China To Build $1.5 Billion Trading Centre In Thailand

[webfact]

China to build $1.5 bn trading centre in Thailand

BEIJING, January 6, 2011 (AFP) - China will build a "commercial city" in Thailand worth $1.5 billion that will allow traders to re-export Chinese-made goods and avoid costly tariffs, state media said Thursday.

More than 70,000 Chinese traders are expected to operate in the China City Complex in Bangkok, helping them miss levies on products shipped directly from China, the China Daily said, citing officials involved in the development.

The 700,000-square-metre (7.5 million square foot) centre -- equivalent to 100 football pitches -- will resemble the world's largest wholesale market for small products in the city of Yiwu in eastern China, the report said.

Construction of the centre will begin on January 18 and is expected to be finished by 2013, it added.

"Apart from the business opportunities in Thailand, Chinese exporters can also promote their products to developed markets such as the European Union and the United States through this project," Yang Fangshu, chairman of the ASEAN-China Economic and Trade Promotion Centre, was quoted as saying.

China signed a free trade agreement with Southeast Asian countries including Thailand in January 2010 which reduced or removed tariffs on traded goods.

Export-driven China has seen its trade surplus with the rest of the world balloon in recent years, reaching $196.1 billion in 2009 and triggering rows with trading partners who complain their shelves are been flooded with cheap Chinese-made products.

China was targeted in a record 127 cases brought by trading nations in 2009, the report said, without providing details.

The country's trade surplus likely topped $190 billion in 2010, a commerce ministry official said recently. China is due to release full-year trade data next week.

There have been a series of trade spats between China and its key trading partners, the United States and Europe, from chicken products and modems to steel fasteners and China's yuan exchange rate policy.

Washington has led a chorus of complaints that China's exchange rate controls have made the country's exports artificially cheap and given its manufacturers an unfair advantage.

-- (c) Copyright AFP 2011-01-06

[laurentbkk]

So if I understand ,China want to build a trade center in Thailand to re sell Chinese goods ..... and avoid western anti dumping taxes .Clever ..... but what about Thai products ? I guess its nearly the end of those if such project is done.

[doggie888888]

The article does not say what the benefits will be for Thailand. Did anyone see this (whether as a report or analysis from a Thai perspective) in local Thai press?

[TheWalkingMan]

70,000 Chinese traders? Sounds like a lot of local traders are going to be wiped out.

TheWalkingMan

[Soi Sauce]

Where has Bkk got the space for this, and does Thailand want to commit economic and sovereignity suicide?

Well, if there's a fast buck to be made, FFFFF the future!

[laurentbkk]

The United States and Europe have led a chorus of complaints that China's exchange rate controls have made the country's exports artificially cheap and given its manufacturers an unfair advantage.

With a very strong baht Thailand will not be competitive anymore .... look at the markets here , full of Chinese product ..Thailand is killing softly but surely its own small industry .

[thaihome]

Where has Bkk got the space for this, ...

You do know that Bangkok covers an area some 7,761.50 km²?

Lot's of place for a building this size.

TH

[jonclark]

70,000 Chinese traders? Sounds like a lot of local traders are going to be wiped out.

TheWalkingMan

That's a lot of WP to process

[Thailand]

With the rising waters perhaps a floating China City Complex would be advisable?

[Thai at Heart]

Nice to see that 'Certificates of Origin" are easy to modify in Thailand.

I can see this idea actually leading to Thai industry being effected by this as importing countries scrutinise the origin of goods more closely.

[Ricardo]

One wonders whether Chinese-produced beers might overcome the informal barriers which currently still seem to prevent other asian producers from entering the Thai market in any meaningful way ? How will this affect bar opening-times ?

Also what special economic-incentives or status might apply to this new trade/re-export centre ? Will it be some sort of Free Trade Zone, located near the ports, or on the path of the proposed new high-speed China-Singapore railway ? Wonder who currently owns the land involved, and when it was acquired, by them ?

