I. Research Background
i. Practical Overview ………………………………....
ii. Research Team Introduction ……………………....
iii. Research Focus …………………….…………….....
II. Chinese Investment in Thailand
i. China’s ‘Going Out’ Strategy: Challenges …………..
ii. China’s ‘Going Out’ Strategy: Opportunities …..……....
III. Discussion and Suggestions
i. Know Your Investment Destination …………………..
ii. Seek Common Ground …………………….………
iii. Strengthen Collaboration ………………………………
i. Research Team Members ………………………………..
ii. Research Itinerary ……………………………….
iii. Company Bios ……………………………….
i. Practical Overview
The Kingdom of Thailand is a constitutional monarchy in Southeast Asia and one of the world’s emerging industrial countries and market economies. As one of the founding members of ASEAN (Association of Southeast Asian Nations), Thailand has a comparatively open and free investment environment, and has attracted investment from Chinese companies and industries since the establishment of diplomatic relations in 1975. In the past decade, China and Thailand have launched a series of new strategic initiatives in economic zones aimed at infrastructure and industrial development, thus furthering the path of Sino-Thai economic and trade cooperation.
ii. Research Team Introduction
Our team is comprised of 11 students from the Tsinghua-Johns Hopkins SAIS Dual Degree Master’s Program, affiliated with the Department of International Relations in the School of Social Sciences at Tsinghua University and the Johns Hopkins School of Advanced International Studies. In its fourth year, it is the first dual degree master’s program focused on global politics and economics jointly run by Chinese and US institutions of higher education. Students in the first cohort founded the NexGen Global Forum, a think tank whose mission is to advance greater mutual understanding of foreign policy and cultural perceptions by reexamining traditional frameworks of debate on current events, and students in subsequent cohorts have undertaken research projects aimed at better understanding China and its role in international relations.
A list of participating students can be found in the appendix.
iii. Research Focus
Thailand has had a healthy and robust relationship with the People’s Republic of China since the commencement of diplomatic relations on July 1st, 1975. In April 2012, the two countries established a comprehensive strategic partnership and have since signed several bilateral agreements and memorandums of understanding (MOUs) in the areas of maritime cooperation, education, energy, and culture. Thailand is the trade center of Southeast Asian and also a place that many foreign investors value. Major investing countries currently include the US, Japan, South Korea, and of course, China. In recent years, the Chinese government’s new Belt and Road Initiative (BRI) has become a hot topic in Southeast Asia. Thailand is also the Chair of ASEAN for 2019 and will play an important role in advancing and coordinating ASEAN involvement in BRI projects.
In this report, our research team has attempted to explore BRI’s impact on the development of Chinese companies doing business in the region from an international relations perspective.
i. China’s ‘Going Out’ Strategy: Challenges
Based on our field research, we have concluded that the main challenges that Chinese businesses encounter in the Thai market are cultural differences between the two countries, competition with companies from other countries (most notably Japan), and legal complexities that have made it difficult for companies not familiar with Thai law to conduct operations smoothly.
1. Cultural friction
China and Thailand have very different lifestyles and ways of thinking, which have greatly affected and in some cases even hindered the work of Chinese companies in Thailand. Two phrases emblematic of Thai culture are สบาย(sa-bai) and ใจเย็นเย็น(jai-yen-yen). Sabai means comfort and jaiyenyen literally means ‘cool heart’, or being patient and laidback. Thailand’s historically agrarian economy and tropical climate have been responsible for shaping the country’s laidback culture. In the workplace, locals typically prioritize comfort over efficiency, which is at odds with the Chinese concept of ‘time is money’. Many companies we spoke to mentioned instances where local workers were unwilling to put in overtime because they viewed this as an encroachment on their private lives. The Thai people’s adherence to this laidback way of living subsequently calls into the question the utility of a high-speed rail in Thailand (the project was first introduced during Prime Minister Abhisit Vejjajiva’s term from 2008-2011, but there have been two cabinet transitions since then and it has since resumed bidding under the military government run by Prime Minister Prayut Chan-o-cha), where people would prefer driving leisurely to their destination and enjoying the sights along the way rather than getting from point A to point B as quickly as possible. The stagnation of the high-speed rail project may also be related to the country’s small population size, concentrated economic centers, and relatively comprehensive road networks.
Chinese companies doing business in Thailand have also encountered friction between Chinese and Thai working mentalities. Chinese companies have the tendency to present their investment as a form of assistance to locals, adopting an attitude of “let me help you” or “here is a product I want to sell to you”. This approach typically comes off as condescending to Thai business partners, since the country views itself as a regional leader in Southeast Asia. Based on the experiences of the companies we interviewed, Thai stakeholders prioritized receiving respect over a project’s profits and often rejected projects if they felt that they were not being respected. Therefore, Chinese companies should recognize that understanding local culture is the foundation for effective business development. While respecting Thai traditions, companies should also carefully study local laws and understand the local policy environment in order to protect their own economic interests.
