TJ130: Japanese investment remains strong in Thailand, as it strives to become Asia’s innovation hub
Hiroki Mitsumata, President of JETRO in Bangkok and Shingo Sato, President of the
Japanese Chamber of Commerce in Bangkok
This year marks the 130th anniversary of diplomatic relations between Thailand and Japan: A unique partnership that continues to grow stronger and mutually beneficial for both countries.
“Thailand and Japan have a long history of partnership and they are strongly linked with each other in sectors such as the large-scale production of automobiles and electrical appliances, as well as the petrochemical industry,” says Ekarat Thongtawach, chairman of the Federation of Thai Industries Petrochemical Industry Club.
Thailand’s economy grew by 3.2 percent in 2016, an increase over the previous year. Some signs of slowdown appeared toward the last quarter of the year — coinciding with the October death of the revered King Bhumibol Adulyadej, who had reigned for over seven decades. His passing plunged the country into a period of grief and an official mourning period that is ongoing.
This year, in early March, Emperor Akihito and Empress Michiko paid a historic two-day visit to Thailand and met with Thailand’s new king. Reflecting exceptionally close economic links between their countries, warm relations between the Japanese and Thai royal families have been maintained over the decades.
In fact, the Japanese Chamber of Commerce in Bangkok (JCC) was founded in 1954 with only 30 member companies and now represents over 1,700 members. It is one of the largest Japanese chambers of commerce in the world. Since its establishment, the JCC has promoted not only mutual trade, investment and economic development between the two countries, but also cultural and educational exchange.
“Networking and business matching among the member companies is one of our priority agendas,” says Shingo Sato, president of the Japanese Chamber of Commerce in Bangkok. “We will continue to provide member companies with opportunities for enhancing relationships with each other through various events”
Over the years, Thailand has become a key platform for Japanese businesses outside Japan, but investment focus has shifted with time. Since 2012, the number of JCC Japanese nonmanufacturing companies in the country has surpassed that of manufacturing. “We will see more and more Japanese small and medium enterprises in the IT, environmental and logistic sectors doing business here,” says Sato. “There are also more regional banks from Japan setting up offices in Bangkok in order to support their clients.”
“Looking ahead, it is crucial to support local economies across the country,” affirms Hiroki Mitsumata, president of JETRO in Bangkok. “There is still a high concentration of investment in the Bangkok area.”
“The Thai economy is still mainly based on manufacturing and exporting,” he continues. “The country needs to shift more toward higher value- added sectors. I am confident that Thailand can manage the shift to becoming the innovation hub for Southeast Asia.”
The government has already outlined an ambitious investment program that includes plans for new roads and train lines, free trade zones and deep-sea ports to connect Thailand with the 3.3 billion consumers who live in Southeast Asia, China and the Indian subcontinent. In addition, there are plans to build Bangkok’s third international airport — able to handle the projected increase of up to 30 million passengers per year in total, while also serving as the headquarters of a nascent aerospace industry to help drive a high-tech industrial revolution.
In the past 10 years alone, Thailand has welcomed more than 8.5 million international business event travelers. Of these, 4.9 percent were from Japan. The Thailand Convention and Exhibition Bureau unveiled a strategic marketing plan to attract Japanese business event travelers at the “Thailand CONNECT: Japan Business Events Road Show 2017,” recently held in Tokyo. It underlines a partnership that has lasted 130 years and shows.