NESDC urges govt to support Thai firms in production base relocations

The National Economic and Social Development Council (NESDC) has recommended the creation of mechanisms to enable Thai businesses to hold shares in companies relocating their production bases to Thailand, amid growing global trade tensions.

Danucha Pichayanan, secretary general of the NESDC, addressed concerns regarding Donald Trump's upcoming inauguration as US president on January 20, emphasising the need to factor in various risks to Thailand's economy. 

He particularly highlighted the importance of scrutinising policy details beyond mere tariff rates, noting that complications could arise if US tariffs extend to products containing Chinese components.

"Thailand appears to be weathering the storm in the first half of 2025, but we anticipate significant headwinds in the latter half," Danucha said. "As Thailand ranks 12th in [terms of its] trade surplus with the US, albeit lower than China or Vietnam, we face potential trade restriction risks."
 

The NESDC revealed that of the foreign direct investment (FDI) Thailand enjoys, a substantial portion comes from Singaporean investors with Chinese origins. 

"We must develop mechanisms to ensure Thai ownership participation in these relocating companies, whether through direct investment or joint ventures," Danucha explained. "Simultaneously, Thailand must maintain its neutrality in ongoing trade conflicts."

Regarding Thailand's economic outlook for 2025, the NESDC projects growth between 2.3-3.3%, with a median of 2.8%. This growth is expected to be primarily driven by public- and private-sector investments. The council noted that 2024 saw Board of Investment (BOI) applications exceeding 1.1 trillion baht, with FDI accounting for about 830 billion to 840 billion baht.

          Key growth sectors identified include:

• Semiconductor manufacturing
• Electric-vehicle production
• Data-centre development

The NESDC emphasises these sectors as crucial drivers of Thailand's new economic landscape, while maintaining vigilance regarding potential trade-policy shifts among major global powers.

"We've prepared multiple scenarios in collaboration with the Ministry of Commerce," Danucha added, "considering whether new US measures might be implemented as immediate actions or as negotiating tactics."

The council's recommendations come as Thailand positions itself as a neutral party in global trade disputes while seeking to maximise benefits from production-base relocations amid changing international trade dynamics.