Electronics sector lures Chinese money

Electronics sector lures Chinese money

Japanese, Koreans to scale back investment

The Chinese are interested in investing in Thailand's electrical and electronic goods sector, as they can use the country as a base for breaking into other Asean markets, says the Federation of Thai Industries (FTI).

Visnu Limwibul, chairman of the FTI's electrical, electronics, telecommunications and allied industries club, said Japan, one of Thailand's main economic partners, had already invested heavily in the country and would not invest much more this year.

At the same time, South Korea seems more interested in investing in Vietnam, he said.

"The Chinese will be the main players investing in Thailand's electrical and electronic goods sector this year, seeking to capitalise on cheaper labour as well as tariff benefits," Mr Visnu said.

He said Chinese investors needed the tariff benefits from Thailand as a member of the recently launched Asean Economic Community to penetrate other Asean markets that boasted strong growth potential.

China has also faced rising wages for some time now, with a growing number of Japanese makers of electrical and electronic goods moving their production bases to Thailand from China in recent years, Mr Visnu said.

He said foreign investors still saw Thailand as a good place to do business due to the many tax incentives offered by the Board of Investment (BoI).

"For the cluster policy, it will depend mainly on whether the government can persuade the major producers to invest in the cluster, which will lure smaller companies to invest here," Mr Visnu said.

He said Thai investors would keep investing, as they believed the market for electrical and electronic goods would grow this year.

Makers of electronic goods will have to change their production to rely more on automation, Mr Visnu said.

"Electronic products are becoming smaller and smaller," he said.

"That means the industry will soon rely almost entirely on automation."

Mr Visnu said with the constant change of technology, investors would have to adapt or else be unable to meet market demand.

BoI deputy secretary-general Ajarin Pattanapanchai said many major electrical and electronic goods producers were interested in investing and expanding their production in Thailand this year.

She attributes the trend of investing in the sector to the government's policy to promote industrial clusters and also supporting investment in high-tech production and innovation.

The BoI last year approved 319 investment projects in the electronic and electrical goods sector for a combined 116 billion baht in investment, Ms Ajarin said.

She said many of the projects conformed with the government's policy of promoting a digital economy.

These included 173 projects in software development worth a combined 1.37 billion baht, eight projects for telecommunications equipment worth 17 billion and two projects in cloud computing valued at 520 million.

Ms Ajarin said the BoI encouraged investors to focus on designing and developing products to add more value.

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