Thailand: Manufacturers relocating from China, Hong Kong

An increasing number of manufacturers are moving their production bases from China and Hong Kong to Thailand due to the U.S.-China trade war, the Board of Investment (BOI) has said.

BOI Deputy Secretary General Narit Therdsteerasukdi said recently that investment applications last year from Chinese and Hong Kong investors for BOI tax privileges had reached a 10-year high of 164 projects worth almost 60 billion baht ($1.98 billion).

He added that the number of such applications continued to increase during the first half of this year, totaling 111 projects worth more than 31 billion baht.

Most of them are in the auto parts, plastics, machinery and furniture businesses.

He added that the production bases of Taiwanese and South Korean companies in China, which export to the U.S., are also relocating their plants to ASEAN countries, including Thailand.

Last month, the BOI approved Thailand Plus incentives, aimed at attracting foreign businesses to relocate and expedite large-scale investment as well as strengthen workforce development.

These new measures include an enhanced incentive package for projects worth at least 1 billion baht of investment, additional incentives for companies engaged in human resource development, and revised incentives to encourage corporations to set up STEM (Science, Technology, Engineering and Mathematics), or educational or vocational training institutions.

The BOI will also launch a road show to woo investments from China and Hong Kong next year.

According to BOI data, the total value of applications received by the BOI from foreign investors more than doubled to 147.2 billion baht in the first half of 2019, as compared to the corresponding period last year.

In terms of the source of the foreign direct investment applications, out of a total of 468 projects, Japanese companies ranked first with applications for 114 projects worth 42.45 billion baht, followed by China, with 81 projects worth 24.28 billion baht, and Switzerland, with 10 projects worth 11.44 billion baht.

Source: The Japan News