Thailand: Chinese exodus to Thai sites begins

  • More Chinese manufacturers are looking to Thailand as a production base to avoid US tariffs, based on trends in demand for industrial estates here.
  • WHA Corporation, the top provider of such estates in Thailand, said it expects Chinese companies to account for as much as half of its land sale contracts both in 2019 and 2020, up from 12% in 2018. The firm also develops industrial parks in Vietnam.
  • “People are moving some production,” said David Nardone, the group executive for WHA’s industrial development unit. “It will be a significant impact for Thailand and Vietnam. A drop of water for China can be a flood for us because of the different size of the economies.”
  • Thailand has rolled out incentives including tax breaks to woo manufacturers seeking to skirt the tariffs the US and China have imposed on each other. Recent evidence suggests rival Vietnam has pulled ahead in the race to lure producers.
  • At the same time, the value of net foreign direct investment applications to Thailand from Chinese firms is surging. Value rose five-fold y/y in 1H19, Thailand Board of Investment data shows.

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