Vietnam - Thailand Boosting Investment, Trade Ties

The MOU was inked by Mr Ta Hoang Linh, Deputy Director of Vietrade, and Ms Supawan Teerarat, Director of TCEB, aiming to warm up the two-way commercial and investment relations. This activity is one of results of the official visit by Thai Prime Minister Abhisit Vejjajiva to the World Economic Forum on East Asia recently held in Ho Chi Minh City - the largest commercial hub of Vietnam.

 

According to the Thai Ministry of Commerce, the two-way economic cooperation is expanding. Bilateral trade relations are expected to reach US$10 billion this year from US$6.1 billion in 2009. Currently, the Thailand is holding 72 % of trade balance with Vietnam.

 

In the ASEAN region, Thailand is the third largest trade partner of Vietnam after Singapore and Malaysia. In 2010, GDP growth of Vietnam and Thailand is expected to reach 7 % and 6 %, respectively. According to Mr Ta Hoang Linh, in spite of numerous difficulties and challenges, the country raked in US$32 billion from exports in the first six months of 2010, completing 52.7 % of the full-year plan. Its nine key export items have exceeded US$1 billion thresholds.

At present, Thai investors have invested in many areas in Vietnam like industrial park infrastructure construction, new urban zone construction, tourism, hotel, heavy industry and light industry. They largely invested in industry and construction, with 108 projects worth US$800 million, accounting for over 61.4 % of projects and 51.5 % of registered investment capital, followed by the service sector with 36 projects worth US$567 million, accounting for 20 % of projects and 28 % of registered investment capital. Agriculture, forestry and fisheries fields take up 15.9 % of projects and 20.6 % of registered investment capital.

 

On the territory of Vietnam, Thai investors are present in 30 provinces and cities, led by southern Dong Nai province with 28 projects with a total registered investment capital of US$485 million, accounting for 17.9 % of projects and 28.7 % of registered investment capital, followed by the capital city of Hanoi with 24 projects worth US$366 million.

 

Thai investors chiefly accept the form of wholly foreign investment, with 120 projects worth US$939 million, followed by the form of joint venture with 40 projects and US$714 million. Some projects are in the form of business cooperation contract (BCC), build - operate - transfer (BOT), build - transfer - operate (BTO) and build - transfer (BT).

 

In general, Thailand’s investment projects are effectively operated in Vietnam and they help produce replacements to imports and boost exports of Vietnam.

 

In 2009, Thailand ranked eighth among foreign investors in Vietnam, a remarkable progress from the 12th position in 2006. According to the statistics from Thailand, as many as 25 leading Thai companies have invested in Vietnam.

 

Vietnamese enterprises have also invested US$305,200 in Thailand. Particularly, Cuu Long Trading and Transporting Co., Ltd and Inter Lube Trading Co., Ltd invested US$150,000 in a lubricant production project. EIS Information Technology Joint Stock Company injected US$155,200 to design and provide software in Thailand - a totally Vietnam invested project

Thailand’s increased investment into three ASEAN countries like Vietnam, Laos and Myanmar is obviously necessary in the context of the global economic slowdown and for mutual benefits. In Vietnam, Thai investors have long been involved in real estate sector. The Thai Government supports them with credits and facilitates them to work with travel, residence and other papers. Importantly, if a company registers with the Thai Investment Agency, it will enjoy many benefits. Vietnam, Thailand and other regional signed a memorandum of understanding on mutual facilitation in Mekong River region, aiming to facilitate transport, investment and industry. Indeed, there are many Vietnamese companies doing business in Thailand and vice versa.

 

Thailand and Vietnam have a very close relationship with a lot of similarities. Accelerating trade cooperation will bring in many benefits for both parties. The Thai economy is still really powerful and promising, with the GDP rising 12 % in the first quarter of 2010. We strongly believe that the trade promotion cooperation between the two sides will flourish in both Vietnam and Thailand.

 

Recent political tensions do not cause any impact to the exhibition industry in Thailand. Although some trade fairs are cancelled, international exhibitions as Intermach 2010 and Propak Asia 2010 have drawn many exhibitors. This is the best way to support the restoration of confidence in the exhibition industry in Thailand, and to demonstrate that Thailand is still a potential market and a host for major regional trade events. To regain the confidence in Thailand and to encourage Vietnamese tourists to Thailand, TCEB is offering the free third-night programme for Vietnamese and international tourists attending trade fairs in Thailand. The “Extra night, extra smile” campaign offers a free third night of accommodation to participants who stay at least two nights or longer at the same participating hotel. Other incentives include fast track and airport transfers, a complimentary Bangkok city tour by tram car, plus special discounts at leading department stores and entertainment outlets.

The Thai government wants to encourage its investors to increase foreign presence and it also wants to inform its investors of policies and supports in target destinations. The relationship between Thailand and Vietnam is increasingly good. All Thai people are impressed with the economic development of Vietnam and many Thai companies are directing their business to Vietnam.