France in Thailand 4.0
24 August 2017
The French Embassy, the French Foreign Trade Advisers, Business France, the French Chamber of Commerce, French Tech… The French team displays an impressive dynamism about increasing Franco-Thai economic relations and mobilises to make the hexagon’s voice heard in the Thailand of tomorrow.
On June 9, the Foreign Trade Advisors of France gathered some 150 economic actors, for the occasion of an information and exchange day on the French presence in the country in the face of Thailand’s economic issues entitled: From Siam to Thailand 4.0.
A unique opportunity to take stock of the developments taking place in the kingdom’s economy through which an incontestable wind of modernity is blowing, as well to consider how French companies can apply their expertise and share in the opportunities thus created.
On the occasion of 14 July, our ambassador Gilles Garachon, celebrating 160 years of diplomatic relations between France and Thailand, spoke at a press conference about an economic partnership he considers to be a natural one: “Our two countries, which are of comparable size, have many points in common. They are both crossroads countries in their respective zones, France being a major economic platform in Europe and Thailand being the central economy in the ASEAN region. Similarities are also obvious in the automotive industry: France is the eleventh largest vehicle manufacturer in the world, just ahead of Thailand, which is twelfth. Similarly, the agrifood industries and tourism (our biggest provider of foreign currencies) likewise occupy important positions in our respective economies. Like the French, Thais love to eat and to travel! France, which with new president Emmanuel Macron has confirmed its attachment to the European project, constitutes more than ever an important anchor point for Thailand regarding access to the single market. Thai companies have already invested in France and are therefore present in the Euro zone, with all the advantages that this position o ers. We want these important examples to be followed by others.
Thailand is already France’s second-largest regular economic partner in the ASEAN region and we just held the second high-level intergovernmental economic dialogue on 3 July. In addition, representatives of Thai and French companies have signed a memorandum of understanding to detail the projects of their cooperation in the areas of agrifood, energy transitions, transport and smart cities.
Since my arrival in 2015, I have been convinced that our two countries, for all the reasons mentioned above, are destined to cooperate in moving forwards together. Be patient: I am confident about the stability of Thailand, and I think that after the year 2017, which was marked by mourning, 2018 could be a year for a restart, with one ambition, that of attaining a 3 % share of the Thai market (editor’s note – compared to the current 1.44 %) and attracting more medium-sized companies (editor’s note – 250 to 5,000 employees) to Thailand. To this end, I want the Thais to open up their economy and labour market.”
Exchanges and changes
260 French companies are already established in Thailand. With 1.7 billion euros in exports, France is the second- largest European supplier in the kingdom, which exports 2.6 billion to France. Jean-François Goumy, director of Business France for Thailand, Myanmar and Laos, and Audrey Souche from the law firm DFDL, recalled during their presentation on 9 June that 30,000 French people are present in Thailand, i.e. as many as in China, and that Thailand is the most francophone country in the region with more than 560,000 people speaking our language. “France finds itself at the cutting edge in many fields”, said Jean-François. “We are number one in cosmetics with a 20 % market share, number one in wine with 40 %, number two in aeronautics and number five in medicines”.
A round table devoted to priorities, challenges and opportunities was held on the same afternoon centred around Marc Pelletier, president of Schneider Electric Thailand, deputy secretary general of the Thai Board of Investment Duangjai Asawachintachit, president of the Federation of Thai Industries Chen Namchaisiri, Alliance SCG director of technology Anurak Bannasak and director of Line Thailand Ariya Banomyong. The latter summed up Thailand 4.0 in one word: Internet.
For this ardent defender of the digital economy, which is highly profitable for limited investments, the 44 million Thais already connected to the web represent a breeding ground for all forms of business, with connectivity being the best way to reach them. These are the fundamentals of the Thailand 4.0 concept.
After having known an economy based on agriculture, and then one based on low-cost production which then moved on to heavier industrial production, illustrated, for example, by success in the automotive sector, it is now time for Thailand to make progress and emerge from the “middle-income trap”, which translates into low economic growth (due to rising labour costs in times of high growth which is itself due to the previous low labour costs), and to truly evolve towards a service economy with high added value based on creativity and innovation.
“We have seen that France has put innovation at the heart of its future economy,” concluded Gilles Garachon. “President Macron inaugurated the biggest start-up incubator in the world, Station F, located in the Halle Freyssinet in Paris, with the aim of highlighting French technologies. We are therefore fully in tune with the Thailand 4.0 strategy and partnerships in this area are expected.”