2. Competition with Japanese companies
Another challenge that multiple companies shared with us, often unprompted, was the competition they faced from established Japanese companies in Thailand. Japanese investment in Thailand began in the 1950s and 60s, and Japan remains Thailand’s largest source of foreign aid and investment. Japanese companies also have a reputation for being very detail-oriented; before and during the project implementation process, Japanese companies conduct strict preliminary investigations and appropriate due diligence, emphasizing quality and brand building. The Japanese style of doing business focuses on building long-term relationships, and the Japanese government has a deep insight into and respect for Thai culture. As a whole, Japan’s soft power influence is much more far-reaching than China’s.
However, there are many promising areas of cooperation between China and Thailand. For example, the Thai-Chinese Rayong Industrial Zone located in Thailand’s Eastern Economic Corridor (EEC) has already become a top choice for Chinese companies investing in Thailand. Thailand is especially poised to collaborate with China as it is trying to increase investment and trade opportunities in the EEC, a region encompassing the eastern seaboard of Thailand that serves as the center for the country’s export-oriented industries. By the end of 2016, China’s investment in the EEC had already exceeded $30 billion USD, and Prime Minister Prayut stated in a formal address in May 2018 that it was logical and mutually beneficial for the EEC to link up with the BRI.
There are also many areas for Sino-Japanese cooperation in Thailand--both governments are currently involved in a project to build an environmentally friendly smart city in Chonburi. Japan’s infrastructure investments in the region would help its stagnating economy and pursue new sources of economic growth, but investment in Thailand is close to saturation and its participation in projects that require large amounts of financing is limited by its own economic growth constraints. Though Chinese companies usually offer lower bids for projects, Japanese companies have a greater cultural and situational understanding of everything related to where they decide to invest, so trilateral cooperation is a promising way for Chinese companies to develop in Thailand.
3. Legal Obstacles
Complicated laws and regulations governing market entry and business operations also present a challenge for Chinese companies in Thailand, as there are strict laws that protect local industries and local labor. Sectors like the service industry and construction industry are so well protected that foreign companies can hardly compete with local businesses, much less dominate the market. According to Thai law, foreign corporations must work with a local firm and form a joint venture (JV) to gain greater market access; additionally, the foreign component of the JV can only hold at maximum 49% of the company’s stock. The companies we interviewed stated that once a foreign company has gained market access and begun operating and launching projects, it should appeal to the local community for their support and to ensure that the projects meet environmental standards and bring no harm to the community.
Furthermore, Thai laws protect the local labor force. Most companies are encouraged to hire more Thai employees and to maintain a Thai-foreign employees' ratio of 3:1. Additionally, there are quotas and restrictions on companies that apply for work permits for foreign employees; these regulations further dictate the kind of work foreign employees are allowed to do, and their duration of stay. Chinese companies in Thailand should be aware that Thai employees enjoy substantial labor rights such as fixed working hours, hiring and dismissal protections, and other benefits granted by law. Companies that lack this knowledge and mistreat Thai employees can find themselves in lengthy legal proceedings and may even be forced to close.
Given the many challenges in the Thai market mentioned thus far, why do Chinese companies choose to invest in Thailand? What are some characteristics of the Thai market that attract Chinese companies? Are there other factors pushing Chinese companies to invest abroad? The following section attempts to answer two questions: why Chinese companies ‘go out’, and why they choose to invest in Thailand.
1. Why are Chinese companies investing abroad?
(1) Changes in the international environment
‘GoingOut’ (走出去, pinyin: zouchuqu) refers to Chinese government policies encouraging domestic companies to invest and expand overseas, and initiatives have reached a new stage with 2018 marking the 40thanniversary of China’s reform and opening up. In a changing international environment where many countries are shunning globalization in favor of trade protectionism, Chinese companies can gain a comparative advantage by working with host countries to promote mutually beneficial initiatives and create a new inclusive growth model in the Asia-Pacific region. Ever since China has become the world’s second largest economy, it has tried to make its economic growth an opportunity, not a threat, for regional countries by being a provider of investment and technology. Chinese FDI to ASEAN countries increased from 1.2 billion USD in 2013 to 3.5 billion USD in 2016.
