Recently, several Thai media outlets have contacted the Chinese Embassy in Thailand, requesting to conduct interviews on issues related to economic and trade relations between China and Thailand. The Embassy hereinbelow compiles the questions from various media and the answers are as follows:
1. Q: What is China's current economic development policy?
Answer: China is the world's second-largest economy, a major market, and a manufacturing powerhouse. China adheres to a mutually beneficial and win-win opening-up strategy and is a major trading partner of over 140 countries and regions, having contributed around 30% to world economic growth for more than a decade.
China is committed to building a high-level socialist market economy, promoting high-quality development and a high level of opening up to the outside world, with an aim to achieve comprehensive modernization. In today's turbulent world, China is willing to add stability to the world through its peaceful development, provide new opportunities for world prosperity through its open development, and work together with other countries to build a community with a shared future for mankind.
2. Q: How do you evaluate the achievements of economic cooperation between Thailand and China?
Answer: China and Thailand are good neighbors connected by mountains and rivers, close relatives with blood ties, and partners sharing a common destiny. The two peoples are as close as brothers, helping each other and sharing weal and woe.
China is Thailand's largest trading partner and the main export market for Thai agricultural products. Over the years, the Chinese market has absorbed more than 40% of Thailand's agricultural exports, with durian alone exported as much as $4.566 billion to China last year.
China is the main source of foreign investment in Thailand. According to incomplete statistics, there are over 1,000 Chinese companies investing in Thailand, and 588 projects have been proposedin the past two years, with atotal investment worth nearly $7 billion. Chinese corporate investment is mainly focused on electric vehicles, digital economy, new energy, and other modern manufacturing industries, which are highly aligned with Thailand's development strategy and thus maks important contributions to local industrial development, exports, employment, taxation, etc.
China is the main source of foreign tourists to Thailand. In 2019 before the Pandemic, there were as many as 11 million Chinese tourists coming to Thailand. This year, Thai authorities estimate that the number may reach 8 million, bringing in tourism consumption revenue of over 350 billion Thai baht.
We are willing to share the dividends of China's development with Thailand. With the continuous progress of China's comprehensive modernization construction, especially the continuous expansion of the Chinese market as a major market in global trade, and with the continuous improvement of connectivity between the two countries, including the hard connectivity of transportation arteries and the soft connectivity of facilitation policies, we believe that the conomic and trade cooperation between China and Thailand has bright prospects and will better benefit the two peoples.
3. Q: How do you view the current trade imbalance between Thailand and China?
Answer: The trade structure between China and Thailand is complementary and mutually beneficial. The trade relationship between China and Thailand was mainly characterized by China's trade deficit and Thailand's trade surplus before 2019, but after 2020, it has shifted to China's surplus and Thailand's deficit. This is the result of the supply-demand relationship under the market economy conditions of both countries. A deficit or surplus cannot be equated with loss or advantage; the key is to see if it meets the needs of the country. China has a super-large market, and we never aim to achieve a trade surplus with Thailand. We welcome more exports from Thailand and have provided various conveniences and support for this.
Recently, there has been a lot of discussion in local media and online community about China's exports of goods to Thailand. In fact, nearly 80% of China's exports to Thailand are capital goods and intermediate goods, which are needed for local manufacturing in and exports from Thailand. The so-called cheap Chinese goods that receive a lot of public attention are mainly daily chemical products, food, health products, clothing accessories, etc. These goods account for less than 10% of China's total exports to Thailand, and their quantity is only half of Thailand's exports of agricultural products to China. Moreover, a considerable part of them, such as temperate fruits like citrus produced in China and durian exported from Thailand to China, are actually complementary products for the two markets and meet the needs of consumers in both countries.
According to media reports, some Chinese-exported small commodities to Thailand have non-compliance issues, such as a lack of Thai Food and Drug Product Certification (FDA) or Thai Industrial Product Certification (TISI) in customs clearance and subsequent sales processes. The Chinese government has always requested Chinese enterprises and citizens to strictly operate in accordance with laws and regulations in their foreign economic activities. We support the Thai government in strengthening supervision in accordance with the law, correcting and banning relevant violations.
Some small and medium-sized enterprises in Thailand that produce daily necessities are facing competition from imported product, coupled with other unfavorable factors, making their operations difficult. We are well aware of the importance of small and medium-sized enterprises to Thailand, and we understand their difficulties. We believe that their production and operation should be supported and assisted. We are also willing to assist them in obtaining more favorable business opportunities and finding greater development space in the extensive economic and trade cooperation between China and Thailand.
4. Q: How do you view the role of Chinese-funded enterprises in Thailand's development?
Answer: Huawei is a Chinese high-tech enterprise well-known among Thai friends. Walking into the Huawei Thailand office building, there is a very eye-catching row of words on the wall that reads "In Thailand, for Thailand", which is also a common concept among more than 1,000 Chinese-funded enterprises investing and developing in Thailand. Chinese enterprises investing and setting up factories in Thailand does not only have their own needs for international operations, but are also driven by the good wishes of the China-Thailand bond to support Thailand's development.
