Thailand Revives Chinese Submarine Deal After Years of Delay

Bangkok approves contract amendment for stalled S26T project, greenlights use of Chinese-built engines despite initial doubts over reliability.

BANGKOK/CHRISTCHURCH | After years of hesitation, Thailand has decided to proceed with its acquisition of a Chinese-built S26T diesel-electric submarine, ending a long period of uncertainty tied to disputes over engine supply and reliability.

From German Engines to Chinese Substitutes

Initially, the deal nearly collapsed after Germany blocked the export of MTU 396 diesel engines—components originally stipulated by the Royal Thai Navy (RTN) when it signed the submarine contract with China in 2017. Beijing then proposed the use of its domestically produced CHD620V16H6 engines, but Bangkok expressed deep concerns about performance and longevity.

To reassure Thailand, China conducted more than 6,000 hours of bench testing. Following evaluations, the RTN confirmed that the substitute engines met contractual performance requirements and would not degrade operational capability.

Compensation and Concessions

To sweeten the deal, Beijing offered Thailand a compensation package worth US$24.7 million. The arrangement extends warranties and maintenance support from two to eight years, provides simulator support, and includes unspecified future equipment and weapons. Analysts expect these to consist of heavyweight torpedoes, sea mines, and potentially CM-708UNB anti-ship missiles.

Delayed but Moving Forward

The Thai Cabinet approved a contract amendment on Aug. 5, 2025, officially reviving the submarine program. Wuchang Shipbuilding Industry Group in Wuhan, which laid the keel in 2019, now has until December 2028 to deliver the 2,600-ton submarine. The vessel, originally slated for a 2023 handover, is currently 64% complete.

So far, Thailand has paid 7.7 billion baht (US$237 million) in installments to China Shipbuilding & Offshore International Co. (CSOC), with another 5.5 billion baht (US$170 million) outstanding.

Geopolitical and Strategic Implications

The submarine saga highlights broader defense and diplomatic dynamics. Germany’s refusal to approve MTU engine exports was reportedly tied to the European Union’s 1989 arms embargo against China following Tiananmen Square. However, defense experts note that enforcement of this embargo has been inconsistent, with Chinese naval platforms often using German-derived technology.

Thailand’s S26T is based on the Type 039 Yuan class used by the People’s
Liberation Army Navy, one of which is seen here. (Chinese MND)

According to Siemon Wezeman of the Stockholm International Peace Research Institute, Germany’s decision may reflect a tougher stance on dual-use exports and Thailand’s political status under military rule.

Thailand’s military-backed government has pursued closer ties with China since its 2014 coup, even as relations with the United States cooled. Analysts argue that Bangkok’s decision to push forward with the submarine is as much about diplomacy and geopolitics as it is about military capability.

Looking Ahead

The move raises lingering questions about China’s own submarine propulsion systems. If Beijing had to qualify the CHD620 engines for Thailand, it suggests the People’s Liberation Army Navy (PLAN) may not yet be widely using them on its Type 039-class submarines.

Meanwhile, Pakistan is constructing eight Hangor-class submarines based on the same design, and they too will reportedly rely on the CHD620 engines.

For Thailand, the revived project reflects a calculated compromise: proceed with a submarine of uncertain long-term reliability, but strengthen strategic ties with China in the process.

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-- By Masakela P. Rawls

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