Taipei Times: President Chen Shui-bian (陳水扁) recently vowed to speed up the implementation of direct links between Taiwan and China. If the links were established, how would Thailand-bound Taiwanese investments be likely to be affected?
Piyawat Niyomrerks: Even though [Taiwan's] government tries to limit businesses from going to China, many big businesses are going to China despite the restric-tions. Of course, for small and medium-size enterprises (SMEs), which are Thailand's main target to attract investments from, it'll be very competitive between China and Thailand. But whether direct links are established or not, China has been a highly competitive place for Taiwanese investors. However, from the Asia-Pacific trade point of view, the links will directly benefit regional free trade and regional investments.
Of course, there are pros and cons. The con is that Thailand will be less competitive in terms of attracting [Taiwanese] investments. Having said that, I think the pro elements should eventually prevail. And we'd like to see a free flow of trade within the region in order to make the Asia-Pacific region a more competitive and stronger trade zone than other regions such as the [North] America and Euro zone. Asia has so much potential and each country has its own expertise. If you combine groups of Asian countries together, we can be self-sustainable and self-sufficient in terms of trade.
TT: The Thai government's Board of Investment is aiming for an extra 15 percent to 20 percent growth (or US$200 million) in Thailand-bound Taiwanese investments next year. What promotional policies does the Thai government plan to launch to achieve that goal?
Niyomrerks: We have prioritized certain industries to promote, such as the fashion, automobile and information-technology (IT) industries, in which we'd like to see more Taiwanese participation. We'll arrange a road-show for business partners and help facilitate loans to start-up entrepreneurs [in the near future]. As for tax incentives, Thailand has exempted import tariffs for materials and machinery, as well as offered up to an eight-year tax break on corporate earnings. In terms of tax incentives, Thailand is second to none in Asia.
TT: Is China the biggest challenge for Thailand in attracting Taiwanese investments, which are the third-largest [foreign investments] in your country?
Niyomrerks: It's a natural phenomenon [that some capital is diverted from Thailand to China] since China -- the world's biggest consumption market -- is opening up. We can't stand against that trend. But as time passes, we believe businesses which grab a sufficient share in Chinese markets will return to Southeast Asia and Thailand.
We would also like to see China as our trade partner by establishing a free-trade zone and giving incentives to Chinese entrepreneurs to invest in Thailand. That will set a good example for others to see that even though Chinese markets are big, some Chinese investors are coming to Thailand.
Nevertheless, investors should look at the markets in China and Thailand as the same market, especially after the free-trade agreement on vegetables and food [between China and Thailand] takes effect next year and a comprehensive free-trade zone among the 10 ASEAN countries is established in 2010. By that time, with 500 million people in ASEAN countries and 1.2 billion people in China, it will be a big market with almost 2 billion consumers. Thailand is also working on a free-trade zone with South Asian countries such as India, which has a population of 1 billion.
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