Japan investment to shift towards services: Jetro Bangkok head
THE NEWLY appointed president of the Japan External Trade Organisation’s Bangkok office has unveiled his country’s new investment plan to focus on the service sector and the creative economy after long concentrating on the industrial sector.
Hiroki Mitsumata said yesterday that Japan had entered a new era of investment that would focus more on service business as well as high-technology and creative industries.
Japan’s investors now are more interested in services such as hospitality, medical, retail, digital content, and high tech.
He said the government’s “Thailand 4.0” policy, which will focus on high-technology industry and innovation, was the right way to go. However, Thailand should prioritise its plans and set clear-cut policies on which industries will be promoted in the short, medium and long terms, so that foreign interests, including Japanese, could know which industries to invest in first.
Also, the government should amend its laws and regulations to facilitate investment in targeted industries, particularly the Foreign Business Act, which restricts many service businesses to Thai majority ownership, the Jetro Bangkok president said.
Mitsumata said the protection of some service businesses could be relaxed, such as retail and other sectors that Thailand needs to develop.
Moreover, with seamless global trade, Asean countries including Thailand are becoming centres for Japanese investment instead of China. By 2012, Japanese investment in Asean nations was double that in China, he said.
Mitsumata said Thailand could continue to be a centre of Japan investment for the long term, depen-ding on the government’s policy to promote and facilitate investment.
He remarked that as Thais had approved the draft constitution in a referendum, Japanese investors expected the military-led government to follow its road map for setting up a national election and restore democracy next year. Stable politics and the government’s economic stimulus plans are two major factors encouraging Japanese investment and business expansion in Thailand.
Investment privileges and tax exemptions authorised by the Board of Investment are also favoured by Japanese investors.
Mitsumata added that some Japanese investors, such as in the electronics and electrical-appliance industries, might opt to invest in Vietnam instead of Thailand as that country will enjoy privileges under the Trans-Pacific Partnership, which Thailand has not yet decided to join.
According to the Japanese Finance Ministry, as of the end of 2015, Thailand was Japan’s second-largest investment destination in Asean after Singapore. Combined initial investment capital from Japan to Thailand was worth US$55 billion (Bt1.9 trillion).
The BOI has reported that Japan is Thailand’s leading foreign direct investor, accounting for 39 per cent of total FDI, followed by Singapore at 12 per cent, mainland China at 7 per cent, Hong Kong 6 per cent, Taiwan 5 per cent, and others 36 per cent.
Meanwhile, Japan has also encouraged more Thais to invest in Japan. The Jetro Bangkok president said industries that Thais could invest in included medical services, hospitality such as hotel management, and spa operations.
As of the end 2015, combined investment from Thailand to Japan was worth $1.4 billion.
Thailand is the second-largest Asean investor in that country after Singapore.
