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Japan still keen on Thailand |
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() Japanese investors still see Thailand as a strong destination for investment despite the political tension, according to Akao Nobutoshi, the secretary-general of the Asean-Japan Centre. He said there were a few questions on the kingdom's political situation for Japanese manufacturers and even newcomers. ''Their major concerns are focused on the local market, investment facilities and privileges for investment as well as investment promotion measures that Thai state agencies will provide to them,'' he added. The foreign direct investment policy is also an important factor in the decision-making of the investors, despite frequent changes in Thai government. Automobiles, electronics, electrical and steel are the new wave of industries where investors are looking for opportunities to relocate and expand their production in Thailand. They aim to follow the footsteps of big Japanese industrial players that have already established production bases in Southeast Asia. Thailand is the second country in Asean to reach a free trade agreement (FTA) with the Japanese government. The pact was signed in November 2007, following Malaysia which made an agreement in July 2006. Japanese direct investment in Thailand rose to 29 billion baht in first half of this year with 164 new factories. The current pact covers hundreds of business areas including service, industry, trade and tourism. Nevertheless, the Japanese government still wants to see more businesses covered in its pact with Thailand, particularly in the labour force and specialties including hospitality, healthcare, spa therapist, chef and construction worker as the country ages, resulting in a shortage of human resources. Other Asian emerging countries such as China and Vietnam are on the verge of less competitiveness because of their large aging population compare to Thailand, said Mr Nobutoshi. Thailand is also considered a better choice than its local rivals for business partnerships. For example, China is viewed as higher risk due to its counterfeit problems. China has evidently developed industry rapidly through a copy and development strategy, he said. Emerging Vietnam is presently facing a high inflation rate of over 25%, which has adversely affected production costs, while Thailand has a better control policy, he added. The high technology industries still view Thailand as the best destination for setting up main operations, while the mass production of parts which require less skillful workforces would be outsourced to Vietnam and China. Operation costs in Shanghai, Beijing and Ho Chi Minh City are not currently lower than in Thailand. Yamada Nobuaki, executive director of Ota Industrial Promotion Organization, said due to the country's strong respect for the monarchy, political conflicts can be solved easier than in other countries. He said small businesses in Ota are considering relocating plants either to other cities in Japan or to Thailand as they were struggling with the hefty cost of living and land prices.
Chokedee Kaewsang, director of the Board of Investment (BoI)
in Tokyo, said Japanese investors would most likely raise
questions about Thailand's possibility of labour strike and
their trend of declining consumer purchasing power. |
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Bangkok Post, 18.07.2008 |
