Thailand plans 'relocation package' to draw foreign investment amid trade war

Thailand's economy grew at its weakest pace in nearly five years in the second quarter on declining exports and soft investment.
Thailand's economy grew at its weakest pace in nearly five years in the second quarter on declining exports and soft investment.PHOTO: AFP

BANGKOK (REUTERS) - Thailand is planning a "relocation package" to attract foreign companies which are looking to move factories because of global trade tensions, officials said on Thursday (Aug 22), as the government tries to boost a slowing economy.

South-east Asia's second-largest economy grew at its weakest pace in nearly five years in the second quarter on declining exports and soft investment.

The package - to be discussed by economic ministers on Aug 30 - will target investors from China, Japan, South Korea, Taiwan and the United States, Deputy Prime Minister Somkid Jatusripitak told a news briefing.

"It will be a package involving all agencies in order to facilitate investors' production relocation," he said.

He did not give further details, but the government usually promotes investment with tax incentives.

Thailand is already attracting some foreign firms which are looking to relocate production from mainland China to escape escalating US tariffs on Chinese goods.

The investment promotion agency is aiming to attract 100 companies, mostly Chinese firms, to invest in Thailand, said Ms Duangjai Asawachintachit, head of the Board of Investment (BOI).

The package is expected to help the BOI achieve its target of 750 billion baht (S$33.8 billion) in overall investment pledges this year, she said.

In the first half of 2019, the total value of foreign investment applications more than doubled to 147 billion baht from a year earlier, led by Japan and China.