Thailand Seeks Taiwanese Investors

Thailand has made Taiwan one of its major target countries in Asia from which to attract foreign direct investment, a Thai government official said yesterday, along with China, South Korea and Singapore.

"The government is aiming for a 15 percent to 20 percent growth in Taiwanese investment next year since Thailand-based Taiwanese investments are increasing," said Supat Limpaporn, deputy secretary-general of Thailand's Board of Investment (BOI) as he received a 15-member business delegation from Taiwan.

As the third-largest foreign investor in the kingdom, next to Japan and the US, Taiwan has approximately US$170 billion in Thailand, with big brand-names such as Lite-On Technology Inc (光寶科技), Twinhead International Corp (倫飛電腦) and Tatung Co (大同) as well as over 140,000 Taiwanese living there.

After the 1997 Asian financial crisis, foreign investment helped the kingdom recover quickly, said BOI Secretary-General Somphong Wanapha.

The kingdom's estimated economic growth rate for this year is between 4.5 percent to 5.5 percent, compared to last year's 5.2 percent, he said.

Wanapha said Thailand wants to attract businesses from five targeted sectors: automotives, agro-industry such as food-processing, fashion, information-technology and electronics, as well as value-added services such as printing and publishing.

Compared to the investment environment in China -- where labor costs are on average 40 percent lower than those in Thailand, Wanapha said the kingdom's advantages include political stability, economic performance, social development and a business-friendly environment.

"After the China market, Thailand is an alternative destination for businesses to diversify their investments," Wanapha said.

Thailand has almost recovered from the 1997 financial crisis following its last loan repayments to the IMF, which came two years ahead of schedule, said Piyawat Niyomrerks, executive director of the Thailand Trade and Economic Office in Taipei.

He added that the kingdom's banking sector has also returned to health with an improving non-performing loan (NPL) ratio, more capital supply and less restrictions on lending to meet businesspeople's financial needs.

The NPL ratio in Thailand was 15.74 percent as of March.

Thailand-based businessmen, however, have a slightly different view, saying "financing, either local or from Taiwan, is still the major hurdle to doing business here" since there is just one Taiwanese bank with a branch in the kingdom, the International Commercial Bank of China (中國國際商銀).

"It's almost impossible to take out loans from Thai banks," said David Cheng (鄭登煙), supervisor of the Thai-Taiwan Business Association. He noted that banks in China encourage Taiwanese businesses operating there to borrow.

Huang Sheng-yung (黃盛涌), the president of the Thai-Taiwan Business Association, said new Taiwanese investments will not go to Thailand without financial assistance from Taiwan's government.

Other businessmen said there is much to praise about Thailand's investment environment, compared to China's.

"Doing business in China is cheaper, yet riskier," association vice president Teng Tzu-liang (鄧子亮) said yesterday, adding "business operators are treated as first-class citizens in Thailand."

The 1997 crisis did not pose much of a threat to export-oriented Taiwanese businesses in the kingdom, Huang said.

"Most Taiwanese exporters benefited from the crisis as a result of gains on the US dollar," he said.

Huang said Thailand is very suitable for small and medium-size businesses with a variety of products and is a very competitive manufacturing base for high-tech companies.

Taiwan has encouraged Thai-based Taiwanese businesses to remit earnings back home, but expatriate businessmen said there actually were few incentives for them to bring their cash home.