Thailand still bullish on Chinese investments as new PM heads to Beijing

Isuzu Motors

17/10/2023 06:00

By Devjyot Ghoshal and Orathai Sriring
       BANGKOK, Oct 17 (Reuters) - Chinese investment in
Thailand has picked up pace this year despite an economic
slowdown in the Asian giant, a welcome boost for the country's
new prime minister who flew into Beijing this week to bolster
ties with its largest trading partner.
    A stuttering recovery in the world's second-biggest economy
has spooked financial markets in 2023 as investors fretted about
the impact on global growth, although Thailand has managed to
retain its attraction as a vital investment hub including for
China's growth-hungry firms.
    Between January and August, Thailand received foreign
investment applications worth 365.2 billion baht ($10.1 billion)
- 73% higher than the same period last year - led by Chinese
firms that committed 90.3 billion baht, up nearly three times
year-on-year, according to the Thailand Board of Investment
(BOI).
    Investment pledges from second-placed Singapore, totalling
76.4 billion baht, were also largely from companies originally
from China, said BOI Secretary General Narit Therdsteerasukdi.  
    "And if you look at the month-by-month statistics, Chinese
investments are still increasing," he told Reuters. "So I see
that in the next two or three years, Chinese investments will
still increase drastically in Thailand."
    This wave of investments into Thailand comes at a time of
growing concerns over an economic slowdown in China, and is a
shot in the arm for Thai premier Srettha Thavisin, who pledged
to turn around Southeast Asia's second largest economy when he
took over the reins in August.
    Thailand's central bank expects 2024 economic growth to pick
up to 4.4%, from a forecast 2.8% this year.
    Srettha told reporters before flying out on Monday that his
three-day visit to Beijing, centred around a forum on China's
Belt and Road Initiative, would include discussion on electric
vehicles.
    He will also meet with Chinese business executives,
Thailand's foreign ministry said.
    
    'GOLDEN OPPORTUNITY'
    Chinese EV manufacturers - including BYD  002594.SZ  and
Great Wall Motor  601633.SS   - have investment commitments of
at least $1.44 billion in new facilities in Thailand, turning
the country into a regional hub for EV production.
    Thailand is already Southeast Asia's largest production
centre for combustion engine vehicles, hosting major facilities
of Japanese carmakers including Toyota Motor  7203.T  and Isuzu
Motors  7202.T .
    But a large proportion of the 228 Chinese investments
proposals this year have come in the electronics sector,
according to the BOI.
    "We have good relationships with all countries," Narit said.
"We are a conflict-free zone."
    WHA Group  WHA.BK , Thailand's largest industrial estate
developer, said it is seeing no slowdown in business with
Chinese companies, which will help it reach a second straight
year of record land sales. 
    "They come every week," CEO Jareeporn Jarukornsakul told
Reuters. "There really are a lot of them."
    WHA is in talks with several major firms in the autos,
technology and electronics sectors on large land sales, she
said, after clinching a deal with China's Changan Automobile
 000625.SZ , whose 8.86 billion baht EV project received BOI
approval last week.
    Chinese investments will likely continue for the next two
years, Jareeporn said.
    "It's a golden opportunity." 

($1 = 36.31 baht)

 (Additional reporting by Chayut Setboonsarng
Editing by Shri Navaratnam)
 ((Devjyot.Ghoshal@thomsonreuters.com;))