Considering the rising tensions in the Sino-US relationship and the current trade war, Chinese manufacturers are also moving production offshore to avoid tariffs and diversify risks. In 2018, 18 companies entered the Thai-Chinese Rayong Industrial Zone, accounting for 15% of the 118 companies and representing the largest increase in a single year since the zone was established in 2005. Many manufacturing companies looking to relocate are drawn to Southeast Asia, and not just because of cost considerations. Through our interviews, Chinese companies stated that the prices of products manufactured in Thailand are not lower than domestic prices due to sunk costs such as labor and raw material imports. However, given the uncertainty of trade policies such as tariffs, diversifying investment overseas is a major driving force behind the ‘going out’ of Chinese companies.
Given the Chinese government’s enthusiastic support of BRI, Chinese companies have new opportunities in overseas development. In addition to economic initiatives, enterprises also have the chance to explore the internationalization of Chinese companies, establish businesses with real world influence, and demonstrate China’s dedication to integrate into the international community and trade networks.
(2) Internal pressures facing Chinese businesses
According to the “Report on the Globalization of Chinese Enterprises” released by the Center for China and Globalization in 2018, foreign investment by Chinese companies in 2017 declined for the first time since the global financial crisis to 158.29 billion USD. Despite the decline, there is still a high demand for FDI from Chinese companies, driven not only by the international economic system but also by the demand of Chinese companies themselves.
Cross-border mergers and acquisitions are still the most direct and effective way for Chinese businesses expanding abroad, and the proportion of greenfield investment is still relatively low. Since overseas assets are still relatively inexpensive, Chinese companies can complete acquisitions at a lower cost while gaining mature resources such as technology, talent, established industrial processing chains, and sales channels needed for their own transformation and upgrades. At the same time, they can diversify production by holding overseas assets, reduce production and transportation costs, and avoid tariff barriers.
Manufacturing, one of China’s more competitive industries, accounted for 40% of FDI by Chinese companies in 2017. Chinese companies in the rail, electric, textile, and automobile industries utilize relatively advanced technologies and high production capacity. Due to their expanding production scale, investing overseas can increase China’s access to raw materials, give Chinese companies international management experience, and raise their competitiveness against foreign companies in the domestic market.
From the political and economic perspective of FDI, Chinese companies believe that now is an optimal time to expand overseas. As the Chinese economy adjusts to a new industrial structure brought about by supply-side structural reform, the contraction of the domestic market provides an opportunity for companies to focus on the expansion of overseas markets. The deepening of BRI has further promoted the formation of an open and integrated economic cooperation framework with China at the helm. At the policy level, the Chinese government has relaxed some approval procedures since 2014 to support the ‘going out’ of Chinese companies in competitive industries. Chinese financial institutions are also constantly adapting to be able to better support the needs of companies located overseas. Given this confluence of factors, Chinese companies are trying to take this window of opportunity to enhance their level of internationalization.
2. Why choose Thailand?
(1) Advantages of the Thai market
The Thai market has a unique geographical advantage as a transportation and infrastructure hub for Southeast Asia. Located in the central part of the Indochinese peninsula, it borders Myanmar and the Andaman Sea in the West, Laos in the Northeast, Cambodia in the East, and Malaysia in the South. Mr. Gao Ming, the manager of Foton Automobile Thailand, mentioned in an interview that Chinese companies entering Thailand have the potential to spark Thailand’s potential and revitalize the entire Southeast Asia region.
Although Thailand’s frequent regime changes have called into the question the stability of the investment environment, Thailand’s social environment remains relatively stable, and its basic and supporting industries are adequately developed, making Thailand a country that is attractive for overseas investment in the Asia-Pacific region. As a founding member of ASEAN, Thailand’s products are also marketed in the ASEAN Free Trade Area (AFTA). For example, Thailand is the automobile manufacturing center of Southeast Asia and the largest automobile market in ASEAN. Entering Thailand means having access to the entire ASEAN market, and Chinese companies in the Thai-Chinese Rayong Industrial Zone can rely on the “Made in Thailand” brand (with the Form D certificate of origin) to sell its products to other ASEAN countries, or even Europe and the US. The China-ASEAN free trade agreement, which guarantees zero tariffs on goods traded between the two areas, will also offset the impact that high tariffs from the US-China trade war have had on the Chinese economy.
(2) Preferential policies of the Thai government
Integrating Thailand’s EEC and the China-led BRI is a mutually beneficial endeavor for both countries. Developing the EEC is part of the Thai government’s plan to develop its industrialized economy further and break out of the middle-income trap. Thailand aims to move away from industries reliant on cheap labor and target investment in hi-tech industries to transform the EEC, which covers the eastern provinces of Chonburi, Rayong, and Chachoengsao, into a hub for sophisticated manufacturing and services, as well as a transportation hub connected to its ASEAN neighbors. The Thai government has identified improved infrastructure as one of the core areas it must focus on to transform the EEC, since increased connectivity by air, land, and sea is vital to driving its trade network. Although preferential policies for the EEC are not yet applicable to enterprises, they have overlapped with the stimulus policies of Thailand’s Board of Investment (BOI), and the EEC remains a positive area of investment for Chinese companies entering Thailand.