What protection is envisaged for existing Thai-based manufacturers ? Or are they, and the jobs they generate, to be swept away by another wave of cheap imports ?

Perhaps this is merely the next new shopping-mall, for Bangkok residents & tourists alike, to enjoy ? Reminder to self ... lock up the family credit-card !

Edited January 6, 2011 by Ricardo

[LaoPo]

'Son of Yiwu' to begin on Jan 18

Updated: 2011-01-06 10:27

China City Complex will be built in Bangkok with 10 billion yuan

YIWU, Zhejiang -

China plans to construct a second Yiwu International Trade City, the world's biggest small-commodities hub, in Thailand.

It's part of a move to make the southeastern neighbor a re-export center to promote the country's small-goods exports in a global market troubled by rising trade protectionism.

With investment of 10 billion yuan ($1.51 billion), construction will begin in Bangkok on Jan 18 at the China City Complex, a commercial and wholesale town similar to China's Yiwu.

It will sell Chinese-made goods, including garments, ornaments and household items.

"China City Complex is one of the biggest cooperation projects between China and Thailand, corroborating a strategic business-partner relationship between the two countries," said Alongkorn Ponlaboot, Thailand's deputy-minister of commerce, on Wednesday, who had traveled to Yiwu to woo investors.

Construction of the commercial city, which will cover 700,000 square meters, is expected to be completed by 2013. It will attract more than 70,000 commercial tenants from China, according to Dong Hongqi, chairman of Yunnan-based Ashima Cultural Industry (Group) Investment Co Ltd, the Chinese partner in the project.

"Apart from the business opportunities in Thailand, Chinese exporters can also promote their products to developed markets such as the European Union and the United States through this project," Yang Fangshu, chairman of the ASEAN-China Economic and Trade Promotion Association, said, adding that Chinese investors enjoy bilateral trade with Thailand without the imposition of tariffs, and also low tariffs when trading with other developed economies.

Continues:

http://europe.chinad...nt_11803227.htm

LaoPo

NOTE:

I question if this "Son of Yiwu" will be as big as Yiwu in Zhejiang Province itself. Anyone who has been to Yiwu will know. Yiwu is unbelievably huge.

But if the Thai version will act as a hub for a number of Chinese and Thai Producers it will benefit Thailand. The organisers will definately also rent out to Thai producers; why not.

Yiwu has to be seen as a kind of large shopping mall for traders only, housed in large towers divided in different sectors like toys, shoes, jewelry etc.

I don't know where this new wholesale complex will be built but I suppose somwehere near the river, close to China town?

Edited January 6, 2011 by LaoPo

[Northman061]

Ohhhh, so many good things to pick over!

Location, location, location! Where?

They are building it from the 18th of this month? Who owns/owned the land? One assumes a huge Thai investment would be needed for infrastructure, roads, electricity, services etc for the businesses? Car parking/bts/mrt locations nearby?

I would have thought that such a massive (even by Asia standards) new retail "town" would be a joint PR event? Where are the plans, the flashy scale models and the blurb telling us about its many benefits to Thais? On TV later maybe?

How does Thailand benefit if you allow the Chinese to bypass all import taxes? And when the non tax paying Chinese swamp Thailand with ntheir products, they intend to use Thailand as a base to launch "their products to developed markets such as the European Union and the United States through this project," Yang Fangshu, chairman of the ASEAN-China Economic and Trade Promotion Centre, was quoted as saying.

My, thats a great arrangement. I am sure no Thai businessmen or officilas in the "Closed shop" anti west 100% ownership of businesses "Elites" were well "looked after" for this great honour the Chinese were bestowing on Thailnds soon to be crushed technology industry. Compensation through "tea money"...never.

This is such a huge development, that has real impact on Thailnds own home grown electronics industry and its future State revenues, i find it hard to believe that this is suddenly "announced" by the Chinese, yet the Thai Government are quietly doing nothing? Hmmmm.

[Munich]

They got the same thing in the UAE/Dubai.

