Thais concerned about growing Chinese economic presence

Mark O'Neill February 06, 2020 08:01

As I board the taxi at Bangkok airport with my Hong Kong taitai, the Thai driver says in perfect Mandarin: “你們要不要去出名的水產市場？我帶你們." ("Would you like to go to the famous fish market? I can take you.”)

The next day we visit the large Kinokuniya bookstore in the downtown Siam Paragon shopping mall. Next to the many shelves of Thai and English books are dozens of titles from Taiwan, Hong Kong and mainland China, in traditional and simplified characters. There are many textbooks to study Chinese.

“Mandarin is an option in primary and secondary school and many want to learn it,” says a sales lady. “So Thais buy these titles, as well as Chinese.”

Few countries in the world have opened their doors to Chinese more than Thailand. In 2019, 11 million Chinese visited the country, the largest single source of tourists for Thailand’s biggest industry.

In 2019, the country attracted a record 39.7 million visitors. Those from China are among citizens from 19 countries who can obtain visas at Thailand's entry points for a fee of 2,000 baht (US$64.04).

This is one reason why as of Monday, Thailand has 19 coronavirus cases, the second largest number of any country outside China, after Japan with 20.

In the first 11 months of last year, Chinese tourists spent 504.2 billion baht, 22 times the 23.15 billion baht they spent in 2009.

They like to visit Thailand because of the ease of entry, the short travel time from China, a warm climate, beach resorts, the sex industry, varied cuisine and a well-developed tourist industry.

In 2018, Thailand ranked fourth in the world for Chinese property investment, with estimates of purchases of US$2.3 billion. In the first nine months of 2019, Chinese accounted for 57.6 percent of foreign ownership of condominiums in the country.

In 2019, China overtook Japan for the first time as the largest foreign investor in Thailand. According to the Board of Investments, Chinese applications last year reached a record 262 billion baht, compared to 73.1 billion by Japanese firms.

Chinese companies are strong in trade, logistics, services and education. One reason for this increase is the Sino-US trade war, which has persuaded Chinese firms to move some or all of their production out of the mainland, to maintain easy access to the US market.

Popular choice

Thailand is a popular choice for such investments, along with Vietnam, Indonesia, Myanmar and Bangladesh.

By the end of 2018, 120 companies had been established in the Thai-Chinese Rayong Industrial Zone on Thailand's eastern coast, with 32,000 Thai employees in the park.

Thailand wants to develop its East Economic Corridor (EEC) into a high value-added industrial zone, with Chinese investors playing a vital role.

"Chinese enterprises are the key players in coming to invest in the EEC," said Dr. Phaichit Viboontanasarn, vice chairman and secretary general of the Thai Chamber of Commerce in China.

The country’s e-commerce market last year was worth US$5 billion. It is dominated by Lazada and Shopee. Lazada is majority-owned by Alibaba and Shopee a Singapore e-commerce firm. Cross-border products, most of them from China, account for more than 50 percent of the e-commerce market.

In the first nine months of last year, bilateral trade stood at US$66.4 billion, up 1 percent over the same 2018 period.

In 2003, the two countries lifted tariffs on fruit and vegetable trade, under the terms of the China-ASEAN Free Trade Agreement. The zero tariff helped to push Thai exports of fruits and vegetables to China to US$1.93 billion, an increase of more than 10 times since 2002.

But scholars worry that Thailand is becoming too dependent on China. “If China catches a cold, Thailand will catch the same bug,” said Somkiat Tankitvanich, president of the Thailand Development Research Institute.

Growing influence

“Many Thai businesses have been relying on Chinese capital.  Too much dependence will put Thailand at risk.”

Aat Pisanwanich, director of the Centre for International Trade Studies at the University of the Thai Chamber of Commerce, said China’s growing influence was worrisome.

“The government should improve regulations to supervise foreign investments and protect Thai investors. The government should not be too open to Chinese investment, or any other foreign investment, since they may eventually cause Thai people to lose their occupations.

“I am optimistic,” said John Douglas, a business consultant who lives in Bangkok. “Foreign investment here is diverse, from many countries. There are also many financially powerful Thai conglomerates. This gives the country a protection lacking in Laos and Cambodia, where Chinese capital is dominant. Thailand will not become too dependent on China.”

Another reason for the good relations is the fact that Chinese are extremely well integrated into Thai society. They use Thai names, speak Thai and are well represented in business, the government, politics and the military.

They are not a distinct class, as overseas Chinese are in Malaysia and Indonesia.

Thai Chinese are the largest minority group in Thailand and the largest overseas Chinese community in the world, with 10 million people accounting for about 14 percent of the total population.

– Contact us at [email protected]

RT/CG

Mark O'Neill

A Hong Kong-based writer, teacher and speaker.