Chinese investment in Thailand expected to rise

Chinese investment in Thailand will continue to rise despite the slowing economy in China and weak global growth, as the Kingdom’s strategic location remains an attraction for investors, the head of the Thai Chinese Chamber of Commerce said last week.

Thailand’s Finance Minister also said that China is considering a stake in the Thailand Future Fund, which will be used to support infrastructure development in the Kingdom. Minister Apisak Tantivorawong related China’s interest after leading a delegation of Thai government officials and private sector executives to Beijing where they met with Chinese state officials and private sector investors.

Among those they conferred with was the China Investment Corporation (CIC), a sovereign wealth fund responsible for managing part of China’s foreign exchange reserves. The CIC told the Thai team it was interested in taking a significant stake in the Thailand Future Fund because it has an investment policy similar to its own that seeks investment opportunities in quality and secured assets with potential for strong returns over the long term.

The $2.8 billion Fund will be listed on the Stock Exchange of Thailand, with $10 billion in seed money from the Thai government. Thailand and China are close to completing the final touches on agreements for China to invest in building high-speed and other rail lines in Thailand as part of a massive infrastructure upgrade worth tens of billions of dollars. The upgrade will include new or improved rail lines, roads, ports, airports and logistics facilities and services.

The rail lines, in particular, will help link Thailand with its mainland neighbors in the ASEAN (Association of Southeast Asian Nations) Economic Community, the new free-trade and investment zone in the region. They will also, however, link southern China with the region all the way down to Singapore.

Thailand’s strategic location in mainland Southeast Asia is also a key attraction for investment by China’s private sector, according to Jitti Tangsithphakdi, president of the Thai Chinese Chamber of Commerce.

He said China’s slowdown has forced the Chinese to invest more outside the country and the nearby ASEAN region is an ideal destination. Although growth has been slower in Thailand recently compared to past decades, Chinese investors still have confidence in the Kingdom’s economic prospects, he said.

“We are all businessmen and we will keep investing here even though the economy has yet to fully recover,” said Jitti.

According to Thailand’s Board of Investment, in the first nine months of 2015, China was the fourth biggest foreign investor in Thailand with investments submitted to the Board worth more than $337 million.