Thai Navy seeks submarine engine discussions with Chinese builder

The Thai Navy has renewed its efforts to discuss with Chinese manufacturers replacing the engine of a submarine it intends to buy from China, with canceling the contract a possible option that an analyst said would be “a blow to China’s defense exports.”

Thailand’s military failed to make a decision about the submarine contract under the former Navy Commander Somprasong Nilsamai before he was replaced by Adm. Choengchai Chomchoengpaet in an annual military reshuffle in September.

The new commander has now said he’d seek another round of negotiation to see if a Chinese-made submarine engine can be used instead of the German engine that China is blocked from buying from the Motor and Turbine Union (MTU).

In April 2017, the Thai government approved the Royal Navy’s plan to buy three Yuan-class submarines from China but the Chinese state-owned submarine developer could not obtain the diesel engine from Germany to fit into the sub because of the European Union arms embargo imposed on Beijing.

The E.U. imposed its arms embargo on China in 1989 after the violent suppression of pro-democracy protests in Beijing’s Tiananmen Square.

Adm. Choengchai told reporters in Bangkok on Monday that he may send naval officials and experts to China “to examine the engine” offered by the China Shipbuilding & Offshore International Co. (CSOC) to see if it’s good enough to fit into the submarine.

Asked if the contract could be canceled in the case the engine failed the examination, the commander said: “That’s another option.”

Thailand already paid the first installment of 700 million baht (U.S. $20.9 million) in 2017 with the submarine’s delivery scheduled for 2024.

"If the Thai navy chief wants to hold further negotiations with the Chinese, it suggests he still has serious doubts about the suitability of the engine they have proposed,” said Ian Storey, a senior fellow at the ISEAS-Yusof Ishak Institute in Singapore.

“If the two sides cannot reach an agreement, there's a definite possibility that Bangkok may cancel the order," Storey said, adding that if that happens, it will “deal a serious blow not only to Sino-Thai relations, but China's efforts to increase its defense exports to Southeast Asia and other parts of the world.”

The value of China’s arms sales overseas has gone down nearly 40 per cent from the previous five years, according to the analyst.

A new report by the Stockholm International Peace Research Institute (SIPRI) said that while China’s arms industry has developed markedly since Deng Xiaoping initiated modernization reforms in 1978 and especially after the U.S. and the E.U. imposed arms embargoes on Beijing, the People’s Liberation Army (PLA) remains the main customer for Chinese arms companies. 

But it could be that the Thai military is “playing hardball with the Chinese in the hope that they will come up with a better offer,” Ian Storey said.

“If anything, the navy commander’s words represent a bargaining standpoint,” said Paul Chambers, a Thailand-based military analyst. 

In his opinion, the Thai decision makers are careful not to make any move that can be seen as damaging to the relationship with the United States, Thailand’s treaty ally. 

“We must remember that Thailand seeks to create balance in its policies toward China and the U.S. rather than veering toward either side,” Chambers told RFA.

Critics say that Bangkok’s growing military ties with China have led to trust issues with the United States.

The latest move with the sub engine is “probably not enough to anger the Americans but I'd be confident that the U.S. would register some kind of complaint,” said Richard Bitzinger, senior fellow at the S. Rajaratnam School of International Studies in Singapore. 

Military must-haves

The new Thai Navy Commander, Adm. Choengchai Chomchoengpaet, told reporters on Monday that his force “must have three submarines in order to be equal to [other navies]” and to be able to deal with security threats.

“Obviously the Thais really want submarines, and the Chinese subs are probably their best bet in terms of price,” said Bitzinger.

“Capabilities should matter, but I don't think the Thais themselves believe that they would ever use these subs for real combat. They just want something for show, and to match similar acquisitions by other states in Southeast Asia,” the military expert said.

Many Southeast Asian countries, especially those with competing claims in the South China Sea, are developing their own submarine fleets.

Vietnam bought six Kilo-class submarines from Russia, while Indonesia and the Philippines are discussing purchasing submarines from France. Singapore and Malaysia operate four and two subs, respectively.

China has an estimated 76 submarines - the largest number in Asia. The Yuan-class is a diesel-electric submarine designed to operate in shallow coastal waters, according to the U.S. Naval Institute.

“The Thais are taking a real chance on using an unproven Chinese engine. Even the Chinese have been loath to use an indigenous engine, which says something,” Bitzinger said. 

“I think it's a risky thing for the Thais to do. They could be getting another ‘Chakri Naruebet’, nominally impressive but militarily useless,” added the analyst, referring to the Thai Navy’s first and only aircraft carrier. 

Bought from Spain at a cost of U.S. $300 million, the world’s smallest carrier was commissioned in 1997 but has spent more time in port than in the sea. It reportedly doesn't have a functioning anti-aircraft defense system and due to financial constraints only sails one day per month for training purposes.

Pimuk Rakkanam contributed to the story from Bangkok.