Secretary General of Thailand Investment Promotion Council: Chinese investment is entering advanced manufacturing cooperation in Thailand | Electric vehicles | Thailand

[Global Times reporter Zhao Jue, Li Xuanmin] Led by the high-quality co construction of the "the Belt and Road", China has become Thailand's largest source of foreign direct investment for many times since 2019. From traditional mechanical manufacturing and automotive parts to electric vehicles and new energy components, Chinese investment in Thailand has shown a characteristic of "both quantity and quality", and Thailand has also become an important hub for Chinese enterprises to enter Southeast Asia.

The Secretary General of the Thailand Investment Promotion Council, Nali Tesatilasha, has long been dealing with Chinese companies and is also a witness and promoter of the Chinese investment boom in Thailand. In an exclusive interview with the Global Times, Nali praised the positive role of the "the Belt and Road" initiative in strengthening regional connectivity and the positive role of Chinese investment in Thailand's industrial development process. He stated that Thailand will continue to welcome all projects that align with its development strategy.

China's investment in Thailand has always maintained a high level

This year marks the 10th anniversary of the "the Belt and Road" initiative. Under this cooperation framework of joint consultation, construction and sharing, more and more Chinese enterprises are going abroad. Thailand, which is geographically close and culturally close, has become the preferred choice for many Chinese enterprises. According to data released by the Investment Promotion Council of Thailand, foreign direct investment in Thailand increased by 141% year-on-year in the first half of this year, reaching 304 billion baht. China is the largest source of investment, with a total investment of 61.5 billion baht, accounting for over 20%.

Nali told Global Times reporters in an interview that China's investment in Thailand began to increase significantly around 2015. Since then, despite the COVID-19, China's investment in Thailand has remained at a high level, with a large part of the funds going into advanced manufacturing and Thailand's "Eastern Economic Corridor" region.

From a specific industry perspective, the electric vehicle and electronics industries have become new hotspots driving the continuous increase of Chinese enterprises' investment in Thailand. Regarding this, Nali analyzed that China is the main driving force for global economic development and has advanced technology in multiple industries, which is in line with Thailand's strategy of investing in higher technological levels and developing a new economy.

New energy vehicles exhibited at the Thailand Auto Show.

"The continuous investment applications reflect Chinese investors' optimism towards Thailand as a strategic location for ASEAN, as well as their positive willingness to engage in business with other countries, and clearly demonstrate that Thailand China cooperation is moving towards deeper levels," said Nali.

The Thailand Investment Promotion Council is affiliated with the Office of the Prime Minister of Thailand, and its core function is to promote foreign investment in Thailand and overseas investment by Thai enterprises. At present, the Thailand Investment Promotion Commission has offices in Beijing, Shanghai, Guangzhou and other places.

Able to attract global enterprises, including Chinese enterprises, Nali also linked the improvement of Thailand's business environment with the joint construction of the "the Belt and Road". Nali said that for Thailand, interconnectivity is a crucial matter. "Benefiting from our strategic location at the center of ASEAN, coupled with our experience as a regional business and investment center as well as a major tourist destination, we deeply understand how important convenient the flow of people and goods is." Nali said, "From the perspective of the Thailand Investment Promotion Commission, we understand better that connectivity and good infrastructure are key decision-making factors for investors to consider investing in Thailand."

Nali believes that connectivity and infrastructure construction brought about by the "the Belt and Road" initiative have further strengthened long-term trade, economic and investment cooperation between China and ASEAN and ASEAN countries, which also helps to enhance Thailand's competitive advantage.

At present, the flagship project of the "the Belt and Road" jointly built by the two countries, the China Thailand Railway, is under construction. The first phase of the project is planned to be completed and opened to traffic in 2026. Nali said that the opening of the China Laos railway has shown that enhancing connectivity is conducive to trade and tourism between China, Laos and Thailand. After the completion of the China Thailand Railway, it will bring more trade and investment opportunities to the region.

