By Wang Jiping
All over the world, “Chinatowns” are places of both community and economic opportunity for overseas Chinese. However, there is a special “Chinatown”, dubbed “industrial Chinatown” in Thailand — the Thai-Chinese Rayong Industrial Zone.
The industrial zone, located 114 kilometers away from Bangkok and 27 kilometers away from the deep-water port at Laem Chabang, has developed not only into a community where Chinese live and work, but also an important platform for the promotion of Sino-Thai business cooperation within the framework of the Belt and Road Initiative, as well as a platform to help Chinese enterprises, especially private ones, in foreign investment and overseas cooperation.
With a planned area of 12 square kilometers, the site consists of an industrial area, a bonded area, a logistics and storage area and a residential area. It was developed by and is operated by China’s Holley Group, an important company in Belt and Road construction based in eastern China’s Zhejiang Province.
As one of the first firms in Zhejiang that invested in foreign countries, Holley first began engaging in international trade in 1987. After 30 years of exploration and practice, it has developed a “going global” strategy featuring intensive foreign trade and direct investment in key countries. Holley has set up branches and offices in more than 30 countries all over the world and established manufacturing bases in countries like India, Thailand, Uzbekistan and Russia. The group has greatly benefitted from its global operations.
Following the proposal and initial implementation of the Belt and Road Initiative, Holley Board Chairman Wang Licheng said he now has a new understanding of “going global”. Wang believes that more and more Chinese companies will go abroad in the future, and the implementation of the Initiative will offer them good opportunity to expand globally.
However, for Chinese firms, “going global” is not a simple task. Wang recalls a multitude of difficulties in Holley’s first few years of expansion outside China. Holley founded an ammeter factory on the outskirts of Bangkok in 2000 as its first attempt at foreign direct investment, which was also the first of its kind funded by a Chinese company abroad. Fewer than 200 workers were employed on the assembly line in a dilapidated building with an area of 1,000 square meters. This experience led Wang to realize that investing in foreign countries requires a suitable platform on which overseas Chinese enterprises could combine their advantages to improve their projects. Therefore, Wang came up with the idea of building an overseas industrial cluster for Chinese firms abroad.
“I learned from my experience that ‘going global’ doesn’t simply mean selling products, planning construction or mergers and acquisitions,” Wang explained. “In fact, it requires a systematic project that involves political, economic and cultural aspects. For example, we have to know how to use effective public diplomacy to facilitate risk management and market development. But in reality, due to their lack of knowledge of culture, laws and regulations in target countries, many Chinese companies, private ones in particular, either missed their opportunity to ‘go global’, or suffered losses and lost confidence in foreign investment, which is a pity. For companies that aspire to achieve global operations, it is of great significance to participate in international competition by introducing products to overseas markets first and then enhancing their physical presence in specific countries.”
After Wang decided to build an overseas industrial park, the next question he faced was the choice of its location. Considering his personal experience and national policies, he decided that Thailand was most suitable.
In March 2006, construction work of the Thai-Chinese Rayong Industrial Zone, also the first Chinese overseas industrial site in Thailand, officially began. After years of development, this industrial park is now home to nearly 90 Chinese-invested firms, mostly operating in manufacturing. It has attracted a total of over US$2.5 billion in Chinese investment in Thailand, and achieved a cumulative industrial value of US$8 billion.