According to BOI stimulus policies, enterprises in the EEC only levy a 20% corporate income tax that is reduced by 50% in five years, and the maximum reduction or exemption can be extended up to fifteen years. Imports of mechanical products and raw materials used for production are tax-free, and special funds can be set up to support research and design innovation and attract high-tech talent. Corporate management, investors, and experts participating in projects also enjoy a personal income tax rate of up to 17%. Participating companies also are granted land ownership licenses and visa procedures for employees are simplified. These stimulus policies have greatly facilitated the entry of Chinese companies to the Thai market. In addition, Thailand has introduced a preferential tax policy for companies whereby the first eight years are tax-free and the following five years are taxed at 50%, increasing the attractiveness and amount of possible investment. As laid out above, there are many policy advantages the Chinese companies can enjoy in the Thai market.
Based on the above analysis of the challenges and opportunities faced by Chinese enterprises investing in Thailand, we propose the following recommendations below:
i. Know Your Investment Destination
Before entering the Thai market, Chinese enterprises should learn more about local policies and institutions related to finance, laws, and investment in advance to ensure the legality and compliance of all procedures in the foreign trade, foreign investment, overseas operations and overseas engineering construction fields.
China can look at Japan's financial cooperation with Thailand as a positive example. In March 2018, the Bank of Thailand and the Ministry of Finance of Japan signed a memorandum that cleared transactions between the two parties directly in the currencies of their own countries. Through this, Japan and Thailand will directly use the exchange rate of Japanese yen and Thai baht in transactions, avoiding the use of US dollars or other foreign exchange. Such direct transactions can effectively reduce the risks of foreign exchange transactions undertaken by the two countries and promote mutual economic development. In an investment environment where many countries are favoring trade protectionism, having a stable monetary policy and interest rates mean good economic prospects for the two countries. Chinese companies that have experienced the effects of the trade dispute between China and the United States in 2018 should consider reaching a similar agreement with Thailand to enhance the compatibility and frequency of cooperation between the two countries, as well strengthen the stability of Chinese enterprises' development in Thailand. This would be an important step towards economic support and protection for the over a dozen enterprises that moved to the Thai-Chinese Rayong Industrial Park in 2018 due to the trade friction.
To better adapt to the local financial environment, Chinese banks should expand business with initiatives like ICBC's dual-currency debit card. This kind of business enables Chinese enterprises and individuals in Thailand to adapt to the living environment of Thailand more quickly, and also promotes the liquidity of the RMB and Thai baht. Expanding this business to Thai customers will also enable them to use the RMB more broadly, enhance the Thai people's understanding toward China, and promote the initiative of RMB internationalization. Facing competition from Japanese banks, it is necessary for Chinese banks to expand their business in this field, which can strengthen the credit rating of the RMB in international transactions and make contributions to the adaptation process of Chinese enterprises and people in Thailand.
In addition, on the premise of the establishment of the ASEAN Banking Integration Framework (ABIF), Chinese enterprises should study and understand the direct impact of this framework on investment and development in Thailand as soon as possible. ABIF would change the operation ways of ASEAN countries’ banks in Thailand, giving them the same treatment as local banks. Under this framework, the trading speed and trading volume between ASEAN countries will increase. After the improvement of this framework in 2020, banks in ASEAN countries may have more resources to compete with Chinese banks in business. For Chinese enterprises, this represents more financing channels in the future, but at the same time, it is possible that they will need to compete with more enterprises from ASEAN. Before the formal establishment of this framework, Chinese companies and banks should pay attention to the details of the rules to maintain the economic development of Chinese institutions in Thailand.
Chinese enterprises also need to pay attention to local laws and regulations in Thailand. At the initial stage of their establishment, many Chinese-Thai joint venture companies did not understand pertinent laws and regulations of Thailand and were careless when signing authorization, which caused huge losses later. In addition, among labor disputes and other cases, many enterprises lost the lawsuit because they were not familiar with the labor laws of Thailand. At the beginning, Chinese companies should learn about the differences between the laws of China and Thailand from the Chinese embassy in Thailand and the Chamber of Commerce in order to be better prepared.
In facing challenges in the Thai market such as cultural integration, domestic laws and regulations, and competition with other countries, Chinese companies should adopt the "localization strategy" to adapt to the local cultural, legal and business environment as soon as possible. As the old adage “when in Rome, do as the Romans do” states, they should change their thinking methods and try to actively integrate into the local community.
