Chinese illicit influence scandals in Thailand

Author: Greg Raymond, ANU

Two scandals converged in November 2022 in Thailand, forming a perfect storm that threatens the government party Phalang Pracharat’s already shaky prospects at the upcoming 2023 national election. The scandals have also illuminated a growing problem that has remained largely out of Thai news headlines in recent years — the nexus between Chinese capital, crime and Thai politicians.

The government was forced to back down on a proposal that intended to increase foreign investment by lifting Thailand’s longstanding prohibition on foreigners owning land. A united front opposed to the measure, including fellow Phalang Pracharat member Pareena Kraikupt, deployed one of the most potent rhetorical weapons in Thailand’s political arsenal — that of khai chat or selling out the nation.

Thai police also announced they had conducted raids in Bangkok and arrested a Chinese national who was using fake Thai identity cards and in possession of cash, luxury cars and property titles. This converged precisely with an objection that opponents of the land sale reform measure had raised —that relaxed laws could increase the flow of Chinese ‘grey money’ (thun chin sithao) into Thailand. ‘Grey money’ refers to proceeds from criminal enterprises — including drugs and gambling — laundered through purchases of real estate.

The Thai police stated in a subsequent briefing that money from the Golden Triangle drug trade, which has increased in recent years, was financing the Chinese crime bosses’ acquisition of Thai passports, identities and land. Other former and serving politicians have come forward with their knowledge of the activities of Chinese Triad gangs in Thailand. Most disturbing are allegations, floated by many, that these gangs are not afraid of either the police or the law because Thai laws are implemented weakly and without transparency. This is because the gangs are backed by Thai politicians and officials.

Signs of Chinese capital and influence corroding the integrity of Thailand’s political processes have been present for some time and were flagged as early as the 1990s.

A 1992 Thai Ministry of Foreign Affairs document warned that the Chinese side could ‘exploit close (personal) relationships with Thai elites and high-ranking officials in the Thai capital’ and obtain insights from Sino-Thais in private enterprise.

In 2020, the Thai Department of Special Investigation revealed a large criminal network involving foreign Chinese nationals that obtained Thai identity cards registered to non-existent individuals and used them to establish Thai-registered companies. The network of 104 companies, which was ostensibly involved in legitimate businesses such as real estate, was moving hundreds of millions of dollars suspiciously, suggesting money laundering or tax avoidance.

One of the individuals named in the investigation, Mr Wang Hongbin, carried multiple passports and was well-connected with both the overseas Chinese business community and Thai politicians, including former prime minister Chavalit Yongchaiyudh.

In 2013, Wang, with then-speaker of the House of Representatives Somsak Kiatsuranont, created a fake position in parliament called the ‘Director of Chinese Affairs Department to the President of National Assembly of Thailand’. A corresponding letterhead — with the Thai parliament’s crest combining Chinese and Thai script — was also created. The fictitious department invited dozens of Chinese provincial officials to visit Thailand. Wang has been able to remain active in Thailand, despite being under criminal investigation, suggesting patronage from within the Thai establishment.

Thai reluctance to grapple with this problem stems from multiple sources.

As many as a third of Bangkok’s population have some Chinese heritage stemming from waves of Chinese migration over the late 19th and early 20th centuries. Chinese diasporas have suffered much discrimination and Chinese–Thai people may be concerned about this issue stoking animosity.

There is a reluctance to criticise or scrutinise China given the royal princess Sirindhorn’s much-publicised love of China and her extensive travels there. The powerful Chinese–Thai businesses that control much of the Thai economy, such as the Charoen Pokphand Group, are close to China. The CEO of Charoen Pokphand Group Dhanin Chearavanont goes by the name Xie Guomin in China and is president of the China Federation of Overseas Chinese Businessmen — a United Front Work Group affiliate.

Some political parties are funded by these sources, including Phalang Pracharat which accepted a 3 million baht (US$84,250) bribe from a Chinese businessman running an illegal nightclub in Pattaya. The growth of Thai–Chinese associations, which bring together Thai military officers, politicians and businesspeople, such as the Thai-Chinese Culture and Economy Association established by Chavalit himself, may have also played a part in anaesthetising the Thai public to these risks.

Given that this is the first time that this issue has received media attention on such a large scale, it is possible that ‘grey capital’ will become a substantive issue in next year’s election. Some, such as the Move Forward Party’s Rangsiman Rome have not been afraid to bring corruption into the spotlight.

Greg Raymond is a Lecturer at the Strategic and Defence Studies Centre, The Australian National University.