economically, militarily, and politically, Beijing has becoming increasingly aggressive in her quest to wrestle political hegemony away from the United States in Asia and Southeast Asia. To the Middle Kingdom, the area basically constituted her “backyard.”

Projects like the Belt and Road initiative have been introduced to much fanfare accompanied with military expansion like those in the South China Sea to show both China’s soft and hard edges.

As countries in ASEAN and the United States ponder China’s growing domination, the Thai government under Prayut Chan-ocha’s premiership curiously chose to side with China and detach itself from the United States. The clearest proof can be seen in Prayut’s recommendation of the book “The Governance of China” by Xi Jinping to his cabinet and ministers in 2017. In fact, Prayut welcomed Chinese Premier Li Keqiang in 2019 with a speech comparing Thailand to a little ant that can be helpful to a mighty lion. It seems rather ironic for someone who prides himself as a domineering soldier to so readily embrace the idea of Thailand becoming China’s vassal.

CP’s Influence

So where does Thailand’s largest conglomerate fit in this precarious geopolitical position?

Charoen Pokphand Group (CP) has always been one of the most influential companies to the Thai economy. It has also attracted numerous controversies with monopolistic and anti-competition behavior. Despite the occasional strong oppositions against the group, CP continues to expand its empire, especially under the era of Prayut Chan-ocha. In fact, according to Forbes Magazine, the Chearavanont family’s wealth has increased by almost 100 Billion Baht, despite the overall economy taking significant damage from Covid-19 pandemic.

Perhaps the best illustration of the group’s strength is their recent victory in December 2018 in the bidding for the High Speed Railway project connecting Suvarnabhumi, Don Mueng and U-Tapao Airports. That victory ensures that there are no industries left untouched – or dominated – by the group. Their incredible portfolio consists of businesses in agriculture, wholesale, retail, finance and banking, automotive, telecommunications, television, real estate, e-commerce and pharmaceutical.

The strength and reach of the group has led many to half-jokingly claim that they are no longer a private company, but a country itself.

As CP’s domination of the Thai economy continues to grow, it becomes more imperative to evaluate their political and geopolitical influences. After all, the twin pillar of governance of any country is its politics and economics. With the control of the Thai economy seemingly under CP’s control, Dhanin’s (Chia Kok Min as he is known in China) close ties with the inner circles of Chinese Communist Party is a grave cause for concern.

Dhanin came from a humble beginning.

The son of a Chinese immigrant from Guangdong operating a small seed shop in Chinatown, his family’s history is the same as millions of Chinese that migrated to Thailand in search of a better life. After all, this is a country with the highest population of overseas Chinese in the world with a long history of Chinese assimilation. Dhanin’s father, as Dhanin reveals with Nikkei Asia, placed high importance in getting all of his children educated in China and Thailand, ensuring that the Chinese roots and connections are not lost among his children. That decision would go on to pay off greatly as Dhanin expanded Charoen Pokphand and Chia Tai’s (as it is known in China) empire, especially during Deng Xiaoping’s market reform.

Greatly damaged by the Cultural Revolution, Deng Xiaoping rule was marked by an urgent need of economic transformation, which inevitably required foreign capital injection. The person that was best placed to take advantage of the position – perhaps in the world – was Dhanin.

With the Sino-Soviet Split and the Bamboo Curtain still in full effect, Deng Xiaoping’s desire to reconnect China with the world was extremely difficult to say the least. Thailand’s position as American primary ally in Asia during the Cold War played a pivotal role in the normalization of relationships between China and the West. Circumstance has elevated the importance of Dhanin to a geopolitical scale, and he took full advantage of it. 

Dhanin Chearavanont became the first foreign investor in China after Deng Xiaoping reopened of the Chinese economy in 1978. He holds Foreign Investor Certificate No. 001 in Shenzhen. From then on, Chia Tai has expanded rapidly in China and played an instrumental role in China’s market transformation.

According to Dhanin in Nikkei Asia, Deng Xiaoping spoke to him after he made the investment that “[he] wants the tens of millions of overseas Chinese around the world to follow [his] example and assist China.” Dhanin has continued his cordial relationships with the top CCP’s hierarchy ever since. In fact, Dhanin was one of the 500 representatives to shake hands and directly exchange words with Xi at the International Conference of Overseas Chinese in 2014.

Collaboration between Chinese state enterprises and CP can be seen through its recent partnership activities. In 2013, the Chinese regulator approved Chaoren Pokphand’s 15% shares acquisition of Ping An Insurance (Group) Co from HSBC Holdings PLC, an unusually large stake for foreign investors.

SAIC and CP Group formed a joint-venture with initial capital of $300 million under SAIC Motor-CP Co., Ltd. in 2013 to manufacture automobiles under the MG Brand. In 2014, China Mobile Ltd. invested $882 million in True Corp. In 2016, The CP-led consortium that won the High Speed Railway Project in 2018 includes China Railway Construction Corporation Ltd. It is evident that CP has strong ties with the Chinese government and is not shy to partner up to do businesses in Thailand.

Given CP’s size and Dhanin’s proximity to CCP’s leadership, it raises many questions about Thailand’s ability to maintain her sovereignty, given that so much of her economy is under the domination of CP. After all, not a single bullet needs to be fired for a country to be conquered if her trade and economy belongs to another sovereign nation.

China experienced this first hand in the 18th Century with the British. Through opium and malpractice, the British managed to infiltrate and take over large chunks of the Chinese economy. By the time High Commissioner Lin Tse-hsu tried to stem the tide of opium trade through an open-letter plea to Queen Victoria, China no longer had any bargaining power as British East India Company firmly had a monopoly over trade. Lin’s desperate attempt to halt opium trade by fining and destroying opium shipment that came after the Chinese opium ban culminated into the First Opium War, paving the way for more foreign occupation of China.

Chinese history clearly demonstrates the consequences of allowing foreign powers to monopolize a country’s trade and economy. While CP Group will continue to be an integral part of Thailand, its free reign on the Thai economy must be stopped and closely inspected. Dealing with CP’s monopoly is not just a matter of protecting fair competition, but also a matter of national sovereignty and security, especially in this era of geopolitical realignment.

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