In 2019, for the first time, China topped the list of countries seeking to invest in Thailand because of the effects of U.S.-Chinese trade disputes and Thailand’s connection with the One Belt, One Road (OBOR) initiative, a Thai official said Thursday.
Foreign direct investment (FDI) applications from China, valued at U.S. $8.6 billion, comprised almost half of total foreign investment applications last year, $16.7 billion, according to data from Thailand’s Board of Investment (BOI).
“China became the number one foreign investor for the very first time,” BOI Secretary-General Duangjai Asawaschinatachit said while presenting the statistics at the Foreign Correspondents’ Club of Thailand in Bangkok.
Japan was the second most active suitor in 2019, with investment applications valued at $2.4 billion, followed by Hong Kong ($1.2 billion), Switzerland ($800 million) and Taiwan ($700 million).
The United States, which topped the chart in 2018, followed by Japan, then China, did not make top five in 2019, according to the BOI. Their respective application totals were $11.0 billion, $2.4 billion, and $1.8 billion, that year.
Kobsak Pootrakool, the deputy secretary-general for Prime Minister Prayuth Chan-o-cha, said trade disputes between the U.S. and China, as well as Thailand’s participation in China’s One Belt, One Road initiative, played a part in the dramatic rise in investment pledges. The BOI has not released the actual value of foreign investments in 2019.
“The next two years is probably the best time in 20 years for foreign investment in Thailand, thanks to President Trump,” Kobsak said, referring to U.S. President Donald Trump and the U.S.-China trade row.
“Many companies love to be in China, big market. They don’t want to leave but because of the trade war, now they are thinking of finding an alternative ... and Thailand has been one of the choices for them,” he said, referring to punitive tariffs Washington slapped on Chinese goods that have sent manufacturers fleeing.
Officials meanwhile affirmed that China’s transregional infrastructure initiative, OBOR, played a role in the flood of investment proposals. “When we pay attention to this, China’s investment application with the BOI increased and became the number one now,” Kobsak told BenarNews.
A whopping 59 percent of the 2019 investment proposals were related to the Eastern Economic Corridor where Chinese tycoon Jack Ma announced plans to invest in e-commerce and products distribution center, according to Duangjai, the BOI chief.
EEC, the common name for Thailand’s eastern seaboard, is the nation’s center for export-oriented industries, where high-value goods such as Japanese automobiles are manufactured and shipped elsewhere. The region includes the provinces of Chonburi, Rayong and Chachoensao.
China in 2017 laid out plans to invest more than $1 trillion in building a network of ports, roads, railways and other logistics-related projects stretching through Southeast Asia, South Asia and beyond.
The infrastructure initiative is part of China’s multi-pronged strategy to boost global trading links by developing routes connecting the world’s most populous nation to markets in Europe.
China is involved in several rail projects in Thailand. In October 2019, State Railway of Thailand signed an agreement with a consortium including a Chinese state-owned company to build a $7.4 billion high-speed railway connecting three airports.