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Japan, Thailand sign 7 deals to strengthen economic ties

Japan, Thailand sign 7 deals to strengthen economic ties

BANGKOK: The Thai government and its Japanese trade counterpart on Tuesday (Sept 12) signed seven formal agreements covering industrial upgrades, investment in the Eastern Economic Corridor (EEC), human development, and support for small and medium-sized enterprises. The signing took place at the symposium on Thailand 4.0 Towards Connected Industries, hosted by the Thai government. Hiroshige Seko, Japan’s minister of Economy, Trade and Investment, led 570 Japanese investors to seek investment opportunities, especially in the EEC, a flagship initiative of the Thai government. “Not only investors from Tokyo and Osaka but also from other cities have joined the huge trade mission,” said Seko, referring to Japanese investors who are interested in investing in Thailand and other Asean countries. He said Japan would continue to support Thailand as a hub of the Greater Mekong region, or CLMV – Cambodia, Laos, Myanmar and Vietnam.

Thailand’s Deputy Prime Minister Somkid Jatusripitak said he had asked the delegation to consider building a high-speed railway linking Vietnam, Thailand and Myanmar in addition to Japan’s plan to build a railway linking north and south Thailand. He also asked Seko to speed up free-trade negotiations under the proposed Regional Comprehensive Economic Partnership (Rcep), which would feature Asean, China, Japan, South Korea, India, Australia and New Zealand – but not the United States. Seko said Japan was interested in building a rail system linking east and west. “Details of an agreement on Rcep have been reached recently between myself and the Thai commerce minister, and we will propose them to the Rcep summit at the end of this year,” Seko told a press conference. Seko also said the Japanese government has launched a policy to upgrade its industries through automation, robotics and big data. This could be applied to Japanese manufacturing in Thailand and around the globe, he said. Thai Industry Minister Uttama Savanayana told Japanese investors that investment in the EEC in the first five years was expected to be US$43 billion (S$57.9 billion) – of which 20 per cent will come from the government budget and the rest will come from public-private partnerships (PPP).

However, it was too early to predict how much Japanese businesses will invest in the EEC, he said. So far, Toyota has committed to investing 20 billion baht (S$813 million) in hybrid car production, starting with 10 billion baht next year and another 10 billion baht the year after. He said memorandums of understanding would lead to concrete action soon. Japan would help its manufacturers in Thailand and Thai companies to upgrade their production and productivity by introducing automation systems, robotics and the “Internet of Things”. Japan would also help Thailand and neighbouring countries develop human resources, he added. Kanit Sangsubhan, secretary-general of the EEC Office, said Hitachi wanted to invest in a big data centre in the EEC. He said he would also talk with Mitsubishi Aircraft Corporation, which manufactures 70-seat commercial aeroplanes, about investing in the EEC, adding that Thai Smile Airline is considering buying their airplanes. When asked about the possibility that Chinese investors would replace Japanese investors, the two officials said Japanese investors had had a very strong investment base in the Eastern Region over the past 30 years.

Kanit, however, said Thailand’s economy was open to investors of all nationalities. Europe and the US had also shown a keen interest in investing in the aviation industry with Airbus and Boeing interested in an airplane maintenance centre in the EEC, while GE, the US industrial conglomerate, would also be invited to invest. Kanit said the EEC would be ready by the end of the year as the government would complete the terms of reference for investment in infrastructure projects, which comprise a high-speed railway, an airport, seaports and a “smart” city. International investors would then have an opportunity to see investment conditions and bid for projects, said Kanit. Vikrom Kromadit, founder of Amata Corporation Pcl, a leading industrial estate, said his company had cooperated with the city of Yokohama to develop a smart city in Amata Nakorn Industrial Estate in the Chonburi province. The project would cost about 10 billion baht and construction is due to start in December this year.