BANGKOK (Reuters) - Thailand’s defense technology agency plans to set up a joint center with China to produce and maintain military equipment in the latest sign of the strengthening security relationship since a 2014 coup.

A Royal Thai Navy prototype combat drone, developed by the Defense Science and Technology Department is pictured during the Defense and Security 2017 exhibition in Bangkok, Thailand, November 7, 2017. REUTERS/Panu Wongcha-um

The plans to establish the facility - and discussions on a Chinese naval center to serve submarines Thailand ordered this year - point to a growing Chinese security presence in the oldest U.S. ally in the region as elsewhere in Southeast Asia.

The Thai government’s Defence Technology Institute (DTI) will set up Thailand’s first commercial joint defense facility with China in the northeastern province of Khon Kaen in July, a defense ministry spokesman said.

It will be responsible for assembly, production and maintenance of Chinese land weapon systems for the Thai army.

“All our production will be for domestic official usage,” defense ministry spokesman Kongcheep Tantravanich told Reuters, adding that it could become an assembly and maintenance center for all states in the Association of Southeast Asian Nations (ASEAN).

Specific details, he said, were subject to further discussions between the ministry and China North Industries Corporation (NORINCO) - which makes tanks and weapons among other heavy equipment.

NORINCO did not respond immediately to an emailed request for comment. Its website describes it as “a pioneer and leader of Chinese military trade, and an important team to implement China’s Going Global strategy”.

Kongcheep said the Chinese would provide training and technology transfer, but details of any Chinese personnel in Khon Kaen were among things being discussed.

The Chinese Defense Ministry did not respond when contacted by Reuters for comment.

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BIG PURCHASES

China has become an increasingly important source of weapons for Thailand, particularly since the United States and Western countries downgraded ties after the army seized power in 2014.

Major purchases since 2015 include orders for 49 Chinese tanks and 34 armored vehicles worth over $320 million - much more than the army has bought from other countries, although it also ordered helicopters from both Russia and the United States.

The biggest Chinese purchase is the Royal Thai Navy’s order for three submarines at a cost of over $1 billion.

Thai and Chinese armies and air forces have begun joint exercises, complementing Thailand’s continuing drills with the U.S. forces. On the civilian front, Thailand and China plan development of a high-speed rail link as part of Beijing’s Belt and Road initiative.

Relations with the United States are warming again too, however, particularly since new U.S. President Donald Trump hosted junta leader Prayuth Chan-ocha at the White House.

The joint weapons manufacturing center in Khon Kaen - apparently similar to one in Pakistan - could complement China’s growing military presence in neighboring Cambodia, said Paul Chambers, who has researched Thai military and regional security.

“It opens the door for the potential of growing Chinese military influence in mainland Southeast Asia,” said Chambers, of Naresuan University in the northern Thai province of Phitsanulok.

New legislation taking effect next year will allow Thailand’s Defence Technology Institute to operate on a commercial basis, but it will remain entirely under government ownership.

Thailand’s Defence Ministry said the government was also holding preliminary discussions with Ukraine, Russia and South Africa about joint defense manufacturing facilities, similar to the deal with China.