The Board of Investment (BoI) in Thailand has approved 20 new investment projects worth 30 billion baht from Taiwan-based electronics companies.

These companies are looking to use Thailand as their new export base to avoid the impact of geopolitical conflicts, such as the China-Taiwan tensions. The move is expected to fuel growth in the electronics industry and make Thailand a major printed circuit board (PCB) manufacturing base in ASEAN.

The BoI plans to invite more electronics firms, particularly from Taiwan, to invest in Thailand as part of its five-year investment promotion strategy. Taiwan is a target country for investment to boost the high-tech industry hub in the Eastern Economic Corridor (EEC) in Thailand.

Taiwan has established itself as a prominent player in the electronics industry, contributing to over 65% of the global semiconductor market and 35% of the PCB market.

Thailand has become an attractive destination for Taiwanese manufacturers due to its infrastructure, investment policies, space for expansion, and skilled labor. The Board of Investment (BOI) has also played a role in boosting Thailand’s appeal by inviting members of the PCB manufacturing association for a field trip, resulting in increased PCB investment projects.

Taiwanese manufacturers also see Thailand’s potential in becoming a manufacturer of upstream electronic components. Thailand is already the largest PCB manufacturing hub in ASEAN, ahead of competitors like Vietnam and Malaysia.

Source : Thailand Business News

The Tourism Authority of Thailand (TAT) is taking a sustainable approach to tourism by promoting low-carbon travel routes along Bangkok’s historic Phadung Krung Kasem Canal. The goal is to encourage tourists to engage in environmentally responsible tourism behaviors that minimize their carbon footprints.

TAT, in collaboration with the Bangkok Metropolitan Administration (BMA), organized a familiarisation trip on August 19, to showcase an enjoyable and eco-conscious way for tourists to explore local attractions and participate in activities along the Phadung Krung Kasem Canal. The event was attended by Japanese media, bloggers, and representatives from Destination Management Companies (DMCs).

The journey starts with an electric boat cruise from Hua Lamphong Station Pier to the historic Wat Thewarat Kunchon Worawihan temple. This temple, which dates back to the Ayutthaya period, holds significance as a royal temple since King Rama IV’s reign and is well-known for its mural paintings and famous Buddha images.

Passengers continued their journey to Nakhon Sawan Pier, where they visited the century-old Nang Loeng Market, one of Thailand’s earliest inland markets. In addition to enjoying street cuisine, visitors to Ban Narasin participated in a Khon costume embroidery session. This workshop focuses on the ancient Khon theatrical company during the reign of King Rama VI.

The journey then transformed into a walking tour and caf? exploration along Nang Loeng and Nakhon Sawan Road. Notable stops included Mamueng Caf?, Bangkok 1899 House, Na Caf?, Nang Loeng Art, and Buddha & Pals Caf? & Jazz. The journey concluded at the Thai Railway Museum, which caters to railroad enthusiasts and is located near MRT Hua Lumphong.

For those interested in taking this eco-friendly journey along the canal, the BMA electric boat operates daily and is free of charge. It runs every 20 minutes from 06:00-09:00 and 16:00-19:00 on weekdays. Meanwhile, the boat runs every hour from 08:00-19:00 on weekends and holidays.

Source : NATIONAL NEWS BUREAU OF THAILAND

Poonpong Nainapakorn, director of the Commerce Ministry’s Trade Policy and Strategy Office (TPSO), sees plenty of potential for Thai exporters in China's fast-growing e-Commerce market, based on a recent study by the TPSO on the growth of Cross-border e-Commerce (CBEC).

The growth is due to the increasing number of internet users, which rose to 1.07 billion people in 2022, an increase of 35.49 million over 2021. The Covid-19 pandemic also encouraged many more consumers to shop online.

Additionally, the Chinese government has implemented measures and policies to support CBEC including the establishment of 165 pilot cross-border e-commerce integrated development zones in 33 cities, including Hangzhou, Beijing, Shanghai, Kunming, and Chengdu. These zones connect by land and sea, both domestically and internationally, promoting exports of Chinese SME products to online platforms abroad and encouraging the import of foreign products for sale on Chinese online platforms.

