KBank teams with Thai-Japanese Association and Japanese Chamber of Commerce, Bangkok, to host a seminar aimed at strengthening cooperation in bracing for global trade challenges

Mr. Pipit Aneaknithi, KBank President, said that Japan plays a pivotal role in transforming Thailand' s economy, particularly in the automotive and electronics industries- making Thailand a regional production hub for both industries. Amidst the uncertainties of the global trade landscape, the strategic alliance between Thailand and Japan stands as a testament to the power of cooperation. By deepening our collaboration in key sectors such as technology, sustainability, and manufacturing, we can solidify our position on the global stage. The path forward requires a continued commitment to open dialogue, strategic collaboration, and a shared vision for a sustainable future.

Thailand and Japan have a long-standing and strong relationship, especially in the manufacturing sector. Over the past 40 years, cumulative investment from Japan to Thailand has amounted to approximately 4 trillion-baht, accounting for 40% of total foreign direct investment (FDI) in Thailand. This cooperation between Japan and Thailand is a crucial foundation in facing global trade uncertainties. Amid the pressures of the new "America First" trade war, both Thailand and Japan are at risk due to their trade surpluses with the United States. Meanwhile, the Global Minimum Tax is eroding the effectiveness of tax incentives, intensifying competition significantly. China has emerged as the world's leading car exporter, signaling rapid changes in the industry. Under such circumstances, strengthening Thailand-Japan cooperation becomes even more crucial.

In terms of policies and plans for the new round of trade wars, the Thai government recognizes the importance of Japanese investment in driving Thailand to become Asia's automotive and electronics production hub. The government understands the needs of Japanese businesses and is ready to address the issues they are facing. Thailand and Japan can jointly overcome the challenges of trade tensions and geopolitical changes by building a resilient economy that emphasizes innovation and environmental friendliness. Key government policies include reducing excise taxes for hybrid cars, promoting the use of locally produced parts, supporting digital and sustainable businesses, enforcing strict laws to protect domestic manufacturers, facilitating business operations, reducing air pollution, and developing human resources. Additionally, the government aims to expand trade cooperation through free trade agreements (FTAs) with various countries to strengthen trade and increase the resilience of the country's economy, including using Thailand as a strategic hub for Japanese businesses in ASEAN.

Furthermore, revitalizing domestic consumption and strategizing responses to changes in U.S. trade policies are essential, particularly in managing the short-term influx of Chinese goods. In the medium to long term, the government must upgrade Thai industries, develop education and human resources, and formalize the informal economy. Creating a fair and competitive market environment with clear regulations and consistent enforcement is crucial for investors, especially foreign investors. Additionally, promoting the use of clean energy and developing smart cities will be key. The cooperation between Thailand and Japan will be a fundamental foundation in facing future trade and geopolitical challenges, creating a more resilient, innovative, and environmentally friendly economy for Thailand.

Mr. Pipit concluded by stating that the Thailand-Japan relationship is a key mechanism Mr. Pipit concluded by stating that the cooperation between Thailand and Japan is a crucial mechanism for driving the economies of both countries towards mutual progress in the future. Thailand needs to transition to a sustainable economy with advanced technology amidst the volatility of the global trade landscape. Thailand and Japan will promote cooperation in innovation, technology, and sustainability for the benefit of both countries, as well as the ASEAN community. The relationship between Thailand and Japan remains strong, and we look forward to creating a prosperous future for the next generation.