Dragon Mart

See the buildings on the left, they are attached to each other, about 1 km long, .

[Huey]

Funny how they are crazy protectionalist except for when it comes to china. When China Wipes out their local manufactures they will have no one else to blame but themselves. It happened in the US, we used to produce some of the best quality goods in the world. now we just consume garbage chinese junk because it's a couple of bucks cheaper.

[LaoPo]

The negative brigade from TV is in full force I notice Silly really, but no surprise since the negative brigade never sleeps

The spin-off for Thailand from this huge investment is also huge; think of the hotels, the restaurants, thousands of extra workers needed, boost in local logistics and transport, extra airfreight, more work for shipping agents; many opportunities for Thai handicraft- and other small items manufacturers.

It wouldn't surprise me if many Laos', Cambodian, Malaysian, Vietnamese and even Indonesian/Philippine sellers and manufacturers would want to rent space and join this enormous wholesale outlet to show their merchandise and sell them overseas.

A lot easier than to attract buyers in their own far away factory.

Those sellers and manufacturers won;t be there themselves but hire Thai staff to act as sales people and "shop" staff. Thousands of them will be needed.

A real boost to the Thai economy. I can only see benefits

Thailand will be pleased with this investment and future spin-off or would the negative brigade prefer this huge investment would have taken place in Malaysia or elsewhere?

LaoPo

[Thai at Heart]

Ummmm. I thought retailing was off limits to foreigners???

[beejoir]

Stinks to me.

Especially with all of the nationalistic Thai'ness' someone got a huge bung, and I'll really screw Thai industry.... thats how I see it but I might be seriously wrong!

[LaoPo]

Ummmm. I thought retailing was off limits to foreigners???

No retailing here; whole sale hub for re-export.

LaoPo

[LaoPo]

Stinks to me.

Especially with all of the nationalistic Thai'ness' someone got a huge bung, and I'll really screw Thai industry.... thats how I see it but I might be seriously wrong!

I think so.

See it this way:

the product is now sold and shipped from China; next step is that it's (also) shipped via Thailand to overseas export markets, leaving money in Thailand via extra income and stepsas explained above.

Win-win situation, next to that many Thai small enterprises will jump on this train, hugely benefitting them since large numbers of overseas buyers will prefer to travel to BKK instead Yiwu/China which is far away from any major city like Shanghai; the next major airport is Hangzhou which is not a very large International hub although they have a daily hub to HK.

Yiwu itself has only a small airport serving domestic destinations.

Buyers will save time and will prefer BKK over Yiwu.

This project will become an enormous boost for BKK next to the Thai economy.

LaoPo

[RKASA]

Ummmm. I thought retailing was off limits to foreigners???

No retailing here; whole sale hub for re-export.

LaoPo

You mean a pirates cove made in__________ insert your choice outlet. labels ha baht

[rbrick49]

1 block wide 40 blocks high kapoot

[LaoPo]

..Like I said: the TV negative brigade never sleeps...

In the meantime the building goes on but not by the negative brigade...they're too busy, complaining

LaoPo

[CosmicSurfer]

See it this way:

the product is now sold and shipped from China; next step is that it's (also) shipped via Thailand to overseas export markets, leaving money in Thailand via extra income and stepsas explained above.

Win-win situation, next to that many Thai small enterprises will jump on this train, hugely benefitting them since large numbers of overseas buyers will prefer to travel to BKK instead Yiwu/China which is far away from any major city like Shanghai; the next major airport is Hangzhou which is not a very large International hub although they have a daily hub to HK.

Yiwu itself has only a small airport serving domestic destinations.

Buyers will save time and will prefer BKK over Yiwu.

This project will become an enormous boost for BKK next to the Thai economy.

LaoPo

As a person involved in International sourcing and product development for many years, let me explain how this will NOT benefit Thailand.

