Chinese investors making good in Chiang Mai

[webfact]

Chinese investors making good in Chiang Mai

By JINTANA PANYAARVUDH 
THE NATION 
CHIANG MAI

 

Chinese tourists enjoy taking photos at Ang Kaew reservoir, a tourist attraction at Chiang Mai University. /Photo By Parinya Chawsamun

 

Though foreign money boosts economies, local businesses are concerned about losing opportunities and foreigners not following regulations

 

THE CHARM and beauty of Chiang Mai, the capital of northern Thailand, has made the province not only a must-see destination but also a golden nest for foreign investors – especially Chinese seeking business opportunities.

 

Take Chinese entrepreneurs like Cherry and Zong Dan, for example. Having fallen for Chiang Mai’s charms, they opted to start their first overseas business in the province. 

 

Zong Dan (left)

 

Cherry, a 35-year-old entrepreneur from Chengdu, decided to invest in a guesthouse in Chiang Mai’s Muang district a few months ago, after finding her previous job as a writer on property issues was no longer satisfying.

 

She chose Chiang Mai after the city left a deep impression on her when she first visited five years ago.

 

“Chiang Mai is not far from my hometown, has nice weather, and the people are warm and friendly,” Cherry said.

 

She rented an eight-room guesthouse on Sirimangkalajarn Road, and partnered with the owner of the building, since Thai laws do not allow her to fully own a business here.

 

Cherry is currently staying in Thailand on a 60-day tourist visa while she applies for a work permit. It’s a complicated process and expensive, she admits; she even had to return briefly to China to retrieve some required documents.

 

As a Chinese national, Cherry knows her compatriots prefer to stay in a hotel where staff speak their language, and so she hired Thai staff who can speak some Mandarin. 

 

Her guesthouse boasts many return customers. To boost her sales, she turned to the largest online travel agency in China, Ctrip. 

 

Cherry’s initial investment was around Bt1.5 million and she expects to make it back in the next two years despite strong competition from an abundance of tourist accommodation in Chiang Mai these days. 

 

Asked her advice for other Chinese entrepreneurs considering investing in Thailand, Cherry said people could invest in property to live in or rent out – but she wouldn’t advise anyone to run a guesthouse as she does. 

 

Cherry thinks the number of Chinese tourists coming to Thailand will continue to rise because prices are low and a high-speed train will soon be connecting the two countries. 

 

Asked about anti-Chinese investment sentiment in Thailand, Cherry said, “I hired four Thai staff. They now have jobs and can help to grow the Thai economy.”

 

'Miss Liangpi'

 

Zong Dan moved from Saraburi, where she was a Chinese volunteer teacher two years ago, to Chiang Mai because she likes the city.

 

She then became the co-owner of the famous Chinese food shop Miss Liangpi in a soi on Nimmanhaemin Road after seeing a business opportunity there. At the time, there were only a couple of Chinese food shops in the city.

 

With the aim of serving Chinese food to their tourist compatriots, Zong and her husband, whose hometown is in Xi’an in Shaanxi province, decided to open a small shop to sell the signature dish of Xi’an – Liang pi, or cold-skin noodles. 

 

Like Cherry, Zong at first found it difficult to set up the business, including identifying the best location for her shop and then registering her business, which took around three months. Zong, who runs the shop with a Thai partner, now has a work permit in hand.

 

Her shop was ranked one of the most popular in 2017 by a Chinese review website and now boasts Chinese, Western and Thai customers.

 

Sales this year, however, have not been as good as last year, Zong says, but the business still makes a healthy profit. Their plan is to run the shop for four or five years and then take stock before deciding their next move.

 

 

Research study

 

The cases of Cherry and Zong match initial findings in an ongoing research project being conducted by academics in the Faculty of Mass Communication, Chiang Mai University. 

 

Supported by the Thailand Research Fund, the “Chinese Investment and its Impact to Tourism Security of Northern Thailand” study spoke to 200 Chinese visitors about their interest in investing in Chiang Mai. They aim to interview another 200 Chinese visitors.

 

Some 35 per cent said they could invest in Chiang Mai within three to five years, while around 44 per cent said they won’t. 