Investment from Chinese enterprises could support the development of emerging industries and enhance international competitiveness in Thailand. Thailand is the first country in Southeast Asia to achieve commercial use of 5G, and its digital economic transformation is at the forefront of other countries in the region, with contributions from multiple Chinese communication and digital technology companies such as Huawei, ZTE, and China Mobile. Thailand is actively developing new energy industries and promoting green economic transformation, while Chinese enterprises in electric vehicle production, photovoltaic panel manufacturing, solar power generation, etc., have actively participated in this process and played an important role. The total output value of the Thai-Chinese Rayong Industrial Zone has exceeded 30 billion US dollars, of which 80% is exported to the international market.
Chinese-funded enterprises in Thailand are conducting localized operations and are committed to integrating with local enterprises for development. Establishing local industrial and supply chains could reduc production costs and promote local industrial development, which is in line with the business philosophy and goals of Chinese enterprises investing in Thailand. In fact, Chinese-funded enterprises in Thailand not only comply with the regulations on certificates of origin and ensure that more than 40% of the added value of their products comes from the local market, but also actively expand the proportion of local procurement. Xinyuan Energy Thailand has 459 local suppliers, China Resources Thailand has over 700 local suppliers, and SAIC Motor-CP has over 100 local suppliers.
Chinese-funded enterprises in Thailand help increase employment and train talents. Providing employment opportunities is an important way of Chinese-funded enterprises to benefit local people. Thailand also has relevant regulations that a minimum of 4 Thai employees is required to sponsor a work permit for a foreign employee. In this regard, the performance of Chinese-funded investment enterprises in Thailand is much better than required by the Thai government. Local employees make up 97.5% of SAIC Motor-CP’s total staff, for Haier Thailand it’s 94%, and for Zhongce Rubber Thailand it’s 92%. It is estimated that Chinese-funded enterprises in Thailand have created more than 300,000 job opportunities. These employed individuals not only have good and stable income but also receive excellent skill training from their employers , becoming talents with unique skills. In Thailand, Chinese companies not only cultivate talents for their own enterprises but also for the Thai society. Huawei has established the Huawei ASEAN Academy (Thailand), providing training courses for a total of 96,200 local people.
Chinese-funded enterprises in Thailand are enthusiastic about public welfare and charity activities. They have been actively providing financial support to local vocational education, healthcare, and social charity, which brings tangible benefit to the Thai society. Bank of China Thailand provides funding to support Braille education, Sany Heavy Industry Thailand provides charitable donations to orphanages in Thailand, China Water Electronics Corporation donates mangrove funds to the Bangkok municipal government, and Haier Thailand provides funding to support the construction of local primary schools. Several Chinese-funded enterprises have been awarded the "Outstanding Achievement Award for Social Responsibility", "Outstanding Enterprise Award for Labor Relations and Welfare", and "Best Employer Award" by Thai government departments.
From media reports and investigations by the Thai police,some Chinese citizens are in the service industry. Among them, a small number are involved in pornography, gambling, and drug dealing, and some use "proxy ownership" to circumvent legal restrictions. The Chinese side supports the Thai side in investigating and punishing these violations in accordance with the law, to maintain a fair and just market order and business environment based on rule of law. In fact, the law enforcement departments of both sides have been cooperating well in cracking down on illegal activities and gray industries.
5. Q: How do you view the new problems brought by cross-border e-commerce platforms?
Answer: E-commerce platform is a new business form and model that emerges in the digital economy era. Countries are facing challenges in developing and managing them, as cross-border e-commerce poses new questions for economic and trade cooperation between countries.
On one hand, e-commerce reduces commercial links, saves transaction costs, and provides consumers with more convenient choices, which are unique advantages. On the other hand, it also brings serious competitive pressure on traditional business forms and new challenges to administration and supervision, guarantee of product quality and safety, and protection of the rights and interests of merchants and consumers. This requires us to actively respond by leveraging our strengths, avoiding weaknesses, seeking benefits, reducing harm, to effectively serve economic and social development.
Not long ago, the Thai side had a successful case of selling 4 billion Thai baht worth of products to China within two days through e-commerce live streaming sales. There were also cases of promoting Thai tourism products to Chinese tourists through e-commerce live streaming, with over 20 million views and sales exceeding 100 million Thai baht for single event.
The Chinese side welcomes Thailand to make good use of the new format of e-commerce to explore the Chinese market. China is willing to strengthen cooperation with Thailand in building digital capabilities of enterprises, exchanging best practice in e-commerce market supervision, and jointly taking advantage of new opportunities in the Internet era.