Culturally, Chinese companies in Thailand should be cautious about the differences in religious beliefs between China and Thailand. First of all, the religious beliefs of Thai employees should be fully respected. Talesun Technology (Thailand) in the Rayong Industrial Zone has been a good example of a company that has done exceptionally well in integrating Chinese enterprises into Thai local culture and cultivating Thai employees' sense of identity with Chinese corporate culture. Spirit houses, or shrines placed in front of homes and businesses out of respect for the spirits believed to occupy the land, are an important part of Thai Buddhist culture. We observed that Talesun, as well as many other Chinese companies in the Rayong Industrial Zone, built spirit houses in front of their company headquarters. In speaking to Talesun management, they also mentioned that they invite monks to hold blessings in the company during religious festivals at the suggestion of Thai employees in order to cultivate the Thai employees’ sense of identity with the company as well as form a harmonious and inclusive company atmosphere.
From the perspective of talent localization, language barriers also greatly affect communication and work efficiency in foreign-funded enterprises. During our field research, many companies shared with us their successful experience in holding Thai language training classes and Chinese training classes in phases. Meanwhile, some companies also chose to cooperate with more professional language and cultural institutions such as the Office of Chinese Language Council International (Hanban) to provide long-term Chinese training for relevant Thai personnel. In order to avoid the isolation of Chinese employees from local communities, China Railway Construction Corporation Limited (CRCC) provides housing subsidies for employees and encourages them to live in local communities of Thailand to better integrate into the linguistic and cultural environment of Thailand. In the process of project bidding, knowing Chinese and Thai is of great benefit to the preparation of bidding documents and the timely understanding of information and other works. Therefore, it is evident that training employees in Chinese and Thai is of great significance to improve the executive ability and work efficiency of Chinese companies in Thailand.
While removing language barriers to facilitate communication between Chinese and Thai employees, Chinese enterprises should also cultivate the loyalty of local Thai employees and adapt their corporate culture in the long term. Although Chinese employees have advantages in work efficiency, technical standards, language communication and other aspects, the employment ratio of foreign-funded companies stipulated by Thai law exacts a relatively high economic cost for a large number of Chinese employees stationed abroad. At the same time, most Chinese people have a strong feeling for their hometown, which causes a lot of resistance to long-term stationing abroad. After being aware of the various problems faced by Chinese employees overseas, the Talesun Technology Company subscribed to the concept of "localization management". Chinese employees sent to Thailand now have their return date set in their contract. Talesun also pays attention to the cultivation of Thai employees and tries to attract Thai employees with long-term career prospects, and to cultivate a sense of belonging and loyalty in employees, resulting in a low staff turnover. Chinese companies also attract and retain talents through career planning so as to ultimately establish themselves locally and achieve long-term development.
The localization strategy includes not only talent localization, but also the localization of production and operation. The localization of operations should be fully aware of the local environment, timely adjust business strategies, and cooperate with local enterprises to achieve mutual development. In the early stages of entering the Thai market, although Foton had an absolute advantage over Japanese enterprises, it also faced many difficulties in its development. After carefully studying local demands, Foton gave up the production of commercial vehicles, the main type of Japanese business, and instead worked on the development and production of pick-up type and heavy-truck type vehicles. At the same time, after studying the consumption habits of Thai consumers, Foton finally achieved a substantial increase in sales in the past two years by cooperating with several local banks that offer installment payment services to Thai residents. It also strived to improve after-sales service with positive results.
Considering the current international trade climate, where Chinese enterprises are facing anti-dumping and anti-subsidy measures and the China-US trade war, the localization of production will undoubtedly bring greater profits and a more open market environment to Chinese enterprises. According to the ASEAN agreement, products reaching the stipulated proportion in spare parts production, raw material procurement, and human resource management can enjoy zero tariff treatment in the ASEAN free trade area after obtaining a certificate of origin, which is a rare opportunity for Chinese enterprises with overseas factories. The localization of production not only helps Chinese enterprises obtain more economic benefits, but also helps them strengthen cooperation with local merchants and business. In the long term, it is fundamental to foster healthy and mutually beneficial economic and trade cooperation and create a good business environment with the idea of establishing roots in local areas and seeking common development.
