BCG to Boost Thailand’s Economic Recovery and Sets the Tone for China Thailand Cooperation

By Liu Chong

At present， the climate change problem has become an important global issue. In order to minimize the impact of climate problems and promote the sustainable development of the national economy， Thailand is actively exploring and promoting the BCG economic model to cope with the challenges of global climate change and provide solutions for the improvement of its international competitiveness.

BCG to boost Thai economy

In recent years， more and more local enterprises in Thailand have focused on practicing the concept of sustainable development across the whole value chain by developing renewable agriculture， producing and processing sustainable materials， and promoting the recycling of organic waste， and have also embarked on a more environmentally friendly and inclusive development path. For example， Thailand Oriental Group took the opportunity to move away from traditional planting and processing industries such as sugarcane and cassava， and has become a successful case of Thailands BCG economic model leading the transformation of traditional industries. Driven by the BCG economic model， more enterprises from different industries are creating more potential development opportunities for the country.

The BCG economic model is giving a big boost to Thailands economy. The Thai Prime Minister Prayuth Chan-ocha recently said the countrys economy is expected to grow by 3.3% this year and 4.2% next year， basically returning to the growth level seen before the COVID-19 pandemic.

The BCG economic model is pushing more enterprises to optimize technology and enhance the endogenous driving force for development. The BCG economic model has also enhanced Thailands attractiveness for foreign investment. In the first six months of this year， 284 foreign-invested enterprises were approved in Thailand， up 7.58% year on year， according to data from the Ministry of Commerce. The total investment was THB 69.969 billion， up 73.48% year on year. An official from Thailands Ministry of Commerce predicted that through measures such as investment promotion and opening-up， more international investors will come to Thailand in the second half of this year， which will further help Thailands economy recover.

In addition， the BCG economic model has created more promising job opportunities for the Thai people， and has served as the operational basis for the Eastern Economic Corridor （EEC）. Data from the Ministry of Commerce shows that in the first six months of this year， 42% of the total foreign investment went to the EEC.

Green economy sets the tone for ChinaThailand cooperation

China has been Thailands largest trading partner for nine consecutive years， with bilateral trade already reaching USD 131.088 billion. This year marks the tenth anniversary since China and Thailand upgraded their relations to become comprehensive strategic cooperative partners. The two countries have also agreed to build a “ChinaThailand community for a shared future”.

The “China-Thailand BCG Economic Cooperation” Seminar （hereinafter referred to as the Seminar） which was held recently at the 2022 China International Fair for Trade in Service aims to strengthen information exchanges and cooperation in such economic fields as new energy， green environmental protection， carbon emission reduction， green finance， green food， green agriculture and green supply chains， promoting exchanges and cooperation among enterprises between the two countries.

In his speech， Zhang Shaogang， Vice Chairman of the China Council for the Promotion of International Trade， highlighted that China and Thailand are close and friendly neighbors， and the friendship between China and Thailand is that of “one family”with a long history. Chinas long-advocated carbonpeak and carbon-neutral green economic development concept coincides with Thailands green industrial upgrading model. Thailands strategic plans， such as the 4.0 Eastern Economic Corridor， are also highly compatible with the Belt and Road Initiative and the Guangdong-Hong Kong-Macao Greater Bay Area development strategy， and have created numerous business opportunities for investors from both countries.

With the RCEP coming into force， ChinaThailand all-round economic and trade cooperation has a broader space and a more promising future. When discussing strengthening BCG economic cooperation between the two countries， Zhang Shaogang put forward three suggestions： first， to strengthen international cooperation on the green economy and share the achievements of green development； second， to strengthen technology industry matching and jointly promote cooperation in terms of standards； third， to stimulate green practices and innovation and jointly take the leading role in the market.

Zhang Caile， Vice President of the ChinaThailand Chamber of Commerce， said， at the Seminar， that China and Thailand have a wide scope for cooperation in many domains. It is hoped that the Thai Seminar held by the Chamber of Commerce will serve as an effective platform for in-depth exchanges and win-win cooperation between enterprises from the two countries.

“Despite the global economic downturn and the repeated problems caused by the pandemic， Chinas service import and export growth in the first half of this year still exceeded 20%， highlighting the resilience of the Chinese economy，” said Cai Weicai， Senior Vice President of Kasikorn Bank of Thailand. He emphasized that the service industry is an important part of the Thai economy， and this years China International Fair for Trade in Service has provides a rare opportunity for the relevant industries in Thailand. Through this platform， Thai enterprises will be able to get more market information， share experience with their foreign counterparts， seek cooperation opportunities and expand their business opportunities.

A series of policy dividends released to support BCG

In order to further promote investment from domestic and overseas investors in the BCG industry， the BOI has issued a number of incentive measures to boost investment， encouraging more investors to invest in Thai industries such as biotechnology， biochemical production， biogas and bioenergy production， food and animal feed production， and construction of clean recycling facilities. Recently， the BOI has also approved a series of measures to encourage companies to adopt digital technologies for research and development.

Due to the promotion by the BOI， the BCG economic model has attracted the attention of Chinese investors. At present， China has become one of the major economies investing in Thailand and has already invested in 112 projects in total， with an investment of more than USD 1.1 billion.

At the Seminar， Wantana Thadan， Minister Counsellor of the Economic Investment Promotion Office of the Thai Embassy in Beijing， explained that the BCG industry would serve as a major economic foundation for Thailand， generating THB 4.4 trillion over the next six years. She also said that investments related to BCG industries may enjoy tax exemptions for three to eight years. At the same time， the Thai government has provided equal and convenient tax incentives for both Thai and foreign investors， including corporate income tax reductions， machinery import tax exemptions and import duty exemptions for relevant raw materials. In addition， the BOI is also offering non-tax incentives for investors to conduct business in Thailand. For example， for companies with a high proportion of foreign capital， the processing of investor visas and work permits is facilitated， and these services will not limit the amount of inbound foreign currency.

In 2003， Banpu Group， an Asian energy company focusing on innovation， technology and sustainable development， entered the Chinese coal market by investing in Asia American Coal Co.， Ltd. In the following years， the Group set up cogeneration and renewable-energy related businesses in northern China and areas along the Yangtze River coast. “Chinas energy market has great potential. Banpu is confident in the development of the industry and that its business in China will continue to grow. As a Thai enterprise， I hope to find more cooperation opportunities with which to help Chinese enterprises go abroad，” Zhou Peng， Director of Strategic Planning and Analysis of Banpu Investment China， said at the Seminar.

For Chinese companies investing in Thailand， Zhou Peng suggested that they should first understand the local business environment and the local governments investment policies and the laws and regulations on relevant industries. Secondly， it is important to select a strong and suitable partner so as to overcome the inevitable cultural differences and potential market risks. At the same time， the Thai people have a strong sense for environmental protection and development of the green economy， and companies are supposed to earnestly fulfill their social responsibilities in order to get support from the local government and the people. In addition， the comprehensive services provided by local government investment promotion agencies could be considered to effectively address the difficulties encountered during the investment process.