China was Thailand’s 3rd largest source of foreign direct investment last year with real estate a key sector, but some analysts do not believe the country has seen many benefits despite the surge in capital, reports Chinese media. Experts have pointed a finger at the tourism sector as being the main problem.
Relations between China and Thailand remained steady in the past few years and this has led to an increase in Chinese investment in the country. The 2 governments are also working with one another on special projects. China has supported the Eastern Economic Corridor plan that will revamp the Eastern Seaboard while Thailand is an active member of the Belt & Road initiative the Chinese government has been pursuing.
More cooperation could be on the way with railways, fintech, digital economy, and tourism all being discussed. Thailand continues to seek foreign investment to help support its economic recovery and has found a willing partner in China.
“Thailand is one of the economies in Southeast Asia that has been caught in the middle-income trap, and its industries have lost their edge in the global supply chain,” says Cheng Cheng, Associate Research Fellow at the Chongyang Institute for Financial Studies at Renmin University of China, to the Global Times.
The rise in Chinese investment has not been welcomed by everyone with some worried about the growing Chinese influence in Thailand’s real estate, e-commerce, and tourism sectors. There have not been any large scale projects developed to help the Thai public while Chinese companies have been able to benefit from their investment.
“The real problem is in the tourism sector. As more and more Chinese people travel to Thailand every year, some tourist agencies and real estate companies have been tapping into the Thai market, which has hurt the interests of local industries,” says Xu Liping, a Researcher of Southeast Asian affairs at the Chinese Academy of Social Sciences.
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