More investment from China likely : Thailand

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AS THAILAND and China started the second round of talks on a joint railway project yesterday, the Chinese ambassador to Thailand reiterated his optimism that the project would spur more investment and allow Thailand to be the centre of China’s much-touted Maritime Silk Road.

 

In a speech to a Bangkok Bank event, “China and the AEC under the New Silk Road”, Ning Fukui shared his belief that if Thailand should want to develop industrial estates along the route, Chinese companies would be ready to join in.

 

“Thailand is the centre of Asean, a natural linkage of the regional trade,” he told the audience. “Thailand’s infrastructure is ready to some extent, but more should be done, particularly in the aspect of railroads. This will be a win-win deal” for Thailand and China.

 

His comment followed the Thai junta’s agreement with China for the joint development of a high-speed train to link Bangkok and Nong Khai. The first round of discussions on technical issues was completed in Thailand two weeks ago.

 

While the ruling Thai generals are upbeat that the project could be kicked off late this year, the ambassador cautioned that it depended on the discussion of other non-technical aspects, such as funding and assessments of environmental and social impacts.

 

“The rail project is a vital part of the 21st-century Silk Road. It could be a development model and allow Thailand to be the centre of the region,” Ning said.

 

In his speech, the ambassador did not hide China’s ambition in harnessing neighbours in all aspects — from trade, investment to cultural and socio-environmental areas — under the Silk Road project.

 

With the vision to build a road/rail link stretching from the west of China to the South China Sea and the maritime link, the Silk Road of the 21st century demands huge investment in infrastructure — roads, railways and seaports. Thailand is at the connecting point of the land and maritime belts.

 

To fulfil this dream, China is ready to invest financial and non-financial resources, particularly in Asean, with whom China shares a 4,000km border.

 

Ning was referring to a study showing that for every US$1,000 (Bt32,600) invested in infrastructure, 18,000 jobs would be created.

 

China has also signed up facilities with Malaysia and Thailand to enhance direct trade. Public support would then be the integral part. In this regard, it plans to award 15,000 scholarships in Asean countries for studies in different areas.

 

“China wants to strengthen cooperation in every aspect with Asean,” he said, citing possible cooperation in such areas as maritime transport, aviation, fibre optics, education and technology.

Academics have said domestic imbalances are driving China down different economic paths.

 

Excessive investment in the past that allowed gross domestic product to grow by more than 10 per cent per annum resulted in economic and environmental problems. As domestic demand drops, manufacturers also need to find new markets for their products.

 

The Silk Road will open up such markets, to make “China’s new normal economy” goal a reality.

At the same event, Blaise Godet, a former Swiss ambassador to China, noted that the Silk Road could bring China closer to its neighbours. However, he is concerned how the investment involved would be shared, as numerous construction projects would be created.

 

“If only Chinese companies are involved in the project, it’ll be counterproductive. It won’t bring these countries closer to China,” he warned.

 

Godet also noted that European countries were closely monitoring the progress of the grand scheme. They welcome the shorter transport time that new railroads connecting Asia and Europe will offer, but contentious issues include poor cohesion between China and Europe in foreign policies.

 

“Success also depends a lot on Russia and its influence on Central Asia,” he said, highlighting Russia’s blockade of roads to the area in retaliation to European Union sanctions.

 

He also said that if bribery along the route becomes a problem, the Silk Road might be avoided by truck drivers.

 

 

 

Source : The Nation | February 12, 2015

Thomas D’Innocenzi

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About thomasdinnocenzi

Thomas D’Innocenzi is a highly accomplished, results-focused international consultant with extensive experience in global sourcing and business development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global marketing and sourcing operations. He has extensive experience in international business development to accommodate rapid growth. Skilled in building top-performing teams, bench-marking performance, and developing organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. Tom founded Nova Advisors with the mission of providing expert Global Business Development consulting services for companies seeking to expand their market share as an independent consultant. Tom has a network of experts and advisors throughout the Asia-Pacific region and North America. His expertise includes business development, global sourcing, manufacturing, commodities, logistics, QA/QC, FDA, regulatory compliance, sustainability, and supply chain optimization. Tom is experienced in the medical device, apparel, consumer goods and technology services verticals helping companies advance their global sourcing capabilities and develop new markets through a local and sustained approach. Located in SE Asia and the United States, Tom expands market reach to drive sales. His global sourcing strategy includes directly negotiating with commodity suppliers, supply chain networks and distributors for optimal terms based on his expertise and first-hand knowledge of the players. Contact Tom to use his consulting service to increase your global market and make global sourcing profitable for you in the Asia Pacific Region and the United States. http://www.NovaAdvisors.com thomas@NovaAdvisors.com USA Direct: +1.904.479.3600 SINGAPORE: +65.6818.6396 THAILAND: +662.207.9269
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