The Kingdom stands to benefit greatly from China’s bold ambitions, which pave the way to interconnection and vast markets
China’s Communist Party held its 19th National Congress in October, charting the development course of the world’s second-largest economy over the next five years. In his address to the assembly, President Xi Jinping said, “China will secure a decisive victory in building a moderately prosperous society in all respects and strive for the great success of socialism with Chinese characteristics for a new era.”
The message was clear and bold, but what does it mean for Thailand? First, China will remain the world’s main engine for economic growth, averaging around 6 per cent of GDP growth over the next several years. Thailand will benefit from China’s long-term economic stability in terms of both trade and investment expansion. China will also open its vast domestic market of 1.3 billion consumers wider, a key asset for Thailand and other trading partners.
Second, China will continue to take the lead on the Belt and Road development programme, in which more than 50 countries in Asia, Europe and Africa, including Thailand, have been invited to
participate. Besides the multiple infrastructure mega-projects spanning the borders of participating countries, China will shortly organise a Belt and Road exposition at which Thailand and other member-countries are invited to sell their goods and services to Chinese consumers.
Regarding the Thai-Chinese high-speed railway, construction of the first section from Bangkok to Nakhon Ratchasima was recently kicked off at a ceremony chaired by Prime Minister Prayut Chan-o-cha. This rail transport project will link Thailand with Laos and southern China, where four special economic zones will be set up to connect Thailand’s Northeast to the two neighbouring countries.
This will also lead to other development projects along the high-speed rail route terminating at Nong Khai, where the system will be connected with another high-speed train system crossing Laos, on which construction is already underway. Later, the southern region and the rest of China will be connected by rail with Laos and Thailand, which is situated at the centre of mainland Southeast Asia.
Given this geographical edge, Thailand can further boost its potential and take advantage of the so-called “Asian Century”, in which global economic growth has been mainly driven by economies in Asia, especially that of China. China’s 2016 GDP was US$11.2 trillion, second only to that of the United States, the world’s largest economy, at $18.5 trillion.
In addition, both China and Thailand are facing the challenges of middle-income countries, with China focusing on innovation as its key strategy to avoid the “middle-income economic trap” and to upgrade its international competitiveness.
In this context, the private sectors of both China and Thailand have joined forces to expand the digital economy as well as enhancing cross-border cooperation in e-commerce and e-payment, as evidenced by the presence of Alibaba and JD.com in Thailand.
Alibaba, the world’s largest
e-commerce platform in terms of sales revenues, has explored business opportunities in e-commerce and logistics in Thailand, while JD.com has entered into a joint venture with the Central group for both online and offline retail businesses.