Jack Ma, founder of e-commerce giant Alibaba, talks during the memorandum of understanding’ signing ceremony of “Smart Digital Hub and Digital Transformation Strategic Partnership” in Bangkok on Thursday. (Reuters photo)
Prime Minister Prayut Chan-o-cha on Saturday played down concerns over Chinese e-commerce giant Alibaba Group’s monopoly after Thailand signed a memorandum of understanding (MoU) with the company on investment in the Eastern Economic Corridor (EEC).
Government spokesman Sansern Kaewkamnerd said on Saturday the premier thoroughly understood the public and private sectors’ worries about the issue but he wanted Thais to prioritise national interests and become more broad-minded.
“The prime minister has strictly instructed the government’s economic team to carefully look into advantages granted to foreign investors which must not affect Thai business operators. Imported products must be regulated as well to protect small- and medium-sized enterprises [SMEs],” he said.
“In the meantime, the government also offers opportunities to other [foreign] investors to compete [in the Thai market] to balance the country’s economic system.”
In addition, the government spokesman said Alibaba Group clearly announced the company is an advocate of free trade and has projects to help new blood investors in countries it invests in to achieve their business goals without incurring a trade war.
Lt Gen Sansern said a host of Thai products were popular among Chinese consumers, particularly Hom Mali rice and durian. With e-commerce expansion in the mainland, these items have been selling like hot cakes.
“The prime minister suggested business operators adjust themselves in preparation for trade competition. Don’t consider it [Alibaba Group’s investment] an obstacle but a challenge because Thais also have high calibre products on par with those from other countries,” Lt Gen Sansern said.
He said Alibaba’s investment in the EEC would be a big boost as Thailand has not seen such immense investment since the construction of Suvarnabhumi airport.
Alibaba co-founder Jack Ma on Thursday signed MoUs with the government. Among them is an investment worth 11 billion baht (US$352.4 million) in a smart digital hub in the EEC.
Other projects cover training farmers to use e-commerce to boost exports to China, human resource development and startups and operating a digital tourism platform in Thailand.
The prime minister’s reaction came after Pawoot Pongvitayapanu, founder of tarad.com, warned Thai businesses would be affected by the Alibaba deals.
Mr Pawoot reportedly said Chinese products would flood the Thai market and outperform local commodities. He warned Alibaba’s investment could spell doom for Thai intermediaries and let Chinese middlemen monopolise trade.
He warned Thai manufacturers might go out of business as Thai products could not compete in a price war as Chinese firms had lower production costs.
Mr Pawoot said he was glad that Alibaba had invested in the country but added that he only wanted to show the other side of the coin.
“I still insist Thai retail products will be monopolised by foreign investors in the next five to 10 years as a result of their huge financial investment and growing social media. Therefore, we have to figure out how we will adapt ourselves to live with the change and push our country forward,” he said, adding that the government must work very hard to help exports and slow down imports from China.
Korn Chatikavanij, former finance minister, said earlier Alibaba’s investment could become a double-edged sword as Thai business operators, especially SMEs, could be barred from trade by Alibaba’s business.
Earlier, Alibaba made its presence felt in Thailand by launching its fin-tech affiliate Ant Small Micro Financial Services Group and buying a 20% stake in Ascend Money, owned by Charoen Pokphand Group.