 

The top three motivating factors drawing them to invest in the province were the beautiful landscape and diversity of the city, the variety of tourist attractions and growth potential, Sunanta Yamthap, a researcher in the group, said.

 

The researchers also interviewed Thai entrepreneurs and workers who were affected by Chinese investment. 

 

They found that Thai small-scale businesses such as elephant camps or spa and massage facilities are now facing fierce competition and dropping revenues. 

 

An owner of the Maesa Elephant Camp in Mae Rim District told the researchers that Asian tourists love watching elephant shows, so Chinese investors had rented or bought an elephant or two and claimed to be operating an elephant camp that they sold as an attraction to Chinese tour agents. 

 

The Thai elephant-camp owner was sceptical that the Chinese operators were following the regulations required for animal welfare. 

 

Spas and massage businesses are also very popular among tourists these days, and so Chinese tour agencies will often include a particular shop in their tour programmes. Masseurs then flock to that shop to guarantee they earn money, researchers said. 

 

In the property sector, Chinese investors have rented resorts or properties from Thais on one- or two-year contracts. Some have even taken over the properties and opened them for Chinese tourists to stay there, said Thamnoon Tunchuleeporn, general manager at Brique Hotel in Muang District.

 

 

Thamnoon Tunchuleeporn

 

He expressed concerns about whether the Chinese operators could legally run such accommodations, and whether tourists’ safety was being placed at risk.

 

Last year, Ctrip sent its hotel management group Lvyue to run three hotels in Thailand, including one in Chiang Mai, and has set a target to open 80 more hotels in Thailand. 

 

‘Going out’ policy

 

Last year, Chinese topped the list of foreign tourists to Thailand, reaching almost 9.8 million visitors and spending around Bt524.4 billion. Authorities expected the number of arrivals this year to reach 12 million. 

 

Chinese were also the only nationality to increase their numbers in Chiang Mai from 2014 to 2016 – with an almost 43 per cent increase – while other nationalities decreased, according to the Intelligence Centre of Tourism Authority of Thailand (TAT). 

 

“When the market grows, demand grows, as does investment. Chinese people feel happier talking with Chinese speakers,” a TAT official who asked not to be named said.

 

Chinese people are investing in every country in the world, noted Yos Santasombat, a professor of Anthropology at Chiang Mai University. China’s official “going out” policy is spurring investment, and not just in Thailand, he said.

 

Yos Santasombat

 

“They are coming to explore the possibility of investment. If there is a better situation or a better deal or a better chance elsewhere they will go there,” said the professor, who has conducted several studies into Chinese capitalism and the impact of China in the Mekong region.

 

When the Laos government barred foreigners from leasing land or investing in agriculture recently, more Chinese investors began exploring opportunities next door, in Thailand, Myanmar and Cambodia. 

 

“In terms of tourism and agricultural investment, Chiang Mai and Thailand have potential – and that’s why many Chinese investors come here,” Yos said. 

 

Since we cannot avoid their investment, the professor suggested that Thais learn from the Chinese and adapt, instead of feeling resentful or anxious about Chinese people doing business in Thailand. Otherwise, he said, we might be left behind. 

 

The Chinese “are very active, diligent and work very hard, so you need to create a new value in Thai society so that people work as hard as the Chinese”, he said. 

 

Despite the trade war between China and United States, Yos said Chinese investment in Southeast Asia, which is now of small and medium scale, would continue and increase because there is a lot of pressure inside China. 

 

Doing business in China might not be as good as it used to be, although the trade war will affect large-scale investment, he said. 

But Yos also sounded a note of warning about unregulated foreign investment. 

 

“The point is, how can we find measures to curb [small scale] investors, because they tend to invest in uncontrolled locations or where official oversight is inefficient,” he said.

 

Source: http://www.nationmultimedia.com/detail/business/30353559

 

-- © Copyright The Nation 2018-09-03

[davehowden]

" When the Laos government barred foreigners from leasing land or investing in agriculture recently, more Chinese investors began exploring opportunities next door, in Thailand, Myanmar and Cambodia.  "

 

Sounds like Laos is the place to be if you want to get away from the Chinese then!

