Japanese investors target Thailand

“The Japanese government does not intend to call investors back home. Japanese live in and are committed to Asia and the world economy. The country will continue to play a major role in the world economy by continuing to invest overseas,” said Mr. Munenori Yamada, the Japan External Trade Organisation’s Bangkok president.

As one of the world’s largest investors and the biggest foreign investor in Thailand, the Japanese government has no policy to rein in overseas investment, Mr. Yamada said. Industries of high interest are in the high-technology sectors such as hybrid cars, solar-cell systems for manufacturing plants, housing, highway construction, and product design and innovation, he said.

Overseas investment is important as Japan’s economy is recoiling due to the increasing proportion of its population aged 65 or older. Meanwhile, the younger generations are consuming less, Mr. Yamada said. While domestic production can serve the domestic market, Japanese companies will pursue overseas investment to ensure business growth, he said.

The changing population structure has led to a drop in imports in Japan, formerly the world’s largest exporter and importer, while exports from Japan have also dropped dramatically in the past 10 years due to overseas expansion and the shrinkage of the domestic economy. As such, while others are downsizing investment, the Japanese are ready to invest as soon as the economy begins recovering, Yamada said.

“Nobody knows when the economy will recover. I believe it will come very soon, and that Japanese investors will promptly resume investment in foreign countries,” he said.

Mr. Yamada said Japanese investors see Thailand as one of the best destinations for new investments, but expressed concern over the Kingdom’s political stability.

The Japanese business community sees Thailand as attractive thanks to strong work ethic and developed infrastructure in terms of roads, ports and power supply, as well as its attractive housing options, food and climate, he said.

While admitting that China is a major rival for Japanese investment, Yamada said Thailand’s favorable business fundamentals and integration within ASEAN are strong draws. He said Thailand could be used as a manufacturing base for Japanese factories and as a gateway for exports to ASEAN and other countries.

Nevertheless, posing strong competition for Thailand is Vietnam, which is very active in attracting investors, he said. This new competition comes as Thailand’s politics grow increasingly shaky, which could lead to inconsistent policies, he said.

Mr. Yamada said political instability had set Thailand back three years due to delayed investment decisions, particularly along the Southern Seaboard, as well as in mega-projects, innovation development and tackling traffic congestion.