Thailand and China Tentatively Agree on Deal on Failed Submarine Deal

China and Thailand reached an agreement “in principle” to either build two unspecified patrol vessels or a frigate for the Royal Thai Navy (TRN) instead of a Yuan-class submarine.

The information, from a TRN source, said that both countries agreed to the potential deal during Thai Defense Minister Sutin Klungsang’s recent visit to China. During the visit, China accepted “Thailand’s proposal to purchase either two offshore patrol vessels or one frigate” instead of a submarine.

However, China Shipbuilding & Offshore International Co.., the contracted builder of the submarine, is concerned about the deal because the submarine is 50 percent complete.

The proposal’s purchase agreement will use the approximately $220 million USD (8 billion baht) of installments Thailand placed for the submarine over the last six years. However, the agreement’s details have not been finalized by the two countries.

The 2017 agreement between Thailand and China for one Yuan-class submarine failed due to Thailand’s requirement that it use a German-made diesel engine. Germany has restrictions on the export of the engines to China for potential military applications. Thailand did not agree with China’s proposal of using a Chinese-made engine as a solution to the issue.