Chinese enterprises are boosting their investments in Thailand in a big way, with the first of three joint ventures with Thai partners being for a sprawling wholesale trading centre worth 6.2 billion yuan (Bt28.8 billion) near Bangkok.
The project will be officially launched today.
This project will be followed by a Bt3-billion wholesale trading centre in the northern province of Chiang Mai and a Bt5-billion auto-tyre manufacturing project in the eastern province of Rayong.
Prime Minister Abhisit Vejjajiva will preside over today’s ceremony to unveil the Thai-China International City project, in which a 700,000-square-metre trading centre will be built on Bang Na-Trat Highway near Bangkok. The centre will serve as a major re-export centre for Chinese-made products in the Asean market of 580 million consumers.
Phairush Burapachaisri, secretary-general of the Thai Chamber of Commerce and the Thailand-China Business Council, said China National Tobacco Corp would be the key financier of the complex.
Following a strong protest in the United Arab Emirates, where a similar project was planned entirely for Chinese products, the investor is now allocating one-third of the space for Thai products, Phairush said, adding, “Thailand has no capacity to do this itself. With Chinese goods, this will boost Thailand’s logistics capability.”
Thai Chamber of Commerce chairman Dusit Nontanakorn thinks differently, however. He questioned why the government was allowing Chinese investment in the complex, as this could be to the disadvantage of many local small and medium-sized operators, who would be left out.
“Thai operators lack government support. They can do this, if the policy is clear. China just wants to spread its money anywhere,” he said.
Meanwhile, Thai Hua Rubber will set up a 15:85 joint venture with Hangzhou Zhongce Rubber, China’s leading tyre-maker, to build a Bt5-billion export-oriented plant in Rayong.
Thai Hua chief executive officer Luckchai Kittipol said the factory, the first overseas for the Chinese company, is expected to commence production next year.
Regarding the Chiang Mai project, Watchara Tantranont, chairman of V Group, said a memorandum of understanding had been signed with Yiwu Market Management of China to develop a wholesale market in the northern province.
Watchara’s family has run the Tantraphant department store in Chiang Mai for decades, while Yiwu Market Management is the operator of the Yiwu wholesale market in Zhejiang, in the south of China.
Watchara said the joint venture would have 100,000 square metres of space for wholesale trading. It will be located on 40 rai of land on the site of the Business Park project, adjacent to the Carrefour hypermarket on the Chiang Mai-Lampang Superhighway.
Yiwu market is the world’s largest for small and medium-sized traders, with more than 4 million square metres of trade space and more than 4,200 varieties of goods. The market recorded 55 billion yuan in sales last year.
Watchara said Yiwu Market Management would bring the management model of the Yiwu market to the one to be developed in Chiang Mai, at which there would be about 2,000 shops.
Construction will start in May and the facility will be opened in December this year.
Watchara said Chinese firms would be involved in construction of the project, with Chinese financial institutions providing loans.
“I believe the project will turn Chiang Mai into a centre of goods from the Yiwu market and also a hub of investment from foreign investors. In addition, the project will help spur land prices in Chiang Mai,” he said.