Another problem faced by Chinese businesses in Thailand is fierce internal competition, especially price war and homogenization competition. In some bids, Chinese enterprises often rush to bid blindly, race to keep the prices down, and undermine each other's work, ultimately causing buyers and competitors to obtain profits. Even if a Chinese enterprise wins the bid at a low price, the project profit will be minimal or even a loss. Besides, due to the homogenization of resource endowment and human resources of Chinese enterprises, the products and competitive strategies of some enterprises in some industries are basically the same, so it is difficult to adopt differentiated strategies in the fierce market competition. In this situation, price wars and vicious competition are inevitable. These problems not only make Chinese enterprises' competitiveness decline, which is not conducive to their long-term development in overseas markets, but also exerts a negative impact on national interests. Based on this, we believe that in the process of “going out”, enterprises should “go out together”, strengthen cooperation, seek mutual benefits and win-win results and expand international market in a more rational and confident manner.
First of all, we should speed up the establishment of a coordination mechanism for enterprises of “going out together” at the macro level. Government departments should formulate development plans, reform management methods, and improve relevant policies. On the one hand, the government should provide the necessary information, technology, capital, guidance, and other services and support for Chinese enterprises looking to invest in Thailand, so that enterprises can "go out" in a targeted way and avoid blind investment. On the other hand, in case of conflicts of interests between enterprises, it is necessary to expand channels of interest communication, establish overseas investment interest coordination mechanisms, and give full play to the active coordination role of government diplomacy, trade associations, consulates stationed abroad and Chamber of Commerce, effectively resolving the contradictions among enterprises.
Secondly, the government should guide enterprises to form a cohesive force and promote the overall “going out” of domestic industry cluster zones. While enhancing the coordination and viability of overseas enterprises, the risks brought by enterprises' “going global alone” can also be reduced by the force. In this regard, Chinese enterprises can learn from Japanese enterprises and follow the model of large enterprises driving small and medium-sized enterprises. First, manufacturing and other large enterprises go global, followed by supporting parts enterprises, service enterprises and banks, etc. The powerful coordination between upstream and downstream firms not only contribute to avoid excessive homogenization competition in the same industry, but also can improve domestic enterprises’ control over the whole industrial chain, forming the competitive advantage of industrial clusters.
In addition, overseas organizations like the Chamber of Commerce and trade associations should play a positive role in coordinating the interests of enterprises. During our survey, some interviewees pointed out that some industry associations in Japan would regulate overseas enterprises. For instance, in the automotive sector, if an enterprise accounts for 60% of the market in Thailand, then the association will prescribe that the enterprise's market share in other countries should be lower than that of other enterprises. This kind of coordination and restriction on different enterprises and industries reduces the possibility of excessive competition and price war among enterprises in the industry. Relatively speaking, at present, the Chinese Chamber of Commerce in Thailand still focuses on providing information and other services while lacking overall coordination on the industry. Of course, this also requires the support of national policies and long-term cooperation between enterprises.
Another feasible suggestion is to give full play to the role of the overseas industrial park and do a good job in its top-level design. In recent years, under the background that China's overseas industrial parks have gradually seen the rise of the trend of homogenization of competition, the Industrial Park in Rayong has been ranked highly in the overseas industrial parks evaluation. In order to enhance the coordination effect of overseas Chinese enterprises, the Industrial Park in Rayong adheres to the concept of "selecting enterprises over attracting investment", and strengthening the investigation on the introduced enterprises, so as to form the industrial chain of upstream and downstream cooperation and avoid excessive homogenization competition among Chinese enterprises. In the meantime, the industrial park organized a team of professionals made up of China and Thai employees to reduce investment risks and investment costs for Chinese enterprises in Thailand. It offers "one-stop" services, including research and analysis of target market, industrial policy consulting, interpretation of laws and regulations, establishment of preferential policies, investment registration and approval, tax and financial services planning, and labor recruitment. After the enterprise enters into the industrial park and begins regular operationa, the industrial park will provide tracking services through a variety of activities. These measures reduce the investment risks for the China-invested enterprises here and regulate the behaviors of enterprise, achieving a good cooperative effect in the industrial park. The advanced experience of the Industrial Park in Rayong also has great reference significance to the overseas industrial parks in Thailand and other countries.
Generally speaking, China has a tradition of business cooperation in view of ethnic groups and regions. There emerged a large number of major business groups, such as Teochew business, Shanxi merchants, Huizhou merchants and businessman of Chekiang. The inheritance and development of such excellent cooperative cultural traditions as mutual support and honesty has laid a foundation for the continuation of commercial civilization in Chinese history. Under the Belt and Road Initiative, when enterprises go global, there is more so than ever a need to inherit and carry forward such a tradition of avoiding infighting and working together for win-win results.
I. Research Team Members
Responsible for overall coordination of team travel.
General Services Section
Responsible for management of team member information and the correspondence with academic departments
Responsible for planning trip itinerary, arranging transportation and accommodation, financial and material management, etc.
Responsible for writing and issuing press releases (both in Chinese and English) during the research trip.
Responsible for designing research plan, organizing questionnaire design and translations, interview outline design, etc.
