Dec 22, 2011, 12:34 GMT
Bangkok - Chinese Vice President Xi Jinping on Thursday presided over the signing of agreements with Thailand on a high-speed train project and a currency swap arrangement to facilitate bilateral trade.
Xi, who is expected to become Chinese president next year, met with Thai Prime Minister Yingluck Shinawatra Thursday evening.
The two leaders witnessed the signing of a treaty on prisoner exchanges and an agreement to jointly develop a high-speed train line between Bangkok and Chiang Mai in northern Thailand, to link up with mainland south-east Asia, said government spokeswoman Thitima Chaisaeng.
They were also present at the signing of a bilateral currency swap agreement between the Bank of Thailand and the Chinese central bank, she said.
The currency swap agreement will make it easier for Thai traders to access Chinese yuan to conduct trade.
'The main problem with making the yuan an international currency is that its liquidity is limited,' said Charl Kaengchon, chief economist of the Kasikorn Research Institute.
Under the swap arrangement, the Bank of Thailand will be provided yuan from the Chinese central bank, which will then lend it to Thai commercial banks for them to lend to traders.
'It's an important first step for the yuan as an international currency,' said Charl. 'But in the future it's really up to the policy of the Chinese to liberalize capital accounts to make it easier for people to move money out of China.'
China is currently Thailand's leading single country trade partner, accounting for 11 per cent of its export this year.
The European Union and the Association of South-East Asian Nations (ASEAN) provide bigger cluster markets for Thai exports.
Thailand's chief exports to China are rubber, tapioca and rice.
LEAD: China, Thailand sign high-speed train, trade agreements - Monsters and Critics
Bangkok - Chinese Vice President Xi Jinping on Thursday presided over the signing of agreements with Thailand on a high-speed train project and a currency swap arrangement to facilitate bilateral trade.
Xi, who is expected to become Chinese president next year, met with Thai Prime Minister Yingluck Shinawatra Thursday evening.
The two leaders witnessed the signing of a treaty on prisoner exchanges and an agreement to jointly develop a high-speed train line between Bangkok and Chiang Mai in northern Thailand, to link up with mainland south-east Asia, said government spokeswoman Thitima Chaisaeng.
They were also present at the signing of a bilateral currency swap agreement between the Bank of Thailand and the Chinese central bank, she said.
The currency swap agreement will make it easier for Thai traders to access Chinese yuan to conduct trade.
'The main problem with making the yuan an international currency is that its liquidity is limited,' said Charl Kaengchon, chief economist of the Kasikorn Research Institute.
Under the swap arrangement, the Bank of Thailand will be provided yuan from the Chinese central bank, which will then lend it to Thai commercial banks for them to lend to traders.
'It's an important first step for the yuan as an international currency,' said Charl. 'But in the future it's really up to the policy of the Chinese to liberalize capital accounts to make it easier for people to move money out of China.'
China is currently Thailand's leading single country trade partner, accounting for 11 per cent of its export this year.
The European Union and the Association of South-East Asian Nations (ASEAN) provide bigger cluster markets for Thai exports.
Thailand's chief exports to China are rubber, tapioca and rice.
LEAD: China, Thailand sign high-speed train, trade agreements - Monsters and Critics