ASEAN is an engrossing investment destination for many foreign investors, thanks to AFTA/AEC trade pacts and other FTA pacts between ASEAN and other countries, such as China, Japan, South Korea, India, Australia and New Zealand. Establishing production bases in Thailand and other ASEAN countries allows manufacturers to use raw materials in the region that are eligible for tariff cuts and their exports to ASEAN and other FTA partners offer a number privileges as well.
In addition, the currently appreciating Yen and Yuan will accelerate Japanese and Chinese investments at home and abroad. ASEAN is a major production base for Japan, whereas Japan spends largest investments here. Meanwhile, China is developing many routes into Indochina to support their logistic systems and investments in Thailand. Also, better routes will help facilitate their exports (from production bases in ASEAN) to Southern China. Therefore, Chinese investments in Thailand and ASEAN will likely increase.
However, there are factors that may pressure the investment climate in Thailand over the remainder of this year, including the solution to the Map Ta Phut problems, as well as some domestic political uncertainty before the elections in 2011 that may affect the confidence of foreign investors here.