January 19 (Sat.)
Departure flight: TG675, arriving Bangkok, Thailand at 11:50 AM
Visiting the historic overseas Chinese residential area
Visiting the historic overseas Chinese residential area
Recap and go over next day’s research plan
Site visit to Foton Motor Co., Ltd. factory
Site visit to China Harbour Engineering (Thailand) Co., Ltd.
Summarize and organize next day’s research
Site visit to Thai-Chinese Industrial Park in Rayong
Site visit to Thai-Chinese Industrial Park in Rayong
Summarize and organize next day’s research
Site visit to China Cultural Center in Bangkok
Site visit to the commercial and economic office of the Chinese Embassy
Summarize and organize next day’s research
Site visit to Bank of China (Thai) Public Company Limited
Site visit to China Railway Construction Corporation Limited (Southeast Asia)
Summarize and organize next day’s research
Site visit to Industrial and Commercial Bank of China (Thai) Public Company Limited
Site visit to China State Construction Engineering Corporation(Thai)
Summarize and organize next day’s research
Site visit to Chulalongkorn University
Return flight: TG614, arriving in Beijing at 3:50PM
1. Industrial and Commercial Bank of China (Thai) Public Company Limited
ICBC (Thai) is a subsidiary of Industrial and Commercial Bank of China (ICBC), formerly known as ACL Bank. Founded on August 26th, 1969, originally as a commercial company, the company later obtained a license to undertake finance and securities business from the Ministry of Finance in 1973, and was renamed as "Asia Credit Financial Securities Co., Ltd." On 23 December 2005, the bank was granted a commercial bank license from the Ministry of Commerce and renamed as “ACL Bank Co., Ltd.” On April 21st, 2010, ICBC became the largest shareholder of ACL Bank and changed the name of the bank to “Industrial and Commercial Bank of China (Thai) Public Company Limited”, and ACL Bank became a part of the ICBC Group. ICBC is the largest commercial bank in the world in terms of market capitalization, customer deposits, profits and brand value. It has a solid customer base, diversified business structure, great innovation ability and strong competitiveness. It operates under multiple jurisdictions and has a leading position in all its businesses among China's commercial banks.
Bank of China (Thai) Public Company Limited (BOCT) is a wholly-owned subsidiary of Bank of China (Hong Kong) Limited (BOCHK). BOCHK is a major commercial banking group, with strong market positions in all major businesses and the largest branch network and diversified service channels in Hong Kong. Bank of China (BOC) has been established for more than 100 years and is the most internationalized and diversified bank in China. BOCT has been established for more than two decades in Thailand and continues to make full use of BOC’s huge customer resources and diversified banking services platform, giving full play to these advantages. Depending upon “going out”, the support strategy for overseas Chinese enterprises, RMB globalization, overseas Chinese businesses, BOCT will enhance the services provided to corporate and financial institutions and individuals, aiming to provide better financial services and supports for economic and trade exchanges between China and Thailand and for Thailand's economic development.
3. China Harbour (Thai)
A subsidiary of China Harbour Engineering Company Ltd. (CHEC) in Thailand was established in 1994 in Bangkok. Undertaking a batch of major municipal transportation construction such as Thai Rama VIII Bridge, Beilan pipe-jacking for underground sewage treatment, Thai Royal power supply underground cable pipe, and the south outer ring viaduct, China Harbour (Thai) is known for its excellent quality, and Thai Rama VIII Bridge has become a symbol of Thailand.CHEC is a wholly-owned subsidiary of China Communications Construction Company Ltd. (CCCC). On behalf of CCCC,CHEC expands businesses in international engineering market, mainly including maritime engineering, dredging and reclamation, roads and bridges, railways, airports, and related equipment supply and installation. In addition, it has rich resources and experience in the fields of housing construction, municipal environmental protection, water conservancy projects, power plants and power stations, and resource development. At present, there are more than 40 branches and offices around the world, covering more than 70 countries and regions. The contract value of projects under construction is nearly 10 billion US dollars, and there are more than 7,000 employees worldwide. CHEC has become a well-known brand with high reputation in the international engineering industry.
4. China Railway Construction (Southeast Asia) Company
China Railway Construction (Southeast Asia) Company is affiliated with China Railway Construction Corporation (International) Limited which is affiliated with China Railway Construction Corporation Limited (CRCC). Founded in 2013, China Railway Construction Corporation (International) Limited is formed by the integration of former China Railway International Economic Cooperation Co., Ltd., China Railway (Venezuela), Oriental International Construction Branch, China Railway (Laos), with registered capital of 1 billion yuan. It engaged in all kinds of engineering project investment and financing abroad, planning and counseling, survey and design, construction, installation and debugging, and operation maintenance management and so on. As one of the largest and most powerful comprehensive construction groups in China and even the world, CRCC ranked 58th on the Fortune 500 in 2018, 14th on the top 500 enterprises of China in 2017, and 3rd on the world's largest 250 contractors.