1) Transshipping through Thailand may increase business to Thai transport and logistics companies, but there is no Thai manufacturing, so the added benefit is small potatoes and will only benefit those few Involved in the Logistics and shipping business... Meaning No small Thai companies.

2) I saw no mention of actually warehousing any product here.

3) China would NOT be investing in any Trade center that would benefit any other countries.. This is not an International Trade center.. It is a China Trade center... doubtful that any Thai company would be able to get any space, which is why there has been no major Thai road show promoting this idea... and for other Asian countries... Forget it!! China cares little for promoting ASEAN.

4) The article quite clearly stated that their would be 70,000 Chinese jobs.. not Thai jobs... Believe me there will be little Thai presence to act as "Shop keepers" or Sales people... Why NOT ??? They don't speaka da language... and have virtually NO training in International trade or business practices... Don't believe me... Try walking around the BIG (Bangkok International Gift) show or any other so-called international show at Impact or BITEC... Try getting a catalog in English or any not Thai language.. or a price list.. or even getting them to send you an Email.. or answer some questions about the products in their booths.. or do any custom packing that is not standard for the Thai market.. Or make clothes in Farang sizes (if they are not already servicing the export market)... Impossible. These shows are International in name only.. Most exhibitors have no intent to service an export market at all and have no business being at a Show that is supposed to be for International buyers.

I have been shopping the Thai market for more than 15 years, and while I see great design and usually better quality than China offers, BUT I have never seen a major increase in International Buyers... And I finally figured out why.... In Hong Kong and China you get SERVICE.. they make you samples, they reply to your email.. they provide catalogs and sales help in English... International buyers have no time to play Thai games... If Thais don't want their money they will gladly spend it elsewhere... Note the increase in foreign investment in Vietnam, etc. International buyers may be impressed by Thai design, but if they get no Followup then they will quickly stop wasting their time coming here.. Unless it's for a Weekend of R&R, between the Hong Kong Trade shows and the Canton fair. Major buyers don't Buy at Shows.. they collect information to bring back to their buying committees and development people.. Orders follow to those companies that provide the best feedback, followup and service. Thais are only interested in the 'here and now'.. If a buyer is not prepared to order 'here and now', then they get no follow up.

And even now, trying to run a new business here in Bangkok, I still have problems getting quotations and samples for OEM Private label products I want to develop... It is easier for me to deal with my contacts in Hong Kong... I'll get faster and cheaper results.. and I will have a product to sell.. Not the total Nothing I get from Thai manufacturers... except a total lack of 'vision'.

I'm happy that they may build this place.. It may save me a trip to Hong Kong, and I will be dealing with knowledgeable Chinese representative dealers.. not Thais.

Frustrated doing business in Bangkok

CS

[LaoPo]

See it this way:

the product is now sold and shipped from China; next step is that it's (also) shipped via Thailand to overseas export markets, leaving money in Thailand via extra income and stepsas explained above.

Win-win situation, next to that many Thai small enterprises will jump on this train, hugely benefitting them since large numbers of overseas buyers will prefer to travel to BKK instead Yiwu/China which is far away from any major city like Shanghai; the next major airport is Hangzhou which is not a very large International hub although they have a daily hub to HK.

Yiwu itself has only a small airport serving domestic destinations.

Buyers will save time and will prefer BKK over Yiwu.

This project will become an enormous boost for BKK next to the Thai economy.

LaoPo

As a person involved in International sourcing and product development for many years, let me explain how this will NOT benefit Thailand.

1) Transshipping through Thailand may increase business to Thai transport and logistics companies, but there is no Thai manufacturing, so the added benefit is small potatoes and will only benefit those few Involved in the Logistics and shipping business... Meaning No small Thai companies.

2) I saw no mention of actually warehousing any product here.

3) China would NOT be investing in any Trade center that would benefit any other countries.. This is not an International Trade center.. It is a China Trade center... doubtful that any Thai company would be able to get any space, which is why there has been no major Thai road show promoting this idea... and for other Asian countries... Forget it!! China cares little for promoting ASEAN.

