Thai Chinese business boss reveals that two Chinese firms have ฿10 billion earmarked and have already purchased land in Chachoengsao and Chonburi to build smart cities as investment proposals from Chinese firms, in respect of the Eastern Economic Corridor project in the region, go through the roof.
A key Thai Chinese business leader has revealed that two Chinese firms have purchased land and have ฿10 billion earmarked to build two smart cities in Chachoengsao and Chonburi which he predicts could become home to new Chinese investors in the government’s flagship Eastern Economic Corridor project. It comes as, on Wednesday, the Thai Prime Minister, even speaking in Chinese, oversaw a ฿50.6 billion contract for the first phase of a high-speed rail link between Thailand and communist China which would run from Bangkok to Thailand’s northeastern region and on to China through Laos.
The Thai Prime Minister, Prayut Chan ocha, was present on Wednesday for the signing of the first contract in a groundbreaking plan to link Thailand with China by high-speed rail under the communist country’s ambitious Belt and Roads programme.
At the ceremony, the PM said that the contract, which covers the purchase of key elements for the rail link in the first phase of the project from Bangkok to Nakhon Ratchasima, would help to bolster ties between the kingdom and its northern neighbour.
The go-ahead for the project follows years of toing and froing as Thailand weighed up Japanese led proposals against those put forward by China.
Questions still remain over the financial viability of the project.
Thai PM urges unity as he speaks in Chinese at railway contract signing in Bangkok on Wednesday
The PM even spoke in Chinese at the signing of the commercial agreement and said this: ‘Let’s unite in concerted efforts and wish everything goes well on the project.’
The ceremony took place at Government House in Bangkok and was also attended by Thailand’s Transport Minister, Saksayam Chidchob.
The contract, signed on Wednesday, is for ฿50.6 billion, which is part of an overall budget of ฿173 billion for the 253 km rail link.
The contract has been dubbed Contract 2.3 and it is reported that loan facilities for it are being advanced by China although 80% of the funds loaned will be in US dollars with the balance being in Thai baht.
State Railway of Thailand signed the deal for Thailand with Chinese firms to begin delivery of the Thai Chinese high-speed rail link
The contracting party for Thailand at Wednesday’s ceremony was the State Railway of Thailand which signed deals with two Chinese partners, China Railway International Company and China Railway Design Corporation.
A second leg of the project will be undertaken after 2025 when the 325 km route from Nakhon Ratchasima to Nong Khai will be commenced at an estimated cost in excess of ฿200 billion.
It is understood that the Chinese state railway company is working on plans to connect to the Thai line, at that point, with a hi-speed rail link from the mainland travelling through Laos where the Chinese government is also investing heavily.
The extended Thai Chinese high-speed rail link will eventually link Bangkok with Kunming, a key transport hub in the southern Chinese province of Yunnan.
The railway projects have long been considered a key goal of Thailand’s new Finance Minister, Arkhom Termpittayapaisith, since his tenure as Transport Minister in General Prayut’s junta government.
฿50 billion in a contract for the building blocks of the first stage of the high speed rail line
Wednesday’s contract covers the building blocks of the new railway line including signalling, communications, the railway carriages as well as technology and know-how developed in China.
It also includes training for Thai personnel who will work on the line after it becomes operational.
The hi-speed rail link will provide rapid access from Bangkok to the northeast of the country and in the other direction.
The Prime Minister was mindful of these possibilities when he enthused that the new rail link will help to develop Thailand’s tourism and trade within ASEAN and Asia as well as making it a key transport hub.
President of the Thai Chinese Chamber calls for a greater impetus to attract more Chinese investors
The signing comes less than a week after the President of the Thai-Chinese Chamber of Commerce, Narongsak Puttapornmongkol, called for a renewed impetus and better terms to attract foreign investors from China into Thailand particularly to the governments’ flagship Eastern Economic Corridor project.
‘If the Thai government speeds up improving investment regulations to facilitate foreign investment and property purchase, notably for Chinese investors, I am confident it will effectively draw foreign investors, including those from China, to invest in the Eastern Economic Corridor and the property business in Thailand,’ he said.
Chinese submit Board of Investment proposals representing four times that of Japanese firms in 2019
The business leader suggested widening the scope of projects eligible to enjoy the tax breaks and incentives on offer through the Eastern Economic Corridor scheme in Rayong, Chonburi and Chachoengsao.
The Thai Chinese Chamber of Commerce boss drew attention to the fact that, despite Japan still being the biggest foreign investor in Thailand followed by the US and Taiwan, Chinese firms submitted four times as much when it comes to investment applications to the Board of Investment in respect of the Eastern Economic Corridor project in 2019.
The investment proposals totalled ฿262 billion for last year which Mr Narongsak noted would surpass the investment made by Japanese firms in Thailand.
He attributed this to the response of Chinese firms to the US-China trade war as they move their production offshore to avoid punitive US tariffs.
Two Chinese firms have already purchased land for two smart cities in Chachoengsao and Chonburi
Mr Narongsak also revealed that there are two huge Chinese companies who are currently awaiting an opportunity to build two smart cities in the Thai provinces of Chachoengsao and Chon Buri.
The firms concerned have already purchased the land in the key provinces designated under the Eastern Economic Corridor scheme for the development of the two cities.
A 3,000 rai plot has been purchased in Chachoengsao while a 700 rai plot is already in place in Chonburi.
Mr Narongsak revealed that the firms have ฿10 billion to invest in the cities which he foresaw becoming home to Chinese investors in the Eastern Economic Corridor project.
About the Author
Joseph Anthony is an expat from Ireland who has lived in Thailand for the last decade. He has worked extensively in the media including editorial positions in Ireland and Thailand. He is focused on economic and business stories in Thailand as well as the expat lifestyle.