5. China State Construction Engineering Corporation
Founded in 1982, China State Construction Engineering Corporation (CSCEC), referred to as "China Construction”, the original State Administration of Construction as its predecessor, is a state-owned important backbone enterprise. The corporation is one of the few enterprises which doesn’t occupy the country's investment too much and doesn’t occupy natural resources and business patent. It is engaged in the completely competitive construction industry and real estate as its core business. China State Construction Engineering Corporation (CSCEC) is one of the construction and real estate enterprises which has the oldest history of specialized operation, the earliest market-oriented management and the highest degree of integration. It has a complete industry chain of construction products, including the research and development of product technology, survey and design, project contracting, real estate development, equipment manufacturing, property management. It is also the only construction enterprise with "three special" qualifications, "1 + 4" qualifications and class-A qualification of construction industry engineering design. In February 2017, Brand Finance released its 2017 annual list of the world's top 500 brands, with China Construction ranked 53rd. On July 12, 2017, China State Construction Engineering Corporation was awarded the level "A" in the 2016 annual business performance assessment by the State-Owned Assets Supervision and Administration Commission of the State Council. It ranked 23rd on the 2018 Fortune 500. In December 2018, World Brand Lab released Top 500 World Brands in 2018and China Construction ranked 321.
6. Thai-China Rayong Industrial Park
Thai-China Rayong Industrial Park is one of the first overseas economic and trade cooperation zones approved by the Ministry of Commerce of China, providing the best platform for Chinese enterprises to settle factories here. It is a modern industrial zone developed by Holley Group (China) and Amata Group (Thai) jointly for Chinese investors, which is located at the flourishing east coast of Thailand, close to capital city Bangkok and Laem Chabang deep seaport. The total programming area is 12 square kilometers, including general industrial zone, bonded zone, logistics and warehousing area and commercial living area. On October 25, 2018, Thai and Chinese politicians, business people and scholars held a seminar in Bangkok on the Belt and Road Initiative & development opportunities for Mekong countries. China's development benefits the Mekong countries and there is huge potential for cooperation between China and Mekong countries in various fields. Countries in the Mekong river basin are rich in resources, but many commodities are still in a blank state. China's many competitive industries can cooperate with these countries in production capacity to fill the technological and product gaps in this region, promoting the industrialization course of the Mekong river basin.
Chulalongkorn University (Thai: จุฬาลงกรณ์มหาวิทยาลัย) is the oldest institute in the Siam Area of Thailand and is respected as "the most prestigious university in the country". The university is ranked as the best university in Thailand, with 19 faculties, 3 graduate schools, 1 branch school, 14 research institutes, 2 education centers and 2 affiliated schools. The name of the university is taken from “King of Chulalongkorn” (Rama V) and the founder is “H.M.Vajiravudh” (Rama VI). Rama VI developed the school into a state-run administrative college and added many courses such as agriculture, business, education, engineering, water administration, law, medicine and public administration. A total of 950,982.39 baht was spent on building this university, and by 1917 this administrative college had a scale of a comprehensive university.
8. China Cultural Center in Bangkok
The China Cultural Center in Bangkok is the first Chinese cultural center established in Southeast Asia. The center aims to promote Chinese culture, develop cultural exchanges and cooperation between China and Thailand, and enhance the friendship between the two peoples and the friendly relations between the two countries. On December 17, 2007, the Chinese government and the Thai government signed the Agreement between the Government of the People's Republic of China and the Royal Thai Government on the Establishment of Cultural Centers and Its Status.On November 11, 2010, Wu Bangguo, the chairman of the Standing Committee of the National People's Congress of China and the chairman of the Thai National Assembly jointly laid a foundation for the Chinese Cultural Center in Bangkok and started the construction process of the Chinese Cultural Center in Bangkok. On November 21, 2012, Wen Jiabao, the Chinese premier and Yingluck Shinawatra, the Thai prime minister attended the opening ceremony of the Chinese Cultural Center in Bangkok. In his speech, premier Wen Jiabao stated that the Chinese Cultural Center in Bangkok is the first Chinese cultural center established by China in the ASEAN countries and is of exemplary significance. The establishment of this center will push the China-Thai cultural exchange to a higher level. The center is currently the largest overseas Chinese cultural center. Its core building inherits Chinese classical beam column structure, and adopts the dense eaves of the temples in Thailand, which integrates the classic architectural culture of China and Thailand.