4) The article quite clearly stated that their would be 70,000 Chinese jobs.. not Thai jobs... Believe me there will be little Thai presence to act as "Shop keepers" or Sales people... Why NOT ??? They don't speaka da language... and have virtually NO training in International trade or business practices... Don't believe me... Try walking around the BIG (Bangkok International Gift) show or any other so-called international show at Impact or BITEC... Try getting a catalog in English or any not Thai language.. or a price list.. or even getting them to send you an Email.. or answer some questions about the products in their booths.. or do any custom packing that is not standard for the Thai market.. Or make clothes in Farang sizes (if they are not already servicing the export market)... Impossible. These shows are International in name only.. Most exhibitors have no intent to service an export market at all and have no business being at a Show that is supposed to be for International buyers.

I have been shopping the Thai market for more than 15 years, and while I see great design and usually better quality than China offers, BUT I have never seen a major increase in International Buyers... And I finally figured out why.... In Hong Kong and China you get SERVICE.. they make you samples, they reply to your email.. they provide catalogs and sales help in English... International buyers have no time to play Thai games... If Thais don't want their money they will gladly spend it elsewhere... Note the increase in foreign investment in Vietnam, etc. International buyers may be impressed by Thai design, but if they get no Followup then they will quickly stop wasting their time coming here.. Unless it's for a Weekend of R&R, between the Hong Kong Trade shows and the Canton fair. Major buyers don't Buy at Shows.. they collect information to bring back to their buying committees and development people.. Orders follow to those companies that provide the best feedback, followup and service. Thais are only interested in the 'here and now'.. If a buyer is not prepared to order 'here and now', then they get no follow up.

And even now, trying to run a new business here in Bangkok, I still have problems getting quotations and samples for OEM Private label products I want to develop... It is easier for me to deal with my contacts in Hong Kong... I'll get faster and cheaper results.. and I will have a product to sell.. Not the total Nothing I get from Thai manufacturers... except a total lack of 'vision'.

I'm happy that they may build this place.. It may save me a trip to Hong Kong, and I will be dealing with knowledgeable Chinese representative dealers.. not Thais.

Frustrated doing business in Bangkok

CS

Thanks! Interesting post.

1. This huge wholesale/re-exporting hub will benefit Thailand in many ways because many thousands of companies and people will directly or indirectly benefit; Hotels, restaurants, catering, IT and many more, next to transport and logistics/shipping by sea or air; mainly the latter since we're talking small merchandise.

Think of the thousands of overseas buyers coming to Thailand instead traveling to Yiwu; they will lvoe to stay in BKK, rather than Yiwu.

Not to speak about the Tax Department in Thailand...

2. It's supposed to be a re-export facility, and I understand it will likely have storage also. Yiwu acts the same; some sellers/manufacturers who have a facility there, also have (in most cases) production facilities elsewhere but carry some stock in Yiwu also, although the main function is selling/showing/trade mart.

3. We don't know that yet if they won;t rent out to Thai or neighbor countries suppliers. I don;t see why they should not rent out to others but we will have to wait and see; they speak of 70.000 (Chinese) sellers who will join the venture; I doubt that since only medium to larger companies could afford a booth/office/showroom in BKK and 70.000 sellers seems highly exaggerated to me.

4. The article didn;t speak about 70.000 workers......they speak about SELLERS, not workers.

Makes sense about the language but don't forget the minimal English language skills by the Chinese versus the Thai as well. Most Chinese owners/producers don't speak a word of English themselves but hire English speaking staff if they're onto the expoert market but to parachute Chinese English speaking staff into BKK seems way too expensive for most exporters; It will be highly costly for them and they will -no doubt- prefer to hire young bright Thai who speak some English.

If they have problems answering questions towards customers those will be answered by the China location; simple.

For your last part in your post: I fully agree...I've been there done that since more than 30 years, both in Thailand (no more) and China, daily basis.

