The Thai government has announced a series of planned investments by Chinese companies, one of which includes a THB 500 million (€10m) project in a leading Thai cooking oil business.Thai industry minister Phinij Jarusombat said the company, China National Grain and Oil Group is aiming to produce soybean oil for re-export back to the China market and for sales in Thailand. The minister gave no details as to which specific business the Chinese company was interested to invest in.
At the same time the minister also announced a series of other trade projects with Thailand that are part of a recently announced trade agreement to expand trade between the two nations. The investments by Chinese companies included a project for television manufacturing as well as another investment by the China National Machinery & Equipment Import & Export Corportation, which has expressed interest in a project to invest in producing ethanol from cassava roots and sugarcane. The total investments are said to amount to THB 32 billion .The Chinese government has been attempting to cut its reliance on imports of edible oils in recent years, which are seen to be costly. As part of this initiative the government has been trying to encourage the domestic industry to expand production with a variety of financial incentives. However, worried that domestic producers will not be able to keep up with demand, the government is also encouraging joint venture projects in the region. The one in Thailand is expected to be the first of these initiatives.
In recent years China has been negotiating with ASEAN in attempt to increase the volume of it trade within the region. China is particularly keen to source a range of foodstuffs in an attempt to help meet rapidly rising demands created by its still growing 1.3 billion population.
In June last year Thailand and China signed a bi-lateral trade agreement to reduce to the tariffs on a range of 200 fresh fruit and vegetables that allowed tax to be dropped from 30 per cent to zero.
Through government initiatives Thai vegetable and fruit producers have been pushing the exportation of their products throughout the region. Only last month the Thai and Australian governments signed an agreement that would promote greater trade between the two governments. As part of the agreement the Thai government secured better prospects for the export of fruit and vegetables to Australia.