Bangkok Post Public Company Limited

Explore trading routes to South China

Wednesday November 14, 2018

Post Today, Bangkok Post and M2F have collaborated with Asset Pro Management (APM) in organising a seminar on how the opening of the southern China trade route (Chiang Khong-Bo Ten-Xishongpanna-Kunming) has led Thai entrepreneurs to explore its business potential. Meet experts from Thailand and China who will showcase new business opportunities.

Nitivadee Manitkul, Consul-General in Kunming, revealed that the Yunnan Province of today is one of environmental and cultural diversity. The Chinese government has encouraged investment in Yunnan Province, in particular the Tourism, Green industry and IT sectors. The Chinese government knows that Thailand has expertise in the tourism industry, and therefore wants Thai investors to support the project and transfer knowledge to China.

 

 

The priority is the green industry, as China seeks to protect the environment and create a friendly relationship because Yunnan is famous for agricultural assets such as tea production and Arabica coffee cultivation, which is regarded as the best coffee in China. Therefore, conducting business in the areas of agriculture, coffee bean production and environmental protection poses a significant opportunity for Thai entrepreneurs to enter China’s industrial investment sector while using quality raw materials.

 

IT is another way that Thai entrepreneurs can penetrate the southern China market. Although there are many IT business opportunities, investment comes with risk. Thai entrepreneurs must prepare for the challenge of invading the Chinese market. Nitivadee emphasised that large companies which invest in China have a better chance of surviving than small companies. However, having a good business partnership will help strengthen small Thai businesses. Though some money transfer restrictions and language issues remain, the Chinese government is currently working to improve the situation.

 

However, all business limitations must be addressed. The thing that continues to attract investment in China is the large consumer market. Yunnan has a population about 47 million people, more than two-thirds the population of Thailand. It is the province with the highest economic growth rate in China at 9.1%. But it is important to understand that before entrepreneurs commit to investing in Yunnan or other areas of China, they must study investment regulations and consult with experienced people.

 

"At present, the Chinese government is encouraging people to visit Yunnan so that consumption will increase. Business leaders in Yunnan have asked if there is a Thai one dish meal business or convenience store chain willing to invest in businesses that support tourists, because Thailand has an aptitude for these things. It is a business opportunity for Thai entrepreneurs to consider, "said Nitivadee.

 

For those seeking to import products to China, there remain limitations in the documentation process, which is considered to be complex and difficult to navigate. This is especially true for food products. Factories must meet Chinese standards, but those who succeed will enjoy success considering the size of the Chinese consumer market.

 

Successful Thai businesswomen Chanjira Ananchaipattana lived in Yunnan for 19 years, starting a logistics business there before expanding into restaurants and business consulting. Her company, Moonlight Trading, is a distributor of products for such brands as S&P, Kaset jasmine rice, Betagen, and others. Until 3 years ago, she was studying the e-commerce business in response to the high growth in China. Her advice for Thai entrepreneurs seeking to invade the Chinese market is to start by securing the copyright for their products in China and study import planning, marketing and public relations. Most importantly, they must confirm that their products can be legally exported to China.

 

"The most important thing to remember before Thai manufacturers deliver products to the Chinese market is that the products must be well known in China, and they must know the level of the product for import planning," said Chanjira.

 

Peter Foo, President and CEO of United Overseas Bank China, points out that Southern China enjoys a high GDP growth rate. However, if entrepreneurs are interested in investing in China, they should consider their skills and area of investment, not only in Southern China, and determine which products are suitable for that area because each area of ​​China is different in terms of demand.

 

Because the most frequently traded products between Thailand and Yunnan are agricultural products, it is recommended to start investing in this sector due to lower operational costs and the fact that they can be sold via e-commerce platforms, and because Chinese consumers trust the quality of Thai agricultural products.

 

Peter Foo concluded by saying: "The agricultural products of the Thai Royal Project are famous here including, especially jasmine rice, but the main problem is capital. Banks can advise those who want to invest in large projects, and when they are confident that they are confident that they can invest in China by producing their products here, the Chinese government will be willing to support them because it boosts regional employment figures."

 

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