[Arkady]

3 hours ago, davehowden said:

" When the Laos government barred foreigners from leasing land or investing in agriculture recently, more Chinese investors began exploring opportunities next door, in Thailand, Myanmar and Cambodia.  "

 

Sounds like Laos is the place to be if you want to get away from the Chinese then!

The Chinese and their state owned enterprises are already pervasive in Laos, despite this setback.

[blazes]

Just when you thought it couldn't get worse in Chiang Mai.....

[alant]

5 hours ago, webfact said:

and a high-speed train will soon be connecting the two countries.

not via Chiang Mai though

[Media1]

Thai people have had enough of the Chinese..Spin what you want

[cmsally]

I wonder if the 8 room hotel mentioned has a hotel license !!

[Thailand]

The couple of examples are doing business legally, the majority most certainly are not legal, particularly homestay.

And most Chinese do not know what a TM30 is let alone filing them for guests or family.

[Redline]

Thailand is a little China in the making 

[simoh1490]

37 minutes ago, Media1 said:

Thai people have had enough of the Chinese..Spin what you want

Thai people are very happy making money because of the Chinese, that's why so many of them are learning the language, if the Chinese weren't here in such large numbers in the North there wouldn't be a tourist industry.

[simoh1490]

The Chinese influence in Thailand has always been very strong, it's the home of the largest Chinese population outside of China, some estimates say 14% of the population or 9 million people and that's before the current influx of tourists. And why not, they are industrious, have a solid work ethic and unlike their western counterparts they assimilate and integrate easily and don't cause many problems.

[blazes]

16 minutes ago, Expatthailover said:

Yes it would be much better if the place were chocker with drunken fat old shirtless expats walking the streets hand in hand with girls young enough to be their grand daughters.

A real boost to any tourist destination

 

Well, at least the "drunken fat old shirtless" gentlemen have not, as far as  I know, ever been accused of defecating in holy places....

[CNXBKKMAN]

Running a decent guest house, selling tasty(i hope) chinese noodles sounds positive to me. Good luck to them.

[CanuckThai]

50 minutes ago, Expatthailover said:

Where do you go if you want to get away from sneering xenophobic western expats I wonder

 

47 minutes ago, Expatthailover said:

Yes it would be much better if the place were chocker with drunken fat old shirtless expats walking the streets hand in hand with girls young enough to be their grand daughters.

A real boost to any tourist destination

 

Whoa...have you got a business card?

Always good to have a wet towel, when the celebrations run long, and want to empty the house.

[Srikcir]

11 hours ago, webfact said:

Chinese were also the only nationality to increase their numbers in Chiang Mai from 2014 to 2016 – with an almost 43 per cent increase – while other nationalities decreased

Not sure if that's a trend Thailand wants to continue. Gives the Chinese government an economic leverage unique to its authoritarian governance over its citizens to influence Thai national politics.

[arithai12]

4 hours ago, simoh1490 said:

The Chinese influence in Thailand has always been very strong, it's the home of the largest Chinese population outside of China, some estimates say 14% of the population or 9 million people and that's before the current influx of tourists. And why not, they are industrious, have a solid work ethic and unlike their western counterparts they assimilate and integrate easily and don't cause many problems.

Nice to know that that's the case on your planet.

On planet Earth, it's exactly the contrary.

[simoh1490]

33 minutes ago, arithai12 said:

Nice to know that that's the case on your planet.

On planet Earth, it's exactly the contrary.

We see different things then, not surprisingly, most people do. What I see is Chinese men marrying Thai women and starting/operating successful businesses of all kinds, the North and the SET are saturated with them - if what you see are busloads of Chinese tourists on two week holidays, we're talking about totally different things.

[cmsally]

Rather off subject but this is a good book

 

Letters from Thailand

 

and

 

Chinese assimilation

 

There was a period not so long ago when Chinese had to take Thai names, no Chinese education/ language etc. This only loosened up with the opening up of China and communism not being seen as a threat.

I would be cautious in saying the arrivals will be successful, hard working etc. Chinese also have a propensity for "flash the cash" and gambling. They can also be somewhat competitive without thinking things through. It can make for an interesting outcome.

