The Board of Investment (BOI) has observed a consistent flow of investment applications from China. These are particularly in Electric Vehicles (EV), electronics, and digital industries. Over the past six years, more than 900 investment projects from China, amounting to over 526 billion baht, have been submitted to the BOI.
The influx of Chinese investors, including businesses from China and foreign investors based there, is proving beneficial for Thailand. As China’s economy, the world’s second-largest, faces a slower recovery, investors are seeking opportunities in the ASEAN region. The region offers robust economic growth and attractive foreign investment measures. Among the ASEAN nations, Thailand stands out, garnering attention from Chinese investors.
Thailand set to become an EV production hub
The Secretary General of the BOI, Narit Therdsteerasukdi, has highlighted a growing trend of Chinese investors relocating their operations from China to Thailand. This shift is due in part to Thailand’s strong position in the EV industry. The government has supported initiatives that promote its growth. Thailand aims to become a regional hub for EV production.
Chinese investors have already made significant investments in Thailand’s EV sector. Chinese EV companies like MG, Great Wall Motors, BYD, and Neta are leading the way. Additionally, Chang An Automotive and GAC Ion have announced their intentions to invest in this sector. The investments extend beyond car production to encompass related industries such as battery manufacturing and other essential EV components.
In the electronics realm, geopolitical tensions, including the trade war between China and the United States, have driven a consistent inflow of investments from China. This has prompted electronic manufacturers to seek production bases outside of China to mitigate potential business risks. Thailand’s well-established electronics supply chain readiness and positive international relationships make it an attractive destination for such investors.
Recent developments indicate a notable increase in Chinese electronics companies investing in Thailand. Taiwanese companies that have previously invested in China are also eyeing investment opportunities in Thailand, particularly in the production of printed circuit boards (PCBs). There are plans to make Thailand an ASEAN production hub. Additionally, China is channeling investments into Thailand’s digital industry. Companies like Huawei and Alibaba are expanding their cloud and digital-related businesses in Thailand.
Foreign Direct Investments totaling half a billion baht
Foreign direct investment statistics for 2022 reveal 1,070 projects totaling 433.97 billion baht. This value marks a 42% increase in projects and a 36% increase in investment value compared to the previous year. China led in investment value, contributing 77.38 billion baht across 158 projects. The first half of 2023 continued the trend, with 507 projects amounting to 304.04 billion baht – a 33% increase in projects and a remarkable 141% increase in investment value from 2022. During this period, China led with 132 projects and an investment value of 61.53 billion baht.
As of June 30 this year, foreign corporations have invested a total of 9.63 trillion baht through 118,364 projects in Thailand. Chinese investments contributed significantly, totaling 304.96 billion baht through 23,043 business entities.
The top sectors attracting Chinese investment include tyre and rubber production, motor vehicle parts and accessories manufacturing, basic iron and steel manufacturing, real estate transactions, and electricity generation and distribution. Moreover, China’s investments extend to aviation maintenance, with the Aviation Industry Corporation of China (AVIC) partnering with Chiang Rai investors to establish Chiang Rai Aviation Holdings. This venture, set to begin operations around July 2024, is expected to involve capital injection of approximately 722 million baht.