"Belt and Road " Initiative Boosts Trade and Investment cooperation

between China and Thailand

The Eighth Thai – Chinese Strategic Research Seminar

Asst Prof. Li Renliang , Ph. D. (NIDA)

Xu Zhihui (Changzhou U.)

Huaqiao University , Xiamen

25-29 June 2019

Content:

1. Introduction

2. Purpose of research

3. Research Method

4. Conceptual framework

5. Research Result

Content:

1. Introduction

2. Purpose of research

1) to analyze the form and direction of trade and investment cooperation between China and Thailand Based on geopolitical changes and China's “Belt and Road” initiative and

2) to put forward the policy of promoting China-Thailand trade and investment cooperation to meet the opportunities and challenges brought by the "Belt and Road” initiative.

Content:• Research Method

• Conceptual framework

China•Context of social and Economic development

•Belt and Road Initiative

•Made in China2025

Thailand

•Context of social and Economic Development

•Thailand 4.0• (EEC)

“Five Links”

• Policy Coordination

• Facilities Connectivity

• Unimpeded Trade

• Financial Integration

•People-to-people Bond

Future cooperation

•Opportunities

•Challenges

Recommendations:•Policy to deal with Belt and Road Initiative

China-Thailand cooperation

•Trade

•Investment

Research Result

• 1. Review and Prospect of China-Thailand Trade

• 1.1 Review of China-Thailand Trade• Table 1: trade between China and Thailand , year 2010-2018 (Jan.- Nov.) Unit: Hundred Million Baht

year Trade volume Thai export to China Thai import from China Balance Growth

%

2010 457.13 214.73 242.4 -27.67 37.9

2011 577.9 271.3 306.6 -35.2 25.7

2012 612.8 257.57 349.77 -92.2 7.7

2013 644.4 268.3 376.1 -107.9 0.5

2014 633.6 248.3 385.4 -137.1 -1.7

2015 642.2 233.1 409.1 -176.0 1.4

2016 658.4 235.8 422.6 -186.8 2.5

2017 741.4 294.1 447.3 -153.3 12.6

2018 736.6 275.1 461.4 9.5

Research Result

0

100

200

300

400

500

600

700

800

2010 2011 2012 2013 2014 2015 2016 2017 2018

trade between China and Thailand , year 2010-2018

trade volume Thai export to China Thai import from China

Source: edit by researcher according to the statistics of Customs Bureau of Thailand

1. Review and Prospect of China-Thailand Trade

• 1.2 Trade Target of China and Thailand

On October 11, 2013, the People's Republic of China and the Kingdom of Thailand issued the

Long-term Plan for the Development of China-Thailand Relations in Bangkok. The two sides

reiterated their hope to achieve the target of 100 billion US dollars in bilateral trade by 2015.

On 23-26 August 2018, State Councilor Wang Yong went to Thailand to hold the sixth

meeting of the China Thailand Economic and Trade Commission and attended the

relevant economic and trade activities jointly with Thai side. The two sides proposed the

goal of bilateral trade volume to reach US $140 billion by 2021.

1. Review and Prospect of China-Thailand Trade

• 1.3 Analysis and Prospect of China-Thailand Trade

• 1.3.1 Since the ASEAN-China Free Trade Agreement became effective, the trade volume between China and Thailand has steadily increased.

• 1.3.2China is Thailand's largest export market and import market, and Thailand's largest trading partner; second, whether it is China's surplus or Thailand's surplus, the balance is not very large. As long as trade is bigger, it is beneficial for both sides, and both sides are satisfied with the current trade situation.

1. Review and Prospect of China-Thailand Trade

• 1.3.3 From 2010 to 2018, the commodity trade structure between China and Thailand has basically not changed.

• 13.4 Despite the agreement reached by the two governments, bilateral trade will reach $100 billion by 2015 and $140 billion by 2021. it is necessary to make a breakthrough in order to achieve the goal.

1. Review and Prospect of China-Thailand Trade

• The first is policy communication.

• China-Thailand cross-border e-commerce cooperation has broad prospects.

--fruits and agricultural products

-- “one Tambon, one Product”

--high-quality goods with Thai local characteristics

2. Review and Prospect of China-Thailand Investment

• 2.1 Review of China-Thailand Investment

• Table 2: China’s Direct Investment in Thailand, year 2015-2017. Unit: Hundred Million Baht

Project China’s investment in Thailand Foreign investment in Thailand China/foreign

No. of Project volume No. of Project volume Ratio

(project)

Ration

(volume)

2015 53 124.56 559 1065.40 9.8 11.6

2016 104 325.37 908 3010.13 11 11

2017 87 275.14 818 2826.96 11 10

Source: edit by researcher according to the statistics of board of Investment, Thailand

