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Thailand is well positioned to cash in on increased investments of Chinese, Indian and cash-rich Singaporean companies into the region, experts say.
Thailand had competitive advantages to capture rising investments from China due to its cheap labour costs, said Jianqiang Nie from the Institute of International Law at Wuhan University.
''Several Chinese companies are looking for investment locations overseas as they face a labour shortage at home, and the new labour law has pushed up their production costs,'' Mr Nie said at a Bangkok conference on expansion of Asian foreign direct investment (FDI).
''Based on the skills of Thai labour, I think Thailand still has a competitive advantage compared to other Asian countries like Vietnam,'' he said.
In addition, Thailand is attractive in the eyes of Chinese investors due to its legal framework, cultural links and social stability.
''The similarities of Thai and Chinese culture are the preference, as well as mentality of the people here,'' added Mr Nie.
According to Chinese government statistics, outbound investments from the mainland jumped to $21 billion in 2006 from US$2.7 billion in 2003 as the government has been encouraging Chinese firms to invest overseas in addition to welcoming FDI.
''Those investors are not only the state-owned firms but also private enterprises. The key areas for their investments are mining, the energy sector, and financial services,'' Mr Nie said.
Transnational Indian companies have also stepped up their cross-border investments, according to Andrew Delios from the Business School at the National University of Singapore. In 2006, 127 different companies representing 33 industries made 224 transactions.
Marinus Sikkel, head of the Trade and Investment division at the UN Escap office in Bangkok, said Thailand had become a strategic country for many firms in the region. However, Thailand should cut down regulations, streamline procedures, create a single tax system and make sure the financial system is working well.
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