VZCZCXRO5865
PP RUEHCN RUEHDT RUEHGH RUEHHM RUEHVC
DE RUEHCHI #0050 0740722
ZNR UUUUU ZZH
P 150722Z MAR 07
FM AMCONSUL CHIANG MAI
TO RUEHC/SECSTATE WASHDC PRIORITY 0422
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUEHBK/AMEMBASSY BANGKOK PRIORITY 0675
RUEHOO/CHINA POSTS COLLECTIVE
RUEHCHI/AMCONSUL CHIANG MAI PRIORITY 0465
RUCPDOC/USDOC WASHINGTON DC

UNCLAS CHIANG MAI 000050 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON TH BM CH LA
SUBJECT: TEST DRIVING THE THAILAND-YUNNAN HIGHWAYS 
 
REF: 06 CHIANG MAI  217 (PROSPECTS OF INCREASED CHINA TRADE BRING BOTH ANTICIPATION AND FEAR) 
 
¶1.  Chinese government officials and Mekong region diplomats 
tested two alternate north-south routes between China and 
Thailand March 6-10 by driving from Jinghong in Yunnan Province 
to Chiang Rai via Burma and back through Laos.   Although the 
road under construction through Laos is generally considered the 
most reliable route for future trade between northern Thailand 
and southwestern China (reftel), the road through Burma is 
shorter and accesses a potentially bigger market. 
 
¶2. According to Chiang Rai Chamber of Commerce head Patana 
Sithisombat, the traveling group included Chinese officials from 
Beijing, Yunnan and Xishuangbanna autonomous region as well as 
Kunming-based diplomats from Thailand, Burma, Laos, Vietnam, 
Malaysia and Cambodia.  Chinese media also participated.   The 
five-day trip was initiated by the Director of the Foreign 
Affairs Office in Kunming.   By inviting representatives from 
the Ministries of Transportation, Commerce, and Foreign Affairs, 
Patana said that Yunnan province hoped to impress Beijing with 
transportation developments and to influence central government 
policies on trade, immigration, and customs regulations. 
 
¶3. While the R3A through Laos, scheduled for completion in July 
2007, has been touted as the best future route between southern 
Yunnan and Thailand, Patana told Consulate staff that China 
wants to develop trade on the shorter R3B.  He reported that 
China and Burma agreed to open a permanent port of entry at the 
Chinese-Burmese border at Ruili-Mu Se.   In addition to saving 
roughly 100 kilometers, the Burma route to the Thai border town 
of Mae Sai in Chiang Rai province transverses a potentially 
bigger market than that offered by less-populated northern Laos. 
  The R3B from Jinghong to the Thai border is approximately 400 
km vs. 500 km on the R3A. 
 
¶4. Despite these supposed advantages, the Burma route has been 
seen as less viable because it passes through insurgency areas, 
and travelers are subjected to a series of unofficial tolls. 
Patana said that eliminating these outlaw levies along the R3B 
in Burma would lower the prices of Chinese goods in Burma and 
Thailand as well as the price of Thai exports to China.   He 
reported that representatives from Beijing will "soon" meet the 
Burmese government in Naypyidaw to discuss the tolls, which, 
according to the Shan Herald Agency for News (SHAN), are levied 
both by the Burmese military and by opposition Kachin groups. 
(note:  It's not clear how the Burmese government would persuade 
the insurgents to stop collecting these fees.) 
 
¶5.  To test drive both routes, the 41-member group of Chinese 
officials, media, and Mekong region diplomats left Jinghong on 
March 6 via the R3B through Burma, over-nighting in Kengtung on 
March 6.  They entered Thailand at Mae Sai, staying in the 
provincial capital of Chiang Rai on March 7.  On March 8 the 
group visited the Mekong port at Chiang Saen and the site of a 
future Thai-Laos bridge at Chiang Khong, crossing the Mekong by 
ferry to spend the night in Laos at Ban Houysai.   On March 9, 
they stayed at Luang Namtha, in Laos, moving on to reach 
Jinghong on March 10. 
 
¶6. Chiang Rai Governor Amorapun Nimanandh, who recently traveled 
the R3A to Jinghong on a separate journey to test the future 
highway, told the Consul General he is worried that Chiang Rai 
province is unprepared for the logistics involved in increased 
trade with China.  "We should have started this four years ago", 
he said, adding that he had heard that 4000 Chinese trucks are 
involved in the cross border trade, vs. 200 Thai and 80 Lao.  He 
was less concerned about future language demands, noting the 
large number of Chinese students studying at Mae Fah Luang and 
Chiang Rai Rajabhat Universities and adding that he was able to 
communicate with his Jinghong counterparts in a Tai dialect that 
is similar to northern Thai. 
 
CAMP