2004-08-30 10:36:30 UTC
Published on Aug 30, 2004
The government should closely monitor Chinese efforts to increase its
investments in the Greater Mekong Sub-region (GMS), which Thailand has long
considered its backyard, the Kasikorn Research Centre (KRC) has said.
Beijing recently implemented a policy to help Chinese businesses take advantage
of trade liberalisation and trade-barrier reductions to invest abroad,
particularly in its southern neighbours.
China wants to exploit its close relationship and proximity to countries of the
GMS, such as Burma, Cambodia, Laos and Vietnam.
The KRC has evaluated Thailand and China’s activities in the sub-region and
found that Thailand is the leading provider of foreign direct investment in
Laos and Burma, accounting for 64 per cent and 39 per cent of the foreign
capital in the two countries, respectively, over the past 10 years. Chinese
ranks second in Laos and seventh in Burma.
Thailand’s ventures in Laos have been on the ebb since the Asian economic
crisis in 1997. Its investments in Laos dropped from US$5 million (Bt208
million) in 1998 to $2.5 million in recent years. Chinese investments in Laos
have climbed from $2.7 million in 1998 to a staggering $15 million, mostly
earmarked for basic infrastructure.
In Burma, Thai investment has hit a dry spell for the last four years due to
the political situation there, while the Chinese presence has remained steady.
However, the state visits between Burmese and Chinese leaders since the
beginning of the year are expected to benefit the expansion of Chinese
investments in Burma, despite continuing pressure from the West.
China prevails in Cambodia, where its investment outpaces Thailand and ranks
third after Taiwan and Malaysia. So far, China has invested more than $80
million over the past 10 years, while Thailand occupies sixth place with
investment of $42 million over the same period.
Chinese investments in Cambodia mark a showcase among GMS countries due to the
close political relationship between the two countries. Thailand has upon
occasion had political conflicts with Cambodia that have periodically stalled
its investment in its eastern neighbour.
The Vietnamese market is still wide open. The role of Thailand and China still
lags behind other countries. In particular, Thailand ranks ninth, making up
3.28 per cent of all foreign direct investment in Vietnam, while China ranks
However, over the past five years China has actively poured capital in Vietnam,
averaging $30 million a year. If China continues to expand steadily into
Vietnam, it might outpace Thailand.
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