China top source of Thailand investment in 2022

Geopolitical tensions are driving China's search for safety

Thailand’s main source of investment in 2022 was China, for the first time in three years. The world’s second-largest economy poured US$2.3 billion (75 billion baht) into electronics, automotive and data centres. The figures, of course, do not include the tide of Chinese investment in grey areas such as drugs and gambling.

China last held the No.1 position in 2019, as manufacturers bailed out to protect their supply chains. That relocated capital was a main source of Thailand’s investment. Japan was the biggest provider of foreign loot in 2020 and 2021, as China locked down investment activity.

Narit Therdsteerasukdi, secretary-general of the Thai Board of Investment told Nikkei on Friday…

“The increase in applications we saw in 2022 came in large part from global leaders, such as BYD Auto, Foxconn and Amazon Web Services, showing their confidence in Thailand as a resilient and investor-friendly location for investments in the industries of the future.

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“The current geopolitical tensions and global economic outlook are causing investors to look for safe investment areas, providing an important opportunity for Thailand to use this period to attract companies to set up or relocate regional headquarters here.”

While Japan plans to invest in more projects, Chinese money flowed into electronics and auto manufacturing, Thailand’s prized future. US investors came in third with 50 billion baht (US$6.5 billion) in 33 projects. Taiwan entered the top four through manufacturers such as Delta Electronics and Foxconn, while Singapore slipped to the fifth source of Thailand’s investment.

The electronics and electrical appliances sector sucked up 130 billion baht (US$4 billion), the auto industry 105 billion baht, with electric vehicles (EVs) alone attracting 54 billion baht.

The board has approved Chinese EV maker BYD’s plans for a battery plant. The 4 billion baht facility will produce batteries for EVs and plug-in hybrids. BYD last year committed 18 billion baht to its first EV plant outside China, cementing China as Thailand’s top source of foreign direct investment.

The arrival of Chinese automakers such as BYD, Great Wall Motor, and SAIC has posed a challenge to Japan’s supply chains and market dominance in Thailand. Japanese carmakers Toyota Motor, Honda, and Nissan helped build Thailand’s auto industry into the “Detroit of Asia,” securing Japan’s place as Thailand’s top investor for several years.

Five companies, including SAIC-owned MG Motor, received investment promotion incentives worth 2.1 billion baht for EV charging stations.

The board called on relevant ministries to implement a utility green tariff mechanism, which would attract investors by allowing companies to buy renewable energy at special bundled rates.

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Jon Whitman

Jon Whitman is a seasoned journalist and author who has been living and working in Asia for more than two decades. Born and raised in Glasgow, Scotland, Jon has been at the forefront of some of the most important stories coming out of China in the past decade. After a long and successful career in East sia, Jon is now semi-retired and living in the Outer Hebrides. He continues to write and is an avid traveller and photographer, documenting his experiences across the world.

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