2.1 Review of China-Thailand Investment

53104 87

559

908818

124.56

325.37 275.14

1065

3010

2826

0

500

1000

1500

2000

2500

3000

3500

2015 2016 2017

China's investment/foreign investment in Thailand.Unit: Hundred Million Baht

No. of project from China total No. of project volume from China total investment volume

2.1 Review of China-Thailand Investment

0

200

400

600

800

1000

1200

1400

Japanese Singapore China America Netherlands Taiwan Malaysia Hong Kong Indonesia Australia

Top 10 countries invest in Thailand, year2017Unit: Hundred Million Baht

No. of project volume

8,032

4,7005,882

74

2,318

7,077

8,5887,819

6,056

7,474

3,432

20,645

0

5,000

10,000

15,000

20,000

Japan ASEAN EU China USA Others

Thailand FDI Inflow in 2008 and 2017泰国2008年和2017年外国直接投资流入

2008 2017

FDI Inflow from China increased from 0.26% in 2008 to 13.57% in 2017

Source: Bank of Thailand 14

Japan28.60%

ASEAN16.73%EU

20.94%

China0.26%

USA8.26%

Others25.20%

Japan15.90%

ASEAN14.48%

EU11.21%

China13.84%

USA6.35%

Others38.22%

Proportion of Thailand FDI Inflow(2008 and 2017 Comparison)泰国外国直接投资流入比例

(2008年与2017年相较)

Unit: Million USD

2017

2008

2.2 Analysis and Prospect of China-Thailand Investment

• 2.2.1 As mentioned above, in recent years, except large enterprises such as C.P., there are few new projects invested by Thai enterprises have taken root in China. Almost all the statistics, academia and media have not paid attention to the investment situation of Thai enterprises in China. The reasons are worth considering.

• 2.2.2 Thailand has become a hot spot for attracting investment. In 2016, Thailand launched the Thai 4.0 strategy and the Eastern Economic Corridor Plan again, aiming at attracting foreign investment, creating a miracle for the next 30 years, so that Thailand can take off, cross the trap of middle-income countries and enter developed countries. Of course, the investment projects encouraged by the Thai government are different from those 40 years ago. Thailand 4.0 drives economic development with innovation and technology.

Eligible Activities for the EEC Package

16

5 New S-Curve

5 First S-Curve前5个s曲线产业

Targeted Industries in

the EEC

117 Categories in Total

共计117类

S-Curve Industries S曲线产业

Activities Supporting S&T

科技促进活动

BasicInfrastructu

re基础设施

Food for The Future未来食品

Digital Economy数字经济

Medical Hub医疗中心

Automation

and Robotics自动化与机器人

Aviationand Logistics

航空与物流

Agricultural and

Biotechnology农业与生物技术

Smart Electronics

智能电子

Affluent Medical

& Wellness Tourism

高品质观光和医疗

Next-Generation Automotive

新一代汽车

Biofuels and Biochemical生物燃料

和生物化学

2.2 Analysis and Prospect of China-Thailand Investment

• 2.2.3 In order to achieve economic growth, Thailand takes its own advantages to promote investment and to attract foreign investment.the Thai government is also confident of realizing the Thailand 4.0 strategy.

• there is no doubt that more and more enterprises will choose to invest in Thailand. It is a highlight of the two countries' economic and trade cooperation as well as a model of policy communication and interconnection of "belt and road" construction between China and Thailand, and Thailand 4.0 strategy, the Eastern Economic Corridor plan.

EEC: KEY STRATEGIC INITIATIVE EEC: 关键战略举措

18

1. High Speed Rail Linked 3 Airports连接3个机场的高速铁路

2. Double-Tracks Rail Linked 3 Seaports连接3个海港的双轨铁路

3. Highways & Motorways 公路和高速公路

4. Digital Infrastructure 数字基础设施

• Next-generation Automotive新一代汽车

• Smart Electronics智能电子

• Agriculture & Bio Technology农业与生物技术

• Food for the future未来的食物

• Robotics & Automations机器人与自动化

• Aviation & Logistics航空物流

• Bio Energy & Bio Chemicals生物能源与生物化学品

• Medical & Health Industry医药卫生产业

• Digital Industry数字产业• EEC of Innovation (EECi) EEC创新区

• Digital Park Thailand (EECd) 泰国数字园

Target Industries

目标产业

Infrastructure 基础设施

Technology & Innovation科技与创新

Human Resource Development

& Education

人力资源发展与教育

Become the Center of CLMVT Regions成为柬老马越泰地区的中心

Highways and Railways Connectivity in the GMS(Greater Mekong) Subregion GMS中的公路与铁路互联互通（湄公河次区域）

21China

3

4

5

6

7

8

9

10

11

12

13

14

15

18

19

21

20

22

23

24

25

26

27

17

16 operating操作

constructing建设

planning规划

Thailand 泰国

Myanmar

缅甸 Lao 老挝

Vietnam越南

มาเลเซีย

Cambodia

柬埔寨

DOH

สพพ.

