General

Since March, BYD Motors, Nezha Motors, and SAIC Group have respectively announced the establishment of their first overseas passenger vehicle production base and new energy vehicle key component production base in Thailand, sparking a wave of Chinese car companies investing in Thailand.

This is a microcosm of the high enthusiasm of Chinese companies investing in Thailand since the beginning of this year. In the post pandemic era, what are the prospects for Chinese companies to invest in Thailand? What areas does Thailand hope to attract Chinese companies to invest in? What new policies have Thailand introduced to attract investment from Chinese companies? These issues are currently the most concerning topics for Chinese enterprises.

China is an important strategic partner of Thailand, playing a crucial role in promoting Thailand's economic development in areas such as investment, trade, and tourism. In the past decade, China has been the second largest foreign direct investment country in Thailand. In 2019, China surpassed Japan as the largest source of foreign direct investment. According to Huacheng Import and Export Data Observation, in 2022, China will continue to become Thailand's largest foreign investor, accounting for 18% of Thailand's total foreign direct investment. Among them, 158 projects applied to the Thailand Investment Promotion Commission for assistance in promoting investment, with a total investment amount of 77.381 billion baht, an increase of 108% compared to 2021.

The Secretary General of the Thailand Investment Promotion Commission, Nali Tesatirasha, stated that this year marks the tenth anniversary of the establishment of a comprehensive strategic partnership between Thailand and China. From January to March, 38 projects from China applied for investment promotion, with an investment amount exceeding 250 million Thai baht. In early April, a delegation from the Thailand Investment Promotion Commission visited China, during which an investment roadshow in China received good feedback, indicating the confidence of Chinese investors in Thailand's potential to become an important commercial hub in the region. In June of this year, Thailand will host the 16th World Chinese Business Conference, with an estimated 4000 Chinese businessmen participating. These signs all indicate the investment prospects of Chinese companies in Thailand.

From the perspective of investment fields, in 2022, China will become the largest source of foreign direct investment in Thailand, with five industries including electronics and electrical, automotive machinery, light industry, chemical industry, and digital services attracting more investors. This aligns with Thailand's development direction of prioritizing investment in biological, circular, and green economy models, electric vehicles, smart electronics, digital, and creative industries, greatly enhancing Thailand's competitiveness in these industries, "said Nari Tesatirasha.

Chinese companies have shown great interest in investing in Thailand's electric vehicle industry. According to Nari Tesatyrasa, during the China roadshow in April, a delegation from the Investment Promotion Committee visited major electric vehicle manufacturers such as Chang'an, Geely, BYD, Jianghuai, and Jiangling Motors. They all expressed a strong desire to invest in the electric vehicle manufacturing industry in Thailand and strong support for making Thailand a regional electric vehicle production base. It is expected that Thailand will attract approximately 20 billion baht of electric vehicle investment from China next year, excluding the six projects with a total value of over 30 billion baht that BYD has applied to invest in. Huacheng Import and Export Data Observation reports.

Chinese companies also have a strong interest in investing in the electronics industry, especially in the manufacturing of electronic products used in automobiles and communication equipment. Nari Tesadirasha told reporters that Thailand has successfully attracted multiple Chinese investors who hope to expand their production bases in Thailand. For example, electronic component manufacturers and printed circuit board companies such as Kunshan and Oscon plan to invest over 120 million baht and bring about 200 suppliers to Thailand.

Compared to other Southeast Asian neighbors, Thailand has a good investment environment, superior strategic location, high logistics level, strong policy support, and abundant natural resources. At the same time, Thailand also has advantages such as complete supporting industries, high-quality labor force, huge domestic market potential, and good international relations. In addition, Thailand's low cost of living, convenient transportation, and friendly living environment for investors of all nationalities provide convenience for investors, as reported by Huacheng Import and Export Data Observation.

According to Huacheng Import and Export Data Observation, in order to attract more investment, in January this year, the Thailand Investment Promotion Commission proposed 9 investment promotion measures for 10 industries, aiming to establish a new economy based on innovation, competitiveness, and inclusiveness, while also taking into account environmental and social sustainability. To this end, the Thai Investment Promotion Commission has also established a Strategic Investment Special Operations Center to further enhance the convenience of foreign enterprises doing business in Thailand.

Nari Tesadirasha stated that under the new strategy, Thailand has provided investors with a series of benefits, including a 13 year corporate income tax exemption. Investors can benefit from premium incentives for high-tech projects such as biotechnology, nanotechnology, and advanced materials, involving technology transfer and cooperation with Thai higher education institutions and research institutes. In addition, Thailand has also issued a preferential policy that provides special incentives such as additional corporate income tax exemptions or corporate income tax exemptions for long-term investors who have received investment benefits in at least 3 projects over the past 15 years and have invested no less than 10 billion baht in new or expanded projects. In addition, projects invested in technology and innovation, human resource development, and supplier potential development will also receive additional corporate income tax exemptions, as reported by Huacheng Import and Export Data Observation.