NationThailand- Nov 26
With rising wages, an ageing workforce, and skill mismatches, Thailand must act swiftly to reclaim its status as a top FDI hub in Southeast Asia Over the past decade, Thailand has been a primary destination for Japanese investment. Japan’s net foreign direct investment (FDI) in Thailand accounts for 22% of its total investment in Southeast Asia (second only to Singapore) and over 36% of Thailand’s total foreign investment. Japan began investing in Thailand in the 1960s, becoming one of the first foreign countries to establish a presence in Southeast Asia. At the time, Thailand attracted Japanese investment due to its high economic growth rate (averaging 5% annually), low labor costs, robust infrastructure, and political stability. However, rising geopolitical tensions, particularly the intensifying trade conflict between the US and China, have significantly impacted global trade and investment. However, Thailand is no longer the top destination for new Japanese investments in Southeast Asia. From 2021 to 2023, Vietnam overtook Thailand as the second-largest recipient of Japanese investments in the region after Singapore. Vietnam’s net investments from Japan surged by ¥260 billion (+54%), primarily in AI and semiconductor industries, which are considered megatrends. Meanwhile, Thailand’s net investments increased by only ¥80 billion (+13%), causing its ranking to drop to third in the region for Japanese investment. According to the latest 2023 survey by the Japan Bank for International Cooperation (JBIC), Japanese investors view Vietnam as having the most positive outlook for business opportunities over the next three years compared to other Southeast Asian countries. Read more at: https://www.nationthailand.com/business/economy/40043616