Private/ others

20. Phu Nam Ron – Thailand-Myanmar border 浦南隆-泰国-缅甸边境21. Kanchanaburi - Dawei 北碧府- 达威22. Friendship Bridge (Mae Sot) 友谊大桥（梅索）23. Friendship Bridge 2(Mae Sot) 2号友谊大桥（梅索）24. Myawaddy – Dawna Foothill 克钦邦妙瓦底- 达瓦那山丘25. Dwana foot print – Kawkareik 达瓦那山脚-高加力26. Kawkareik - Thaton 高加力-直通27. Friendship Bridge (Mae Sai) 友谊大桥-梅索

Thailand – Lao PDR (11 projects) 泰国-老挝人民民主共和国（11个项目）

1. Friendship Bridge 4 (Chiang Khong-Huay Sai) 友谊桥4号（清孔会晒）2. R3A in Laos 老挝R3A

3. Huay Kon – Pak Beng 万象-琅勃拉帮4. Hinhway No.13 North – Sang Kha Lok 北13号-欣恩危-桑哈乐5. Phu Du – Pak Lai 富都-帕府6. Highway No. 11 Lao PDR 老挝第11号高速公路7. Bridge across Huang River, Tha Li, Loei 黄河-黎府大桥8. Friendship Bridge 1 (Nong Khai-Thanaleng) 龙开-塔呐冷1号友谊大桥9. Road access Ban Woen Tai Pier 通往班文泰码头的公路10. Friendship Bridge 3 (Nakhon Panom-Kham Mouane) 3号友谊大桥（纳贡帕纳姆-康穆）

11. Friendship Bridge 2 (Mukdahan-Savannakhet) 2号友谊桥（莫拉限-沙湾拿吉）

-沙湾拿吉Thailand – Cambodia (3 projects) 泰国-柬埔寨（3个项目）

12. Road No. 67 Chong Sa Ngam – Siem Reap 崇萨恩格姆-暹粒67号公路13. Road No. 68 Chong Chom - Kralanh 崇萨恩格姆-克拉兰68号公路14. Road No. 48 Ko Kong – Sre Ambel 高孔-斯雷姆阿贝尔48号公路

Thailand – Malaysia (5 projects) 泰国-马来西亚（5个项目）

15. Bridge across Kolok River, Tak Bai 横跨洛克河与达拜的桥梁16. Bridge across Ko Lok River 2, Sungai Kolok 横跨2号洛克河与孙该寇洛克的桥梁17. Bridge across Ko Lok River 3, Bu Ke Ta 横跨3号洛克河与步克塔的桥梁18. Nathawi-Ban Pra Ko 纳塔维-班帕空19. Kuan Sa Taw-Wang Pra Chan 宽沙涛-旺帕产

Thailand – Myanmar (8 projects) 泰国-缅甸（8个项目）

Key Projects: Road Network 重点工程：道路网

ASEAN Connectivity 东盟连通性

20Source: Department of Highway资料来源：公路部

2.2 Analysis and Prospect of China-Thailand Investment

• 2.2.5 It is worth mentioning that "Made in China 2025". Six of the 10 emerging industries proposed by China are identical with Thailand 4.0 strategy.

• 2.2.6 In the process of China-Thailand economic and trade cooperation, Thai people's trust and acceptance of Chinese product quality and corporate social responsibility (CSR) of Chinese enterprises in the process of investment in Thailand need to be further improved. Therefore, these all affect the sustainable and stable development of Chinese enterprises' investment in Thailand, thus affecting China-Thailand economic and trade cooperation.

Conclusion

1. Since the establishment of diplomatic relations between China and Thailand,

2. Economic and trade cooperation has been growing steadily.

3. It is difficult to achieve the goal in the near future only by relying on traditional trade patterns and products.

4. Therefore, we must take the "belt and road" initiative as an opportunity to strengthen interconnection and make use of new models such as cross-border e-commerce to achieve substantial growth in trade.

Conclusion

• 1.with the development of China's economy and the enhancement of the strength of private enterprises, there is still much room for the direct investment of such a big country like China.

• 2."Belt and road", "made in China 2025" and "Thailand 4.0" and the Eastern Economic Corridor can achieve a good connection, which can boost Chinese enterprises’ investment industry characterized by innovation and science and technology.

• In order to realize the sustainable development of Chinese enterprises' direct investment in Thailand, it is necessary to study Thailand's laws and regulations, customs, consumer psychology and corporate social responsibility, integrate them into Thai society, and make Thailand as the second home, so that China's investment in Thailand will be beneficial to Chinese enterprises, local people and both countries.

谢谢大家！Thank You