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Thailand told to prepare for mass Chinese investment

The Chinese government has hinted that Thailand could be the recipient of a portion of…

The Chinese government has hinted that Thailand could be the recipient of a portion of USD10 billion-worth of investment by Chinese companies, according to the Kasikorn Research Centre, which in a recently published report called on Thailand to use its close relationship with China to attract Chinese business and industrial partnerships.

The Chinese government`s policy of promoting foreign investment could provide a boon for Thailand, which enjoys a close relationship with its near neighbour. As a result, according to the research centre, Thailand is likely to see an influx of Chinese companies and state enterprises eager to invest in the Kingdom.

Various economic cooperation projects between the two countries, notably the opening up of free trade in fruit and vegetables, will encourage Chinese businesspeople to look for channels to enter into joint investment projects with their Thai counterparts. This will be particularly apparent in the agro-industrial sector and related downstream industries, resulting in a rise in exports of these products to other countries.

The report also noted that the development of transport links between Thailand and other countries in the Mekhong sub-region – Laos, Myanmar, Vietnam, Cambodia and China`s Yunnan Province – was also likely to facilitate Chinese investment. These communications routes would also provide transport links with other countries in the wider region, including India, with Thailand acting as a transport and communications hub.

These transport links, whether by land, air or river, would serve to boost trade, investment and tourism by collapsing journey times.

The research centre report said that economic cooperation among members of the Greater Mekhong Sub-region was set to boost Chinese interest in investing in Thailand, noting that businesses from China`s Yunnan Province were already placing their money in projects in the northern Thai province of Chiang Rai. The Thai government`s development of the northern border region as a special economic zone was already resulting in bilateral projects, whether in terms of transportation or tourism.

Predicting that foreign investment by Chinese companies this year would be worth no less than USD10 billion thanks to Beijing`s policy of promoting investment abroad, the report said that a proportion of this was almost certain to come to Thailand. At the same time, the two countries were likely to engage in exchanges of technology and joint research and development (R&D) projects, thus promoting economic development in both countries and in the wider Asian region.

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