(Photo: Chief Executive Carrie Lam meets Thai Prime Minister Prayut Chan-o-cha in her recent visit to Thailand in August. Government image.)
The recent official visit to Thailand of Hong Kong SAR Chief Executive Carrie Lam and warm welcome by the prime minister of Thailand, Prayuth Chan-ocha, could mean a new chapter of closer economic collaboration between the two governments.
Thailand, a member of Southeast Asian countries (SEA), is one of Hong Kong’s major trade partners and vice versa. As the second largest economy in the 10-nation ASEAN following Indonesia, Thailand was Hong Kong’s 11th largest export market and the 9th largest import source in the first seven months of 2017. Hong Kong’s cumulative FDI in Thailand reached US$10.9 billion in 2016, making it the 5th largest FDI contributor.
While Hong Kong has been focusing on the mainland market over the past decade, Singapore has already seized the opportunities to conclude free trade agreements (FTAs) with all the major countries in Southeast Asia. Having said that, it seems Hong Kong has realized such lost opportunities and has taken a major catch-up step in signing the ASEAN Hong Kong China Free Trade Agreement (AHKCFTA) with the Association of Southeast Asian Nations (ASEAN) in November after three years since the talks first initiated. This sends a clear message that the Hong Kong government are getting serious about the importance of this region.
With China’s Belt and Road mega-initiative to open trade routes and build infrastructure from Asia to Europe and to Africa, the Hong Kong SAR government should collaborate with Thailand more than ever. Over the past few years, the Thai government has accelerated the implementation of national reform, including the “Thailand 4.0” policy in stabilising the country, modernising the economy and accelerating economic growth. Ten industries focusing on innovations are expected to be the new growth engines to help create a smart and digital economy, including next-generation automotive, smart electronics, biotechnology, robotics, biofuels, digital, medical and healthcare, and high-income and medical tourism. Aside from improving national broadband network, building SME digital parks, and nurturing innovative start-ups, the government is developing the Eastern Economic Corridor (EEC), which spans the three provinces of Chonburi, Rayong and Chachoengsao. The EEC is designated for developing high-tech industry clusters and becoming a hub for industrial, infrastructure and urban development in ASEAN. The Thai government expects the EEC to draw in 1.5 trillion baht (US$43 billion) worth of investment in infrastructure and industrial projects. ECC would link up with China’s Belt and Road Initiative, as part of a push to encourage economic growth and could be beneficial for China and the rest of Southeast Asia.
Recently, there have been some positive signs from both governments in working together. Following Thai prime minister’s proposal to open Hong Kong’s economic and trade office (ETO) in Thailand during her recent official Thailand visit, Lam already announced the establishment of the new ETO in Bangkok, which is the third of its kind in ASEAN after Singapore and Jakarta. Choosing Thailand for this purpose is indeed a smart choice as it has a substantial advantage over other countries due to the fact that it is a major trade and financial hub in the heartland of Southeast Asia that connects Cambodia, Laos, Myanmar, Vietnam and Thailand (CLMVT), a thriving market of 230 million people. In turn, Thailand’s immigration chief recently revealed that both immigration offices are exploring the possibility that visitors from Hong Kong would be eligible to use automatic passport scanners to enter Bangkok – a privilege Thai citizens have enjoyed for some time. If both immigration offices could agree in details, the processing time per would be reduced from one minute to as little as 20 seconds and the long queues would soon be a thing of the past for travelers from Hong Kong.
A closer economic collaboration between Hong Kong and Thailand could mean a big win-win for both parties. For Thailand, Hong Kong could be a gateway to a market with massive potential like Guangdong, Hong Kong, Macau Bay area and Southern China. And for Hong Kong, Thailand could potentially accelerate the Belt and Road and open the door to Mekong Delta and Southeast Asia especially CLMVT. After all, in the face of protectionist sentiments in other parts of the world, Hong Kong could continue setting a good example for freer and more open trade in this thriving region.
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Mr Krutkrongchai is Director of Hong Kong – Thailand Business Council and Head of Business Strategy, AIA International Limited. He is also a Diversity List candidate.