China tops Thailand’s FDI chart but ‘more investment going to Vietnam’
China topped the chart of foreign direct investment (FDI) in Thai industrial estates last month, accounting for 23.68% of total FDI of 14.76 billion baht.
Singaporean investors were second (12.41%), followed by Japanese (11.65%), Indian (6.39%) and Taiwanese (6.02%), said the Industrial Estate Authority of Thailand (IEAT) on Sunday.
IEAT governor Veeris Ammarapala said the trend of Chinese businesses moving their manufacturing bases to Southeast Asia started last year, with Thailand and Vietnam the most popular choices for top-tier electronic manufacturers.
Another factor driving Chinese investment is agreements signed between the two countries at last year’s Apec Summit to promote joint investment under China’s Belt and Road Initiative and the Thailand 4.0 policy, Veeris said.
He added China also topped the chart for FDI in 2022 with 77.3 billion baht of the total 433 billion baht. Next came Japan with 50.7 billion baht, followed by the United States (50.3 billion baht), Taiwan (45.2 billion baht) and Singapore (44.2 billion baht).
“We expect to see more Chinese investors establish manufacturing bases in Thailand this year after China lifted travel restrictions for its people,” he said. “The IEAT will work with related agencies to promote investment in target industries including electric vehicles, smart electronics, medical, bio and circular industries.”
The CEO of factory logistics company WHA Corporation said it has been contacted by several Chinese businesses looking to buy land in WHA’s industrial estates.
“This year we will likely see more Chinese investors entering Thailand than last year, as Chinese manufacturers are looking for new markets and bases to avoid trade disputes with the United States,” said Jareeporn Jarukornsakul.
WHA expects Chinese investors to contribute 50% of the company’s land sales this year, increasing from 46% in the last quarter of 2022. The three industries forecast to attract most Chinese investors are electric vehicles, electronics, and consumer products.
WHA has also benefited from Chinese manufacturers migrating to Vietnam, where it has built infrastructure for the low-end electronics manufacturing industries.
Viboon Kromadit, chief marketing officer and executive director at Amata Corporation, said the company has recorded growing sales in its industrial estates among Chinese investors since mid-2022.
Chinese clients now account for nearly 50% of the company’s sales, overtaking Japanese clients who used to be top, he added.
Land on Amata industrial estates is being bought up by Chinese EV, food, data centre and e-commerce businesses.
However, Viboon said an even larger amount of Chinese investment is going to Vietnam, lured by more favourable FTA conditions, especially in the renewable energy industry.
“We are also seeing increasing sales among clients from Europe and the United States,” he said.
He also warned the new government not to raise the minimum wage too high as this would increase manufacturing costs and drive investors away.