Businesses in these zones benefit from tax incentives and simplified customs procedures compared to traditional cross-border trade. They also enjoy simplified customs processes and lower operational costs. However, regulatory challenges remain, such as increased customs procedures for storing goods in the zones and limitations on storage and operational costs.

CBEC imports into China are divided into two categories:

1. Bonded warehouse import: Businesses worldwide can import goods into bonded warehouses without going through customs procedures or paying taxes until consumers order the products. This method reduces waiting times for consumers, with deliveries typically taking 3-7 days.
2. Direct mailing: Businesses can directly send products from the source country to consumers in China through logistics systems, payment, and taxation cooperation with the platform. This offers convenience to both consumers and businesses in terms of logistics.

Worth noting, however, is that while the collaboration between e-commerce platforms and logistics companies reduces costs by avoiding bonded warehouse expenses in China, there is a trade-off in terms of time. It may take approximately 1-2 weeks to pass through customs procedures, far longer than the 1-2 days required for importing through bonded warehouses.

Whichever category they choose, Thai businesses have a significant opportunity in the growing Chinese CBEC market, given the high demand for various Thai products such as processed foods, ready-to-eat meals, snacks, health products, fresh fruits, cosmetics, and natural skincare products.

By increasing their presence in CBEC and focusing on products with a Thai identity that have the potential to appeal to Chinese consumers, Thai entrepreneurs can expand their sales and market share in China.

Trading through CBEC offers tax benefits too. If the value is below 5,000 yuan (24,380 baht) per order and the total annual value does not exceed 26,000 yuan per person, businesses can enjoy exemptions from customs duties and pay only 70% of the regular value-added tax and consumption tax.

The TPSO recommends that entrepreneurs conduct thorough market research in China, including legal, geographical, and cultural aspects of their target audience. Choosing the right platform to align with the product's characteristics is essential for effective communication.

Currently, China's Customs Administration reports that the value of imports and exports through CBEC in 2022 reached 2.06 trillion yuan (US$283 billion), with a 7.1% increase. In the first half of 2023, the value of imports and exports through CBEC amounted to a significant 1.1 trillion yuan (U$150 billion), showing a 16% increase.

Source : THE NATION THAILAND

CIMB Thai Bank has adjusted its Thailand GDP forecasts for 2023 to 3% and for 2024 to 3.5% owing to a slowdown in the Chinese economy.

Amonthep Chawla, head of research at CIMB Thai Bank, said the projections have been revised as a deceleration in the Chinese economy is affecting Thailand’s exports.

Instead, he said, growth will possibly be driven by tourism-related services and strong purchasing power among the upper-middle class, alongside anticipated government stimulus in the second quarter of 2024.

Research indicates that Thailand’s economic recovery is uneven, with low purchasing power among low-income households, exacerbated by drought and high household debt. While Thailand’s tourism industry remains robust, most of it is concentrated in major tourist cities.

Thailand’s economic outlook for 2024 depends on the global economy and government policies, which could impact GDP forecasts related to exports, tourism, private and public consumption and investment.

Here are some key points:

The Good

• The US may avoid a soft-landing scenario, and China could implement stimulus policies to drive growth, mitigating issues related to problems of corporate debt and property bubbles.
• Thailand’s exports could rebound quickly, and tourist arrivals could exceed expectations.
• Government stimulus policies aimed at injecting cash into low-income households and stimulating consumption could be implemented by the end of Meanwhile, foreign direct investment (FDI) may rise thanks to political stability and improved investor confidence.

The Bad

• The US economy could slow down due to higher interest rates and inflation, while China could experience a sharper slowdown driven by corporate debt defaults and property market instability.
• Thailand’s exports are projected to grow modestly due to weak global demand, but tourism may continue to remain a growth driver.
• Government stimulus policies might be implemented by the second quarter of 2024 after budget approval, potentially leading to increased consumption and investment. FDI could relocate to Thailand.

