China moves to invest more in key Thai sectors

A NEW wave of the Chinese bringing in trillions of baht to invest in the Thai property, universities and hospitals has been monitored as to what repercussions that could be in the long run as some other countries, like Malaysia and New Zealand, have come out to limit the Chinese investment.

Chinese investors have scooped up homes, condos, apartments and shophouses from Auckland to Sydney and to Bangkok. This has caused government in many countries trying to control such influx, the latest moves being made in New Zealand and Malaysia.

New Zealand’s government has just announced a plan to ban foreigners from buying homes to cool its red-hot housing market.

In Malaysia, its Prime Minister Mahathir Mohamad, said in August he wanted to prevent foreigners from buying residential units in the US$100 billion Forest City project, a setback for the Chinese developer as it tries to revive faltering demand for the site, according to SCMP.

Thai capital

“One thing is certain, that city that is going to be built cannot be sold to foreigners. We are not going to give visas for people to come and live here. Our objection is because it was built for foreigners, not built for Malaysians. Most Malaysians are unable to buy those flats,” he told a press conference.

Country Garden Holdings Co Ltd is to build the city for 700,000 people in the state of Johor bordering Singapore. Chinese buyers account for about two-thirds of the owners of Forest City units sold so far, with 20 per cent from Malaysia and the rest from 22 other countries, including Indonesia, Vietnam and South Korea.

Where Thailand is concerned, Prasert Taedullayasatit of Pruksa Real Estate Premium, said there is a drastic change in the property development scene in Thailand as recently massive foreign funds have been moved to set up 34 joint venture property firms in Thailand to invest in condos, townhouses, houses, with projects being worth 618,000 million baht. Of these 19 are companies from China and Hong Kong investing over 334,000 million baht.

Another real estate source said the main clients for these properties are Chinese as according to statistics the Chinese seeking visa to work in Thailand has increased by around 18% per year.

They can buy up to 49% of condo units, according to the Thai law.  “Now they are buying the properties in the Rachada, Sukhumvit and Rama 9 areas.  They now invest in buildings which are unable to find clients in the Bangna area with the latest deal being 30-story Thaizhong Tower on the Bangna-Trad highway.”

The Chinese are also buying more hotels especially in the Phuket and Pattaya areas.

The source said China’s Chongtian Construction Group has joined with JSP Co to invest 15,000 million baht to develop an entertainment complex in Bang Saray, Chon Buri, while BCEG and Country Group are investing 10,000 million baht to develop a hotel and condo in Bangkok, to name but a few.

The Chinese have been in a process to take over Krirk University to accommodate more Chinese students, according to Prachachat online. More deals are also under way for the Chinese to buy into not only universities but also hospitals.

“They are looking for medium-sized hospitals which are not listed on the Thai stock markets as the deals would be made easier.”

Chinese investors are heading towards countries which are in the route of the so-called One Belt, One Road where in this region Thailand, Malaysia and Myanmar are included.

Chinese investors are heading the Asia-Pacific way because their plans to invest more in the US have been made difficult by US President Donald Trump’s policy.

And that’s one of the reasons why for the first time since 2014, Japan’s outbound mergers and acquisitions (M&A) value, at $146 billion as of September 26, exceeded that of China’s, as deal making remains challenged in the world’s No.2 economy due to a tougher regulatory environment, funding constraints and yuan depreciation amid an ongoing Sino-US trade war, according to Reuters.

Japan M&A volumes are set to break a 19-year-old record and steal the spotlight in Asia this year from cooling Chinese deals, led by blockbuster takeovers such as Takeda Pharma’s $62 billion swoop on British drugmaker Shire.

Japanese firms were involved in a record $289.7 billion of deals in the first nine months of 2018, more than doubling from the same period last year and exceeding the previous all-time high of 1999.


Top: Stunningly beautiful view of Bangkok. Photo: Mighty Travels (CC-BY-2.0)

In-text:  Bangkok in the evening. Photo: Swaminathan (CC-BY-2.0)

By Kowit Sanandang