Thailand becoming preferred investment destination for the Chinese Investors

by Textile Quotient News Desk
16 Feb 2019

As China’s labour and real estate prices are rising, the Chinese investors are turning their focus on the off-shore investments and more than anything else they look for economic incentives and growth potential. Issues such as licensing, foreign exchange laws and infrastructure are also highly relevant. Thailand for China stands advantageous in these parameters and other related variables, such as Thailand’s close geographic, cultural and political connections to China, has placed the country at the forefront of many Chinese investors’ minds.

Through a mindful policy of simplifying regulations for international investors, Thailand has vastly improved its ways of doing business ranking-now at number 27 worldwide, according to the World Bank. The country is also promoting an increasingly international mindset, which is evident from English language in its primary school curriculum.

 Why Thailand for China?

Thailand has earned its share of attention among international businesses, particularly those involved in technology-based manufacturing. Besides Thailand, rapid economic growth is occurring across many parts of the greater Southeast Asian region, including countries like Vietnam, Cambodia, Bangladesh and Myanmar. These countries are also making efforts to encourage international investment, but none of them are able to offer business environment comparable to Thailand’s Eastern Economic Corridor. Citing an example of Cambodia, which offers a liberal period of tax exemption, however that tax then becomes payable if a foreign investor decides to remit money out of the country and does not apply for the exemption under the double tax treaty between China and Cambodia.

The special industrial park catering to high-tech Chinese manufacturers on the eastern seaboard, in Chonburi, reflects the great business success between China and Thailand. The park is a joint project between Thai developer Amata Corporation and China’s Holley Group. Earlier Chinese investment model, especially in the construction sector was typically relying on contractor’s role; however the current trend is toward longer-term equity investment. The success of this industrial park is symbolic of a broader move in focus among Chinese businesses in Thailand.

Stable Bhat & enormous foreign exchange reserves

Thailand’s vast foreign exchange reserves, which is the 13th highest among all countries worldwide; it has USD 183 billion in US dollar reserves. Its strong manufacturing and tourism base, has allowed Bhat to remain a stable and known quantity over time. Thailand has been able to loosen regulations on businesses that operate there, without adding new rules and conditions to try to keep money within the country’s borders.

Complementing Synergies

Myanmar and Bangladesh and the likes are mounting stars among the less-developed Asian countries, which are open for business, nevertheless, Thailand as of now can afford to embrace the technologies that China has spent the last decade perfecting, as it is cash rich country and much developed that these economies. Thailand’s potential as a business hub for Southeast Asia is also unmatched, particularly as China seeks to integrate more with growing economies across the region.

Just as a wide array of business opportunities begins to open up for the economies of Thailand and China, the Chinese companies have developed the expertise to construct high-speed trains, cutting-edge airports and smart cities, at competitive prices, unlike Japan which is expensive. Many more upgrades in infrastructure are anticipated to come into service. Now even Thailand is opening the bidding for similar projects backed by state funds. The proposed Pan-Asia Railway Network will introduce high speed international travel to Southeast Asia, connecting China to several other countries via Thailand – with Bangkok as a prime location where three high-speed lines are set to converge.

Advantageous environment have placed Thailand at the forefront of many Chinese investors’ minds

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