The Ugly

• The US could experience slowing economic growth with a technical recession in the first half of 2024, while China might experience a sharper slowdown but still maintain over 4% growth in
• Exports could drop due to weak global demand and supply chain disruptions, while tourism revenue may grow slower than expected.
• Delays in government stimulus policies until the second half of 2024 could worsen consumption among low-income households already affected by a severe drought situation.

The Bank of Thailand could halt the rate hike cycle at 2.25% as a pre-emptive measure against high inflation resulting from the government’s stimulus policies, especially the minimum wage increase. Additionally, the Thai baht may strengthen against the US dollar due to anticipated US rate cuts in 2024 and more tourism revenue in Thailand.

However, several risk factors could potentially hinder Thailand’s economic expansion, namely:

• Decoupling: The complete separation of the US and Chinese economies, driven by trade wars, technological conflicts and supply chain disruptions, could significantly impact Thailand’s exports and the Asean region as a whole.
• De-dollarisation: Reducing reliance on the US dollar in favour of other currencies like the Chinese renminbi, may introduce more exchange rate volatility.
• Disinflation: China’s deflationary pressures could lead to lower prices of goods and divergent monetary policies in the Asean region compared to the US, which still faces inflationary pressures and may hike interest rates.
• Digitization: Thailand’s move into the digital era may pose challenges for small and medium-sized enterprises (SMEs) in adapting to technologies like blockchain. This could worsen inequalities and require government intervention
• Democracy Movement: Political movements advocating for a new Constitution emphasising greater democracy may introduce political tensions or conflicts that impact investor confidence.

Source : THE NATION THAILAND

Thailand’s new Prime Minister, Srettha Thavisin, is looking to boost tourism revenue by easing visa rules for Chinese and Indian travelers and allowing longer stays for visitors from all countries.

The current visa application process for Chinese tourists is costly and cumbersome, while Indian travelers have to pay for a visa on arrival. The government aims to increase revenue from foreign tourists to 3.3 trillion baht next year.

However, the return of Chinese visitors has been slower than expected due to stringent e-visa requirements and China’s economic woes. The tourism sector is calling for additional measures such as adding flights and lengthening visas to attract more tourists.

In response to the call for additional measures to boost tourism, the Thai government is considering various strategies. One potential solution is to streamline the visa application process for Chinese tourists, making it more affordable and convenient. By implementing this change, Thailand aims to attract a larger number of Chinese visitors who are currently deterred by the cumbersome procedures and costs associated with obtaining a visa.

Nomura Holdings Inc. predicts that foreign-tourist arrivals will reach approximately 30 million in 2023, a significant increase from 11.2 million in the previous year. As of Tuesday, the Ministry of Tourism and Sports has reported a total of 17.5 million foreign-tourist arrivals.

Despite China being the largest source of travelers last month with nearly 420,000 visitors, the return of Chinese tourists to Thailand has been slower than expected. In 2019, before the coronavirus pandemic, about 28% of the record 40 million foreign arrivals to Thailand were from China, contributing to approximately 1.9 trillion baht in revenue.

Furthermore, the government is examining the option of extending visa durations for tourists from Belarus, Kazakhstan, and Russia. These countries have shown a growing interest in visiting Thailand, and by allowing longer stays, the country hopes to enhance their tourist experience and encourage them to explore different regions. In addition, the proposal to waive visa application fees is being considered, as this would remove an additional financial burden for international visitors, making Thailand a more attractive destination.

The Phuket Tourism Association has also suggested increasing the number of flights to cater to the rising demand for travel to Thailand. A boost in flights would offer travelers greater flexibility in planning their trips and make it easier to access various parts of the country. By expanding flight routes and increasing capacity, Thailand can enhance its connectivity with different regions and accommodate the growing influx of tourists.

By simplifying visa rules, extending stay limits, and exploring options to enhance accessibility, the country aims to create a more welcoming environment for tourists from around the world. These efforts are part of a comprehensive strategy to achieve the target of 3.3 trillion baht in revenue from foreign tourists next year, contributing to the overall growth and development of Thailand’s economy.

