By Wang Fang
The event that the draft of Foreign Investment Law has become a hot topic of this year’s Two Sessions. The new law is an innovation in the legal system on foreign investment and serves as the basic law on foreign investment as China continues to open up in the new era. Thai enterprises were among the first foreign companies to enter into China after the introduction of the reform and opening-up policy. Recently, China Report ASEAN conducted an exclusive interview with Vithit Powattanasuk, Consul-General of Royal Thai Consulate General in Chengdu.
China Report ASEAN: Could you introduce the development situation of Thai enterprises in China?
Vithit Powattanasuk: China is regarded as an attractive market for Thai investors and businessmen to explore possibilities of making investment and expanding business. The Thai businessmen have invested in several provinces in China, not only to the North but the South, the West as well as the East. As Consul General of Royal Thai Consulate General in Chengdu, I am taking charge of related affairs in Sichuan Province and Chongqing Municipality in western China. Thus, I may not elaborate on the other areas but the southwest of China that many Thai investors had paid the high attention since past till present.
At the moment, I have witnessed that several Thai companies still enter into Sichuan and Chongqing so as to make direct and joint investment as well as setting up new businesses. To name a few of Thai success stories in these regions, CP Group ( Charoen Pokphand Group) which has already been in Sichuan for forty years since China began reform and opening-up. It set up a factory for animal feed products in Chengdu, capital of Sichuan, as well as in another city of China. The range of CP Group’s business not only cover animal feed products but also tea, wine as well as hypermarket under the name “ Lotus”. It can be said that CP Group is the flagship company of Thailand that makes Chinese people know Thailand.
The second company is ECI- Metro company. This company is the sole agent of the Caterpilla construction machine and set up a branch in Chengdu in 1985. With 1,200 Chinese employees, this Thai company has contributed a great deal to the local people’s well being.
The third is Kasikorn Bank which provides all financial services for investors in both countries. It opened a branch office in Chengdu in 2018. Kasikorn Bank, as a bridge, facilitates the cooperation on trade and investment between southwestern China and Thailand, and even the rest of Southeast Asia.
Thus, I would reiterate that Chinese market is still very attractive for Thai investors. They perceive that China is a big opportunity for them to come to explore. I would foresee that this situation will still last long because the Chinese economy is still growing, though at a slower pace than the past years.
China Report ASEAN: According to your understanding, what do Thai entrepreneurs say to China’s business climate?
Vithit Powattanasuk : As I mentioned previously, the Thai businessmen still perceive that China has great opportunities for investment and doing business. They feel China is a big market where they can do good business and earn some profits back to Thailand. However, to do business in China, some Thai businessmen also find difficulties, or may say challenges, in entering into this market.
Firstly, Thai businessmen confront with difficulties in Chinese language. Though many Thai people nowadays are able to speak Chinese, very few can read Chinese fluently, especially when it comes to the area of the Chinese commercial law and the Chinese commercial contract. They also need more skills to comprehend the nature of the Chinese law.
Secondly, the business and investment practices in China are other challenges that Thai businessmen and investors have to confront in different provinces in China. This challenges will be resolved once Thai businessmen and investors begin to realize the nature of doing business here.
China Report ASEAN: As a diplomatic officer, what do you think of the investment environment in China? What has changed on China’s business climate in these years with your observation?
Vithit Powattanasuk: Frankly speaking, I have just been in China for only three years. Thus, It’s difficult for me to understand China comprehensively. Simple rationale is that every province in China has its own characteristics. It will be wrong if I try to look at every province in China in the same manner.
Regarding investment, what I can say is that, if I’m going to return to Thailand and say something about investment environment in China, I would say to Thai businessmen that “Please do come to China.” This is a big opportunity for them. This is something that they should not miss in this period of time when China’s economy is still growing, no matter at a slow or fast pace. Thailand can share with China common profit and prosperity. One thing very important for Thailand is that China is our good friend and good neighbor. And by the land and air connectivity especially in Sichuan and Chongqing, the R3A plus road, the heavy air link and the near future high speed train link will eventually make people of the two sides do more activities together.
China Report ASEAN: Which part of China’s Foreign Investment Law do you pay close attention to? Comparing with the law on Foreign-funded Enterprises, what improvements were made on this new law in your opinion?
Vithit Powattanasuk: For Thailand, I welcome the coming China’s Foreign Investment Law which was submitted to the National People’s Congress on December 23, 2018 for consideration of concerned Chinese authorities. I hope that by this month, the National People’s Congress will adopt this new law and bring it to effect on the soonest day.
This law will follow President Xi Jinping’s opening-up policy that tries to provide more advantages to foreign enterprises to come to invest in China and provide more protection for the enterprises’ copyright and trademarks. It can be regarded as a very big leap forward for China in increasing confidence to foreign investors. I would assert that in Sichuan and Chongqing this new law will enhance the confidence of Thai businessmen and investors to make their decision to invest in this southwestern region of China.
China Report ASEAN: How do you evaluate the significance of Foreign Investment Law? What are your expectations on the law?
Vithit Powattanasuk: I believe that the Foreign Investment Law is very important. This new law will definitely be a big step for China’s commitment to the world economic communities. It will be a very good encouragement for foreign enterprises to invest in China. It will bring more benefits not only to the foreign investors, but also to China to gain trust from the world communities.