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

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13 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. 13

14 Why Go Global ( 走出去 )? For economic and financial stability. For energy security Through the Silk Road Strategy 14

15 The investment objective of the Chinese economic and political power. ท มา : 15

16 Economic power, China Based on the Strait of Malacca has high risk From Russia From Canada Kazakhstan and Turkmenistan. Iran And Saudi Arabia Pass Myanmar Channel Japan Sudan and Angola From Venezuela and Australia Strait of Malacca 16

17 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 countries 2. 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

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22 China looks ASEAN as important and Challenges Economic Strength -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. ท มา : 22

23 Relations Between China-ASEAN 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 Investment At the end of 2014, Chinese investment (cumulative) 68% Asia (ASEAN 5.4% Thailand 0.3%). o Financing BSA China and ASEAN countries Using Chinese renminbi trade with all countries. Latin America 6% Trade b/w China-other regions Europe 18% North America 16% Oceania 1% Asia 54% Africa 5% 23

24 The attempt to link the Silk Road to The ASEAN. In addition, there is a marine railway. The railway in Laos -Boten(Laos)- Vientiane (China). Indonesia (China) 16-Oct-58. Railway in Thailand China China - Bangkok - Nong Khai (China) Bangkok - Chiang Mai (Japanese. Japan China

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26 A Case Study of Thailand 1

27 Cooperation Thailand - China today Through various partnerships as part of the "Silk Road". 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. ท มา : 27

28 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. ท มา :

29 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.

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33 China is interested to Kla Isthmus 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. ท มา : 33

34 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.

35 China looks at Thai economy: Thailand is more important. 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. 35

36 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. 36

37 CLMV competitiveness

38 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, Source: Bank of Thailand 38

39 Northern Thailand Economy on ASEAN context Thailand Stand Point Trade Prefer intra-regional trade More Good flow across country using cooperations and agreements provided Services Increase competition, services plays more an economic driver Tourism and health care services FDI Competitive ability Loss make company moves out Invest outbound Labor Relaxing restriction for neighboring country Increase skill labor : language and International standard 39 Capital Movement More freely flow of capital, currency more votality alwww.tanitsorat.com Entrepreneurs need to accelerate the adjustment in management costs and exchange rate risks.

40 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) 40

41 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 41

42 Thailand : Opportunity 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/ 42 Rail Link 42

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47 China's richest man, Jack Ma, says it will take '30 critical years' to get fully internet-integrated including replacing huge companies with small business. (Photo courtesy of Government House)

48 Jack Ma and Prime minister of Thailand on Oct Mr Ma reaffirmed the need for an "e-road", akin to the Silk Road, to help small businesses flourish.

49 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 )

50 Thailand, a Natural Partner for China 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 50

51 Thailand s EEC Long Term Drivers Infrastructure and Industry Upgrade Need to Decentralize Policy Stability The Eastern Economic Corridor (EEC) is Thailand s next growth engine 51

52 EEC Need to Decentralize Thailand s economy, and society as a whole, is very concentrated around Greater Bangkok Eastern Economic Corridor (EEC) 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) EEC helps create a new industrial hub to serve ASEAN and especially CLMVT 52

53 EEC Policy Stability 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 2) Technology-Based Incentives Maximum 8-year Corporate Income Tax Exemption 10-year Corporate Income Tax Exemption High Incentive Sectors Advanced Manufacturing High Value Added Businesses & Services Low Incentive Sectors Basic Industries Supporting Industries Biotechnology Advanced Material Technology Nanotechnology Digital Technology 3) Merit-Based Incentives Additional incentives granted activities that enhance competitiveness Research & Development Advanced Technology Training Others 4) Area-Based Incentives Additional incentives depending on location of investment Eastern Economic Corridor (EEC) Special Economic Zones (SEZs) Others 5) Special Incentives Additional incentives for specific purposes SME Supporting Incentives Measure to Promote Productivity Others EEC incentives granted now will survive any change in government 53

54 EEC Infrastructure and Industry Upgrade Integrated Infrastructure enhance regional and global connectivity Industrial Upgrade attract high-tech investment with superior incentives 5 High Priority Projects Key Activities and Locations INFRASTRUCTURE Airport Deep-Sea Port Hi-Speed Rail New Cities INDUSTRIAL UPGRADE Target Industries High level of overlap between EEC target industries and China s natural strengths 54

55 Conclusion = 谢谢! 55

56 "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.

57 Q&A Thank you