There is great potential for cooperation in the electric vehicle and electronics industries

In April this year, Nali led a delegation to China for a roadshow and held discussions with more than 10 electric vehicle and parts production enterprises, including Changan Automobile, Geely Automobile, Jianghuai Automobile, and Jiangling Automobile. Nali's visit will focus on cooperation in the electric vehicle industry, demonstrating that this field has become an important trend for Chinese enterprises to invest in Thailand.

Nali told reporters that as of June 2023, BYD, Great Wall Motors, SAIC, and Nezha Motors have decided to invest in building electric vehicle manufacturing bases in Thailand. Other Chinese electric vehicle companies, including Changan Automobile and GAC Aion, are also considering investing in Thailand as part of their international expansion plan.

The Nihon Keizai Shimbun reported in June this year that the electric vehicles produced by Chinese enterprises have accounted for about 70% of the pure electric vehicle market in Thailand. Nali commented that the competitive advantage of Chinese new energy vehicle manufacturers in Thailand stems from their excellent technology and innovation. In addition, these manufacturers were the first to realize the potential of Thailand's electric vehicle policy, thus enjoying a first mover advantage in the Thai and regional markets. Thailand has established a very strong supply chain in the automotive and electronic and electrical fields, coupled with its position as the largest automotive producer in the ASEAN region, these factors have attracted Chinese investors.

Nali emphasized that in the electric vehicle industry, Thailand is the first country in Southeast Asia to provide special incentives for the entire supply and demand sides. According to Nihon Keizai Shimbun, from 2022, the Thai government will pay a maximum of 150000 THB as a sales subsidy for pure electric vehicles under the condition of localized production. In addition, Thailand has set a policy called "30/30" aimed at achieving the goal of electric vehicles accounting for 30% of the total national automobile production by 2030.

"We believe that the results of our policies and incentives are very encouraging, as Thailand is now the fastest-growing electric vehicle market in Southeast Asia," said Nali.

In addition to working together in the field of electric vehicles, Nali also mentioned in an interview that electronic products are a promising area of cooperation between Thailand and China. According to the Bangkok Post in Thailand, during his road show in China in April, Nali met with leaders of several Chinese electronic and electrical manufacturers and suppliers, including Hushi Electronics and Oscon. In April of this year, a delegation from the China Electronics and Circuit Industry Association, consisting of representatives from over 60 companies, visited Thailand to focus on understanding investment opportunities, investment promotion measures, and relevant regulatory information in Thailand. Nali believes that China's electronic and electrical industry can seek to establish industrial chain extension bases overseas, and Thailand can become one of the target countries for developing cooperation in this industry.

Joining hands with "Made in Thailand" can help Chinese enterprises go global

"Our investment policy remains open and welcomes all projects that align with our development strategy." Nari emphasized in response to some Western media rumors about the impact of "decoupling and chain breaking" on China's manufacturing industry that Thailand's own industrial development and manufacturing supply chain construction have clearly benefited from investment from countries such as China, such as the electric vehicle and electronics industries mentioned earlier. At present, the Thailand Investment Promotion Committee is in close communication with Chinese investors such as BYD and Great Wall Motors, as well as local suppliers in Thailand, to encourage the establishment of supply chain cooperation.

In the process of investment and industrial cooperation between China and Thailand, in addition to some foreign media hype about decoupling and chain breaking, the trend of China's manufacturing industry shifting to Southeast Asia, including Thailand, has also received much attention. Regarding this, Nali stated that many Chinese companies have made significant investments in Thailand for the first time outside of China. More and more Chinese companies feel that leveraging Thailand's strategic position and other advantages, partnering with "Made in Thailand" is one of the priority choices for Chinese companies to expand overseas. "We are not competing with China or any other investment source country, we are helping their companies become more international."

"I believe that bilateral investment and cooperation between Thailand and China will continue to grow and become increasingly important. We hope to see more investment and joint technology development, and support each other's economic development in a sustainable way in the future," said Nali.