Chinese investments in Thailand
Sino-Thai bilateral trade and investment relations have grown from year to year
China and Thailand established a comprehensive strategic partnership and strengthened cooperation in multiple areas such as agribusiness, railway connectivity, grain, flood control, and drought relief.
Thailand’s economy is influenced by as well as highly dependent on Chinese investments and China is after Japan the most active foreign direct investor in the Kingdom of Thailand. Chinese enterprises are attracted by the ten promoted target industries and the Eastern Economic Corridor. The targeted industries are automotive and auto parts, petrochemicals, smart electronics, agriculture and biotechnology, tourism, medical, digital, robotics, aviation, and textiles.
To promote investment from China, Siam Commercial Bank announced a THB 5 billion bridge-loan scheme “for Chinese companies’ land purchases in Thailand”. The Industrial and Commercial Bank of China Limited (ICBC), China’s largest bank, has also reportedly said that it is willing to offer funding for Chinese investors in Thailand. However, Thailand’s foreigner restrictions have to be taken into consideration with respect to Chinese business in Thailand and Chinese property acquisitions.
Projects like the Sino-Thai high-speed train venture are expedited via Section 44 of the interim charter (S44IC) by exempting them from certain legal requirements and hurdles. However, S44IC will be not forever and the legal situation thereafter is not crystal clear.
The Investment Promotion Section of the Royal Thai Consulate-General in Shanghai announced that they are targeting to draw at least US$ 25 billion investment from Shanghai to Thailand this year. A most important consideration is that Thailand is not only an attractive investment destination, it also provides convenient market access into Southeast Asia.
China’s “Go Out” policy encourages Chinese companies to expand their production bases to Thailand and other ASEAN member countries because of higher production costs at home. Another boost will come from the Maritime Silk Road, which will provide better transport and trade links among China, Southeast Asia, and South Asia. China’s One Belt, One Road initiative (OBOR) will further boost Sino-Thai business relationship.