Reuters :
When trade war tariffs jolted Chinese tyre-maker Prinx Chengshan into speeding up foreign investment plans, the company wound up in Thailand, thanks to that country’s relentless courtship.
With an initial investment of $300 million, the company is now racing to build a factory to export tyres to the United States next year, based in a Thai industrial zone reinvigorated by the trade war.
Multiple visits to China by Thailand’s Board of Investment helped. So did two personal meetings with Thailand’s top economic policymaker, said Ju Xunning, a company manager.
“This impressed our company, and this is also one of the main reasons for choosing Thailand,” Ju told Reuters. “It’s apparent that the government values doing business with us.”
With global economic growth flagging, in part because of US President Donald Trump’s trade war with China, competition is growing among Asian countries to win investment from companies moving supply chains to escape higher tariffs.
Tax breaks, promises to slash red tape and trade missions are all on the table.
“Companies have thrown in the towel on the status quo,” said Rajiv Biswas, Asia Pacific chief economist for IHS Markit.
Vietnam has benefited most from the shifts in terms of the number of companies moving business, according to independent surveys. But other Asian countries are eager to bring in more business as well, including India and Indonesia.
The trade war has breathed new life into Thailand’s Eastern Economic Corridor (EEC), where Prinx Chengshan is building its factory. The programme was set up under the former military junta to boost growth that has for years lagged regional peers.
Pledged investment for the zone rose nearly four-fold year-on-year to 88 billion baht ($2.9 billion) in the first half of 2019. One of the main drivers was investment from companies trying to escape tariffs.
Thailand’s biggest industrial estate developer WHA, which has nine developments in the area, said Chinese companies account for 43 percent of its land sales, up from less than 3 percent before the trade war.
Thailand this month offered a new range of “relocation incentives” – including a five-year 50% corporate tax cut – while Malaysia set up an investment board to encourage relocations.
“If approvals took three months earlier, now it would take a month,” Ong said. “The trend we see is that many of these strategic investments are reacting to the US-China conflict.”
Foreign direct investment to Malaysia nearly doubled to $12 billion in the first half of 2019, and Ong said he hoped it would accelerate further.
The apparel sector in Bangladesh has seen impressive growth over the years accounting for more than 80 percent of the total exports earnings of the country.
When trade war tariffs jolted Chinese tyre-maker Prinx Chengshan into speeding up foreign investment plans, the company wound up in Thailand, thanks to that country’s relentless courtship.
With an initial investment of $300 million, the company is now racing to build a factory to export tyres to the United States next year, based in a Thai industrial zone reinvigorated by the trade war.
Multiple visits to China by Thailand’s Board of Investment helped. So did two personal meetings with Thailand’s top economic policymaker, said Ju Xunning, a company manager.
“This impressed our company, and this is also one of the main reasons for choosing Thailand,” Ju told Reuters. “It’s apparent that the government values doing business with us.”
With global economic growth flagging, in part because of US President Donald Trump’s trade war with China, competition is growing among Asian countries to win investment from companies moving supply chains to escape higher tariffs.
Tax breaks, promises to slash red tape and trade missions are all on the table.
“Companies have thrown in the towel on the status quo,” said Rajiv Biswas, Asia Pacific chief economist for IHS Markit.
Vietnam has benefited most from the shifts in terms of the number of companies moving business, according to independent surveys. But other Asian countries are eager to bring in more business as well, including India and Indonesia.
The trade war has breathed new life into Thailand’s Eastern Economic Corridor (EEC), where Prinx Chengshan is building its factory. The programme was set up under the former military junta to boost growth that has for years lagged regional peers.
Pledged investment for the zone rose nearly four-fold year-on-year to 88 billion baht ($2.9 billion) in the first half of 2019. One of the main drivers was investment from companies trying to escape tariffs.
Thailand’s biggest industrial estate developer WHA, which has nine developments in the area, said Chinese companies account for 43 percent of its land sales, up from less than 3 percent before the trade war.
Thailand this month offered a new range of “relocation incentives” – including a five-year 50% corporate tax cut – while Malaysia set up an investment board to encourage relocations.
“If approvals took three months earlier, now it would take a month,” Ong said. “The trend we see is that many of these strategic investments are reacting to the US-China conflict.”
Foreign direct investment to Malaysia nearly doubled to $12 billion in the first half of 2019, and Ong said he hoped it would accelerate further.
The apparel sector in Bangladesh has seen impressive growth over the years accounting for more than 80 percent of the total exports earnings of the country.