[simoh1490]

58 minutes ago, cmsally said:

Rather off subject but this is a good book

 

Letters from Thailand

 

and

 

Chinese assimilation

 

There was a period not so long ago when Chinese had to take Thai names, no Chinese education/ language etc. This only loosened up with the opening up of China and communism not being seen as a threat.

I would be cautious in saying the arrivals will be successful, hard working etc. Chinese also have a propensity for "flash the cash" and gambling. They can also be somewhat competitive without thinking things through. It can make for an interesting outcome.

Indeed it is impossible to generalize and be correct but much depends on the geographic location and the North seems to lead in this respect, perhaps because of the proximity to the border - and whilst there are many obvious Chinese success stories I accept there will also be the opposite including significant criminal elements. But Chinese people representing 17% of the population is a huge number, the number three spot in the rankings is a much smaller number and is also much lower profile, it's telling that most major Thai companies have Thai/Chinese execs on their boards whereas very few have other nationalities in similar roles, except as expats. The following demonstrates my point nicely:

 

"Many of the businesses in Thailand are owned by Chinese. Thais have traditionally been involved in farming and governing while Chinese ran commercial and industrial activities. In the 1970s, about 75 percent of all the shops, banks and factories in Bangkok were Chinese owned. In 1995, 11 Thais were listed as dollar billionaires. All but one were of Chinese descent. At that time 12 of the 15 commercial banks are owned by Chinese families. Ethnic Chinese tycoons were hit hard by the Asian financial crisis. Many were technically bankrupt for years".

 

http://factsanddetails.com/asian/cat66/sub418/entry-4306.html

 

[Rama]

What???? How do you apply for a work permit while on a tourist visa? She states in the article that she is running the guest house without a b visa or work permit????? How many laws is she breaking already??? The difference between the Chinese and Japanese investors here are the Japanese open up large factories and pay the Thais above average wages for skilled labor. The Chinese come here to open up small businesses to get visas to get out of China and exploit the Thais the same way they were done to and still do to other Chinese with minimum wages. And an anthropology professor (anthropology, not business, not economics) is an expert on this and says the Thai people don't work as hard as the Chinese?? And the quality of life for the average Chinese compared to the average Thai is.....    

[elektrified]

On 9/3/2018 at 10:46 AM, simoh1490 said:

Thai people are very happy making money because of the Chinese, that's why so many of them are learning the language, if the Chinese weren't here in such large numbers in the North there wouldn't be a tourist industry.

The Chinese tourists provide the wife with about 12K more Baht per month in commissions than she used have. No complaints from her (even though she doesn't particularly like them). She has been studying Mandarin for a few months now.

[simoh1490]

2 minutes ago, elektrified said:

The Chinese tourists provide the wife with about 12K more Baht per month in commissions than she used have. No complaints from her (even though she doesn't particularly like them). She has been studying Mandarin for a few months now.

In almost an exact mirror image of that, my wife's business also benefits substantially as a result of Chinese tourists and she's now in her third year of studying Mandarin - we should put them together and let them make us rich then you and I can go out and play golf and drink beer.

[JingerBen]

2 hours ago, simoh1490 said:

In almost an exact mirror image of that, my wife's business also benefits substantially as a result of Chinese tourists and she's now in her third year of studying Mandarin - we should put them together and let them make us rich then you and I can go out and play golf and drink beer.

+1.

My wife also profits from her tenants - some of whom are Chinese - in the rental properties she owns.

Her own father was ethnic Chinese born and raised in Thailand, but she will often use the derogatory term sai jaek to anyone showing selfish or arrogant behavior.

Most Thais don't really dislike the Chinese because they've been a part of the history and culture for so long.

That said, when it's called for, they don't hesitate to call a spade a spade.

[Vacuum]

On 9/3/2018 at 12:47 PM, simoh1490 said:

What I see is Chinese men marrying Thai women and starting/operating successful businesses of all kinds,

A 'proxy' is a must whe starting a business.

[Sir Dude]

Quote

......and foreigners not following regulations

Lol...come on, how did they say that with a straight face.