Korean businesses keen on Eastern Economic Corridor
South Korean businesses are expressing strong interest in investing in Thailand’s Eastern Economic Corridor advanced development zone in order to balance out and minimize risks from investing in China as tensions on the Korean peninsula rise, according to an official with the Korea Trade-Investment Promotion Agency.
“Many Korean investors used to focus on China because of its large market size of more than one billion consumers. However, things have changed. The intensifying geopolitical tension is making us think about diversifying risks by moving our production bases,” saidKim Nam-Wook, deputy director-general of the Korea Trade-Investment Promotion Agency, or KOTRA.
Kim made the comments on the sidelines of a seminar held by his agency last week that sought to create business matches between Korean firms, their counterparts in Thailand and others for the purpose of investing in Thailand, particularly in the Eastern Economic Corridor (EEC) advanced development zone.
The EEC covers three provinces east of Bangkok and will be home to 10 priority industries that the government will support in its bid to evolve the Thai economy from one that relies on assembly-line manufacturing to one driven by innovation, creativity, and research and development.
The seminar was attended by over 100 companies from South Korea as well as companies from India, Europe and other countries from the Association of Southeast Asian Nations (ASEAN). Many expressed interest in investing in the vehicle parts and electronic parts industries, and also the cosmetics and beauty industries, along with consumer goods.
“We are interested in Thailand because it is the Detroit of Asia so it is quite easy to create a supply chain here to produce and export to other ASEAN countries,” Kim said.
Over 300 Korean companies operate in Thailand and Kim said he expected that number would double during the next few years. In 2016, Korean companies submitted investment applications to the Board of Investment worth $268 million. Korea is the eighth largest foreign investor in Thailand.
Korea’s neighbor to the east, Japan, is also interested in investing in the EEC, according to Hiroki Mitsumata, president of JETRO, the Japan External Trade Relations Office.
“Japan’s total investment value in Thailand is increasing every year, and it is a sustainable investment that continues to add value and growth to the Thai economy,” Mitsumata said.
He noted that Japan has been the biggest foreign investor in Thailand over the past three years, and that most Japanese companies continue to view Thailand as the best place to base their operations in order to reach all 10 countries of ASEAN.
Clear and favorable investment policies, and well-developed infrastructure are the factors that make Thailand the preferred location for Japanese investors in the region, Mitsumata said.