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Why we have to understand China role?
• China is a major trading partner of Thailand.
• China's role in world political and economic stage.
• China is fast developing policies, strategies and goals for new releases.
• Note that Thailand trades with China less than Malaysia, Vietnam, Singapore trade with China.
• For economic and financial stability.
• For energy security
• Through the Silk Road Strategy
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Why “Go Global”(走出去)?
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The investment objective of the Chinese economic and political power.
ที่มา : https://botanwang.com
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Economic power, China Based on the Strait of Malacca has high risk
Sudan and Angola
Strait of Malacca
Pass Myanmar
From Russia
Kazakhstan and Turkmenistan.
Iran And Saudi Arabia
From Canada
From Venezuela and Australia
Channel Japan
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AIIB: Tools for success of the Silk Road.• World Bank: USA• ADB –Japan• China: President Xi Jinping is set concept.
The Asian Infrastructure Investment Bank (AIIB) is
1. Sources of funding for developing countries2. Leading international reserves to exploitation.3. Linking transportation network in Asia. (For
trade and investment in China).4. Push the yuan as a major world currencies.5. Co-founder of 21 member countries, 57
countries will embark in late 2015.
Strength• Economic
-ASEAN is an important partner of China (12%) were the major markets of China.
-As a source of raw materials such as rubber, cassava, fruits.
-Chinese investment is very low-wage Natural Resources.
• Energy supply gas and oil.
-More countries are Partnering with China
Challenges• Economic
• FTA-ASEAN - China's tax cuts, but increased NTB.• Different levels of economic development.
• Energy• the Middle East are vulnerable Malacca Strait.
• Politics• ASEAN is the strategic importance of China and the
United States.
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China looks ASEAN as important and Challenges
ที่มา : http://www.ciis.org.cn/chinese/2013-11/07/content_6438775.htm
o Relations with China (the latest).Thailand, Laos, Cambodia, the Philippines, while China has a problem with
Vietnam, Myanmar, Malaysia.
o Trade-Jan - Aug 15, Chinese trade with Asia 54% (China's trade with ASEAN,
Thailand 12%, 2%).
o InvestmentAt the end of 2014, Chinese investment (cumulative) 68% Asia (ASEAN 5.4%
Thailand 0.3%).
o FinancingBSA China and ASEAN countries Using Chinese renminbi trade with all
countries.
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Relations Between China-ASEAN
Asia54%
Africa5%
Europe18%
Latin America
6%
North America
16%
Oceania1%
Trade b/w China-other regions
The attempt to link the Silk Road to The ASEAN. In addition, there is a marine railway.
China
China
Japan
• The railway in Laos
-Boten(Laos)- Vientiane (China).
• Indonesia (China) 16-Oct-58.
• Railway in Thailand
- Bangkok - Nong Khai (China)
– Bangkok - Chiang Mai (Japanese.
China
1
A Case Study of Thailand
• The location is at the center of Thailand with ASEAN. As the strategic importance of the Silk Road on the sea.
• FTA trade cooperation in the field of agriculture.• Cooperation investments such as railway eastern lines.• Other areas of cooperation; tourism, exchange of personnel
Etc.
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Cooperation Thailand - China today Through various partnerships as part of the "Silk Road".
ที่มา : http://www.voachinese.com/content/indonesia-high-speed-rail-20151016/3010652.html
Security of China in the region. The Chinese interests to dig Kra Isthmus, Southern Thailand
Strategic "marine Silk Road"• For energy security
• To stabilize the political and military. China's expanding influence between the Andaman Sea.
• To stabilize the economic security
Distance• 102 km wide and 400 meters deep and 25 meters.
• 10-year investment of 28,000 million USD.
• The fleet sailed garden together.
ท่ีมา : http://news.ifeng.com/a/20150518/43783020_0.shtml
• China is spearheading a gigantic financing scheme for the engineering part of the long-coveted and Chinese-dominated project of digging a 60 mile long canal across the Kra Isthmus in Southern Thailand on the Malay Peninsula.
Reason:1. Tackling the strategic Strait of Malacca
2. China's trade will grow because of increased shipping options.
3. Shorten the time and cost of shipping (1200 km).
Affects to other countries:
1. The Strait of Malacca
2. Reduce dependence
3. Competitiveness
4. Thailand increased security risk.
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China is interested to Kla Isthmus
ที่มา : http://bbs.tianya.cn/post-worldlook-1481459-1.shtml
China has tightening up relationship to Thailand
• China's policy of proactive strategies. Long-term ASEAN and its neighbors in the region. Located in the heart of ASEAN, Thailand Build networks with other countries in the region, Thailand is also a longtime ally of the United States.
• The Chinese government has a policy of not criticizing Thailand.
• Future strategic relationship Thailand - China will be more systematic.
Thailand’s strength• Thailand is a prime location as market base.
(Vietnam as a production base. Singapore is finance and accounting bases).
• Thailand is a major food manufacturer for China.
• China is a major trading partner of Thailand, as Thailand is China's third largest trading partner in ASEAN.
Thailand’s Weakness• Thailand has the people with knowledge of
social science rather than science.
• Thailand ‘s SME still lack the knowledge to take advantage of the Framework Agreement.
• Thailand has less skill language with English and Chinese.
• Thailand faced by SME's cost competitiveness of the CLMV.
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China looks at Thai economy: Thailand is more important.
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In addition, Thailand is a country to invest.
