Source: Global Times Published: 2017-9-13
Stable diplomatic relations between China and Thailand have contributed to growing Chinese investment in the South Asian country in recent years, but some local people in Thailand are concerned about the trend and have not yet felt the benefits, experts said.
China became the third-largest source of foreign direct investment for Thailand in 2016, after Japan and Singapore, according to the website of the Economic and Commercial Counselor`s Office of the Chinese Embassy to Thailand.
Located at a crucial crossroads along the route of the China-proposed Belt and Road (B&R) initiative, Thailand is playing an important role and seeing an influx of Chinese investors.
Thailand has also come up with different policies to boost local economic growth - including the Eastern Economic Corridor, a plan to enhance connectivity between the Association of Southeast Asian Nations and the Indian Ocean Rim Association for Rcegional Cooperation - while its support for the B&R initiative will allow for more access to foreign capital, said Liu Jianying, an associate research fellow with the Chinese Academy of International Trade and Economic Cooperation.
"The two countries are eager for more cooperation in railways, fintech, digital economy and tourism," she said, referring to the reasons why Chinese investment has been surging in Thailand.
Foreign investment is crucial for the country`s economic recovery, Cheng Cheng, an associate research fellow with the Chongyang Institute for Financial Studies at Renmin University of China, told the Global Times on Wednesday.
"Thailand is one of the economies in Southeast Asia that has been caught in the middle-income trap, and its industries have lost their edge in the global supply chain," he said, noting that domestic consumption cannot fully support economic growth, and attracting more foreign players is necessary for the country.
However, the rapid growth of Chinese investment has raised some concerns in Thailand. Local newspaper the Bangkok Post said in a report on Monday that not everyone is happy with the growing Chinese influence in Thai real estate, e-commerce and tourism.
"The real problem is in the tourism sector," said Xu Liping, a researcher on Southeast Asian affairs at the Chinese Academy of Social Sciences. "As more and more Chinese people travel to Thailand every year, some tourist agencies and real estate companies have been tapping into the Thai market, which has hurt the interests of local industries," he told the Global Times on Wednesday.
In 2016, the number of tourists from the Chinese mainland to Thailand reached 8.77 million, an increase of 10.56 percent year-on-year, according to the China National Tourism Administration. As a result, Chinese travel companies are doing good business in Thailand, the Bangkok Post noted. And many giant tour operators from China have already formed companies in major tourist cities in Thailand such as Phuket, Chiang Mai and Pattaya.
Some tour guides working for Chinese agencies have taken jobs that local people used to have, which has caused anger and disputes, Xu noted.
"We can see more and more Chinese people coming to Thailand," Wang Guobin, president of the Bangkok Thai-Chinese Investment Association of Commerce, told the Global Times on Wednesday.
However, local businesses have no reason to worry about the increasing numbers of Chinese companies, as their projects represent just small-scale investment, which won`t become a threat, Wang said.
In spite of favorable policies to attract foreign investment, the volume and social impact of Chinese investment is still limited and many Chinese investors are hesitant about tapping into the Thai market.
Another reason why Thai people are not fully convinced of the bright side of Chinese investment is that there have been no large projects from which local people can benefit, Wang noted.
Due to the unstable political situation in the country recently, some large-scale projects like railway construction have been delayed for years.
After many delays, construction of a Sino-Thai rail project should be able to start by October after that timeframe was suggested by Thai Ambassador to China Piriya Khempon during a recent interview with the People`s Daily.
China and Thailand have agreed on two contracts worth 5.2 billion baht ($156 million) for design and supervision of the 250-kilometer Bangkok-Nakhon Ratchasima rail project, the Bangkok Post reported in August.
"Once the long-awaited high-speed railway becomes a reality, people in Thailand will enjoy greater convenience and may change their attitude toward Chinese investment there," Xu said.
Cheng Cheng is an associate research fellow with the Chongyang Institute for Financial Studies at Renmin University of China.