Chinese investment in Thailand gains speed amidst economic slowdown
Chinese firms have significantly increased their investment in Thailand this year, despite China’s economic slowdown, providing a much-needed boost for the Thai Prime Minister, Srettha Thavisin.
The increase in investment comes as a welcome relief amid concerns about the impacts of the world’s second-largest economy’s sluggish recovery on global growth. However, Thailand continues to appeal as a crucial investment hub even for China’s ambitious companies.
In the first eight months of the year, Thailand received foreign investment applications worth 365.2 billion baht (US$10.1 billion), a 73% increase compared to the same period in the previous year.
Chinese companies led this surge, pledging 90.3 billion baht, nearly three times the previous year’s figure, according to the Thailand Board of Investment (BOI).
Even the second-largest investor, Singapore, with a total investment pledge of 76.4 billion baht, comprises primarily companies originally from China, according to BOI secretary-general Narit Therdsteerasukdi. He also anticipates that Chinese investments in Thailand will continue to rise significantly in the coming years.
For PM Srettha, this influx of investments offers a vital boost when his country is grappling with concerns over China’s economic slowdown. The 61 year old Thai prime minister, who also serves as the Finance Minister, had pledged to revive Southeast Asia’s second-largest economy when he assumed office in August.
The Bank of Thailand forecasts an economic growth of 4.4% for 2024, a marked improvement from this year’s projected 2.8%. The Bangkok-born PM’s recent three-day visit to Beijing, which primarily focused on China’s Belt and Road Initiative, included discussions on electric vehicles (EVs).
Chinese EV manufacturers such as BYD and Great Wall Motor have committed to investing at least US$1.44 billion in new facilities in Thailand, transforming the country into a regional hub for EV production.
Currently, Thailand is Southeast Asia’s largest production centre for combustion engine vehicles, housing major facilities of Japanese automakers including Toyota Motor and Isuzu Motors. However, a majority of the 228 Chinese investment proposals this year have been in the electronics sector, according to the BOI.
Thailand’s largest industrial estate developer, WHA Group, also confirmed an uptick in business with Chinese companies, which will contribute to the company achieving a second consecutive year of record land sales, reported Bangkok Post.
WHA Group is in discussions with several major auto, tech, and electronics firms for large land sales. Most recently, the company secured a deal with China’s Changan Automobile, whose 8.86 billion baht EV project received BOI approval last week. WHA Group’s CEO, Jareeporn Jarukornsakul, anticipates that Chinese investments will continue to rise for the next two years.
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