Explainer | Thailand’s Chinese submarine deal: why is it stuck in limbo, and will it go ahead?

  • Prime Minister Prayuth Chan-ocha’s government has struggled to defend the US$1.05 billion deal for three Chinese submarines at a time of economic hardship
  • Opposition politicians have called for it to be scrapped. But observers say that is unlikely, in the interests of ‘maintaining close neighbourly relations’

A model of a Yuan class S-26T submarine of the type Thailand ordered from China. Photo: Handout
China’s 13.5 billion-baht (US$392 million) deal to build a submarine for Thailand was hailed in 2017 as one of the centrepieces of Beijing’s defence export plans. But the deal has appeared increasingly in limbo in recent months because of the manufacturer’s inability to obtain German-made diesel engines as stipulated in the contract.
The reason? Germany is limiting the export of defence technology to China, citing a European Union embargo first imposed in 1989 in the aftermath of the Tiananmen Square crackdown. Certain exports from European nations have been allowed in the past, but it appears the rules are being more strictly enforced this time around.
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