Source : Thailand Business News

The 9th annual EU-ASEAN Business Sentiment Survey (BSS) revealed a positive outlook for European businesses in Southeast Asia (SEA), underscoring growing importance of ASEAN-European Union (EU) relations.

The survey is a vital barometer to gauge European business outlook on key issues including macroeconomic conditions, policy and regulatory environment in Southeast Asia, and the development of bilateral and plurilateral free trade agreements in the region.

The findings from this year’s survey, which had nearly 600 responses from the European private sector, indicate an overall optimistic outlook for ASEAN.

Some 80 per cent of respondents believe that ASEAN markets will become more important in terms of worldwide revenues over the next two years, highlighting the region’s growing significance in the global economy, a 15 per cent jump from 2022.

Eighty-four per cent of respondents expressed their intention to boost levels of trade and investment in ASEAN, a seven per cent increase from 2022. Meanwhile, 65 per cent of respondents anticipate an increase in profits in ASEAN for 2023, showing a continued positive trend in the region’s business landscape. This percentage remains robust despite a slight decrease from last year’s figure of 69 per cent.

The survey also revealed that around two thirds of respondents view ASEAN as the region for best economic opportunities over the next five years, reflecting a consistent perspective compared to the previous year.

While it has strong infrastructure, Brunei scored 51 per cent in the recently released Pulse Internet Resilience Index (IRI) of the Internet Society, ranking third of 11 countries along with Malaysia and Thailand in the Southeast Asian region. It scored behind Singapore with 72 per cent, Vietnam with 52 per cent and Malaysia and Thailand with 51 per cent.

The Sultanate scored well in mobile network (with 72 per cent) and connectivity (with 71 per cent). The regional average is 49 per cent, higher than Asia with 46 per cent, Americas and Oceania with 45 per cent each, and Africa with 35 per cent, but below Europe’s 60 per cent.

Described as a first-of-its-kind tool, the IRI offers insights into the Internet resilience of 170 countries. It is based on four key metrics: infrastructure, performance, security and market readiness.

Internet Society, a non-profit Internet watchdog, tracks resilience across key metrics including infrastructure, performance, security, and market readiness through its Pulse Platform.

“Internet resilience means maintaining an acceptable level of service and connection despite faults and challenges to normal operation. This focus has been increasing among policymakers and activists worldwide as Internet infrastructure becomes essential for a nation’s economy and society,” the Internet Society said in a statement recently.

For performance, the Sultanate scored 65 per cent and 46 per cent for security. Security measures the ability of the network to resist intentional or unintentional disruptions through the adoption of security technologies and best practices, while market readiness is the ability of the market to self-regulate and provide affordable prices to end-users by maintaining a diverse and competitive market.

The infrastructure score is based on the existence and availability of physical infrastructure that provides Internet connectivity, while performance is the ability of the network to provide end-users with seamless and reliable access to Internet services.

Source: Borneo Bulletin

Read the full article here

In the first quarter (Q1) of 2023, the Sultanate’s gross domestic product (GDP) at constant prices recorded a year-on-year increase of 0.8 per cent, according to a Department of Economic Planning and Statistics (JPES) report.

The year-on-year increase was attributed to an increase in the non-oil and gas sector by 6.2 per cent. Meanwhile, the oil and gas sector fell by five per cent.

The increase in the sector was driven by the rise in subsectors such as air transport by 285.1 per cent, followed by finance (71.7) and other transport services (33.1).

The increase in the finance subsector was in line with an increase in the income of banking activities. Meanwhile, the increase in the air transport and the other transport services was driven by an increase in passenger air arrivals and departures, corresponding to the full lifting of travel measures.

The manufacture of petroleum and chemical products subsector under non-oil and gas sector experienced a decline due a decrease in the production of petrochemicals as a result of maintenance activities.

Source: Borneo Bulletin

Read the full article here