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24 Aug 2009

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China Expands Investments Abroad: Windfall to ASEAN and Thailand (Business Brief No.2606)

คะแนนเฉลี่ย
The deepest global economic recession since World War II has affected foreign direct investment (FDI) into China in 2009, contracting for the tenth consecutive month in July. Meanwhile, their outbound investments have been increasing since 2003, and it is expected that China's FDI will grow this year because their business sector has been affected by this crisis somewhat less than Western countries; their capital remains sufficient to invest abroad.
In addition, Chinese economic growth over the remainder of 2009 should be boosted by government stimuli that will help accelerate their economy and exports in line with the global economic recovery. As a result, China's FDI has increased. To promote FDI, the Chinese government eased regulations and facilitates toward investment abroad starting in March 2009.
Aside from those supporting factors that will likely accelerate the value of China's FDI in ASEAN and Thailand, other positive signs include the signing of the ASEAN-China FTA pact on August 15, 2009, which is expected to become effective in January 2010. This agreement will instill confidence toward investment for investors on both sides. The second round of service liberalization agreements between ASEAN and China are under negotiation (to be concluded this year, perhaps becoming effective in 2010) will cover more service types than the first round of negotiations. It will facilitate Chinese investors who invest in ASEAN and the Thai service sector.
China's FDI in Thailand is improving. (Thailand is one of the top investment destinations within ASEAN with the second highest FDI value after Singapore). Thai business potential includes automobiles/parts, computers and electronics, food industry, tourism-related service business, construction and medical services. In addition, Chinese Investors are interested in investing in many types of Thai businesses, so it is expected that China's FDI in our country in 2H09 will improve over 1H09 (THB 507.5 million, increasing by 182 percent, YoY).

Chinese investors are interested in many types of business as seen during the business matching forum between Thailand and China held at the end of July. During that forum, there were up to nine business partners signing MOUs and likely to start investments this year. Thai businesses that may be the recipients of Chinese investments include rubber products, cassava products, processed food, beverages, automobile parts, electrical appliances, miscellaneous light industry and services, such as hotels, medical centers, senior citizen housing facilities and spas.

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