I worked with Thai factories but that's way behind me since the working attitude differ oceans apart (you know that!) and work on a daily basis with Chinese manufacturers.

But, that's not the point, I'm sure the hub will be a success since buyers will come and buy if the products are cheaper than when they buy them in China but with added huge tarrifs and taxes, back home.

That's the whole idea of the re-export hub.

LaoPo

[tw25rw]

..Like I said: the TV negative brigade never sleeps...

In the meantime the building goes on but not by the negative brigade...they're too busy, complaining

LaoPo

It's justified negativity. China has had their easy run to industrial and economic pre-eminence. It's time to put tarifs back and protect what we have left.

[RAZZELL]

The negative brigade from TV is in full force I notice Silly really, but no surprise since the negative brigade never sleeps

The spin-off for Thailand from this huge investment is also huge; think of the hotels, the restaurants, thousands of extra workers needed, boost in local logistics and transport, extra airfreight, more work for shipping agents; many opportunities for Thai handicraft- and other small items manufacturers.

It wouldn't surprise me if many Laos', Cambodian, Malaysian, Vietnamese and even Indonesian/Philippine sellers and manufacturers would want to rent space and join this enormous wholesale outlet to show their merchandise and sell them overseas.

A lot easier than to attract buyers in their own far away factory.

Those sellers and manufacturers won;t be there themselves but hire Thai staff to act as sales people and "shop" staff. Thousands of them will be needed.

A real boost to the Thai economy. I can only see benefits

Thailand will be pleased with this investment and future spin-off or would the negative brigade prefer this huge investment would have taken place in Malaysia or elsewhere?

LaoPo

Interesting...

But as far as I understand it "Yiwu" is like a big wholesale market...Buyers look at exhibitors wares and they then place an order for 50,000 flower pots or whatever. The orders are then processed and the goods come from the factories wherever they may be in China. I don't believe (although stand to be corrected) that thousands and thousands of tonnes of stock are lying about in warehouses around the corner...or is this the case?

Therefore if the Thai "Yiwu" is built, it would just be a glorified exhibition centre and "order-taking shop" for the goods which are still built in China. Although, I'm sure there would be benefits due to the vast numbers of exhibitors and customers.

And obviously, Bangkok is a hell of lot easier to get to than Yiwu...it is a "hub" after all

Finally, how do they intend to get around international tariffs - I'm not quite sure? Import the goods and then re-export them? The goods will still be "Made in China" regardless of where the order was placed

RAZZ

[fire and ice]

Where has Bkk got the space for this, and does Thailand want to commit economic and sovereignity suicide?

Plenty of space in Ratchadapisek - a huge plot of state-owned land is vacant there.

[witold]

Is this only a pass-through for reexport to the world?

You do realize that China makes all sorts of electronics and computers - vast majority of which is hugely overpriced in Thailand. This is one of Thailand's huge drawbacks for a lot of people - if they want some stuff, they are paying a lot more than in the USA. That is why Thais fly to Hong Kong and Singapore to their shopping.

[LaoPo]

..Like I said: the TV negative brigade never sleeps...

In the meantime the building goes on but not by the negative brigade...they're too busy, complaining

LaoPo

It's justified negativity. China has had their easy run to industrial and economic pre-eminence. It's time to put tarifs back and protect what we have left.

Easy run...after being locked up in dark ages for so long.....easy run? You've probably not see the differences of the real dirt poor Chinese people and the unbelievable rise of the country since 30 years...I have!

In those 30 years you and I and our parents were living in relatively comfortable circumstances.

You don't know what you're saying and it's out of pure ignorance.

If you're one of those protectionists you should study the economics of the world a little better and learn that protectionism doesn't work..never!

The west will be hurt in such a devastating way that you won't even have time to breath and gasp for air...so bad it will be(come).

The differnce is that western contries (and their people) long forgot how to save money; they just spend, spend and spend, whilst the Chinese families are used to save money since history.

They can and will be able to survive a lot easier than we western people can, be assured of that.

LaoPo