1. The size of the market, high consumer price level stable and high levels of market opening
2. Thailand infrastructure is better than many countries in the region.
3. The level of openness and optimism.
4. Bilateral Cooperation Thailand - China.
5. Long experience of FDI from abroad .
CLMV competitiveness
Source: Bank of Thailand
The OFDI from Thailand accelerated since 2012 to facilitate economic integration, particularly in regional trade flows under the AEC.
Inward FDI and outward FDI of Thailand, 2005-2014
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Northern Thailand Economy on ASEAN context
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Trade
Services
FDI
Labor
Capital Movement
Prefer intra-regional tradeMore Good flow across country using
cooperations and agreements provided
Increase competition, services plays more an economic driver Tourism and health care services
Competitive ability Loss make company moves out
Invest outbound
Relaxing restriction for neighboring country
Increase skill labor : language andInternational standard
More freely flow of capital, currency more votality
Entrepreneurs need to accelerate the adjustment in management costs and
exchange rate risks.
Thailand Stand Point
alwww.tanitsorat.com
Opportunities and Challenges of Thailand
Logistics Infrastructure North – South Corridor in Northern Thailand• Chiang Kong : International Road Gateway (KM –BKK)• Chiang Saen: Mekong River Gateway (Chiang Saen/Guan
Lei)•Mae Sod : Regional Road Gateway (Maewwadi – Mae sod)
40www.tanitsorat.com
Opportunities and Challenges
Positioning & Strategy
◦ Border Economic Special ZOne/Border Industry Zone
◦ Logistics
◦ Transportation
◦ Tourism
◦ Education/Health Care regional Hub
Risk Management
Study the regional-risk in each basis: Cross-border mobility of people ,Transnational circulation of goods&serives ,and Transnational interactions and their results formed each transitions
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Thailand : Opportunity
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AEC via NORTH – SOUTH ECONOMIC
• Border Trade & Contract Farming , Investment• Regional Logistics Hub• Neighbor Investment (Industrial, Agriculture, Gas Resources)• Border Industrial• Immigrant Labor• Agriculture Investment• Regional Financial & Stock Market• Tourism Hub• Heath/Education/Service Center• Port Link/Land Bridge/ Airport Link/ Rail Link
42 www.tanitsorat.com
China's richest man, Jack Ma, says it will take '30 critical years' to get fully internet-integrated includingreplacing huge companies with small business. (Photo courtesy of Government House)
Jack Ma and Prime minister of Thailand on Oct.9.2019
• Mr Ma reaffirmed the need for an "e-road", akin to the Silk Road, to help small businesses flourish.
Jack Ma said
• "In the future, no matter how small a country is [or] your business is, if you have a big heart, open mind, and embrace tech knowledge and inclusive globalisation, you can be powerful too."
• Jack Ma in ACD meeting in Bangkok, Thailand(Oct.9.2016)
Thailand, a Natural Partner for China
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“中泰一家亲” is a term no other country shares
No political hotspots
Very stable country
The only “no headache” access to the Indian ocean
Thailand should also be viewed as a hub for CLMVT investments
Thailand’s EEC – Long Term Drivers
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The Eastern Economic Corridor (EEC) is Thailand’s next growth engine
Policy Stability
Need to Decentralize
Infrastructure and Industry
Upgrade
EEC – Need to Decentralize
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Thailand’s economy, and society as a whole, is very concentrated around Greater Bangkok
The EEC project aims to modernize and upgrade its current industrial clusters, whilst moving the
activity to the southeast of Bangkok to enhance the former Eastern Seaboard industrial clusters
Investment in target industries would entitled additional incentives in addition to core incentives,
including exemption of corporate income tax for 15 years (highest thus far)
Eastern Economic Corridor (EEC)
EEC helps create a new industrial hub to serve ASEAN and especially CLMVT
EEC – Policy Stability
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EEC is a flagship under the Thailand 4.0 program
This policy is also supported by large private corporates, thereby allowing for policy stability
across governments
1) Sector-Based Incentives
High Incentive Sectors
Advanced Manufacturing
High Value Added Businesses & Services
Maximum 8-year Corporate Income Tax Exemption
Low Incentive Sectors
Basic Industries Supporting Industries
10-year Corporate Income Tax Exemption
Biotechnology
Advanced Material
Technology
Nanotechnology Digital Technology
5) Special Incentives
• Eastern Economic Corridor (EEC)
• Special Economic Zones (SEZs)
• Others
Additional incentives depending on location of investment
4) Area-Based Incentives3) Merit-Based Incentives
Additional incentives granted activities that enhance competitiveness
• Research & Development
• Advanced Technology Training
• Others
Additional incentives for specific purposes
• SME Supporting Incentives
• Measure to Promote Productivity
• Others
2) Technology-Based Incentives
EEC incentives granted now will survive any change in government
EEC – Infrastructure and Industry Upgrade
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Integrated Infrastructure – enhance regional and global connectivity
Industrial Upgrade – attract high-tech investment with superior incentives
Airport
Hi-Speed Rail
Deep-Sea Port
Target Industries
New Cities
5 High Priority Projects
INFRASTRUCTURE
INDUSTRIAL UPGRADE
Key Activities and Locations
High level of overlap between EEC target industries and China’s natural strengths
Conclusion
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谢谢!
=
• "Data will be the new resource. So the next 30 years are critical for all nations in the ACD. To Asia, it is very critical," he said.
• He recalled that few people believed Chinese e-commerce could grow rapidly due to poor infrastructure for online trading.
Q&AThank you
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