From restaurants to flower markets, new businesses with ties to Chinese investors are springing up in Bangkok’s Chinatown districts, soaking up the profits Thai merchants had hoped to see as tourists from China returned post-pandemic, sellers say .
When China reopened its borders to international travel in early January ahead of the Lunar New Year, Thai businessmen and merchants hoped a flood of Chinese tourists would revive businesses devastated by the COVID-19 outbreak.
Lately, however, mainland Chinese investors have stepped in and pounced on the outbound tourism market. They have been pouring money into Bangkok and circumventing tougher investment rules for foreigners by persuading Thais to act as nominees on business license applications, locals complain.
They say that as a result, shops and restaurants backed by Chinese entrepreneurs have sprung up in the Yaowarat and Huai Khwang districts, where the two Chinatowns of Thailand’s capital are located.
New hotpot restaurants and supermarkets, selling everything from Ma La, a mouth-searing sauce made with Sichuan peppercorns and chili, to instant noodles imported from China, are putting pressure on local businesses by raising fees. four times as much commercial rent, Chinatown sellers and others say.
A similar trend is happening at Thailand’s largest wholesale flower market along the Chao Phraya River, Bangkok’s main waterway.
“Local businesses cannot afford to pay rents that start at 200,000 baht per month (US$5,860). In the past, it was around 50,000 to 100,000 baht a month only,” a local man, who has run a gift shop in Yaowarat for seven decades, told BenarNews. He requested anonymity for fear that his comments could turn off potential customers.
“It is difficult for local people to run their businesses due to lack of funds.”
The tourism industry is an engine of Thailand’s economy, but it is heavily dependent on the dollars spent by visitors from mainland China. Thailand is among the world’s most popular destinations for Chinese tourists.
In 2019, the year before the pandemic, more than a quarter of the nearly 40 million tourists were from China, according to Thai tourism officials. That year alone, Chinese tourists spent about 522 billion baht ($15.3 billion). By 2023, the Tourism Authority of Thailand predicts that up to 8 million Chinese tourists out of 30 million foreigners will visit Thailand.
thai people complain
Known as Chinatown 2, Huai Khwang has seen more than 60 new hot food restaurants with links to Chinese nationals set up along Pracharat Bamphen Road in recent months, according to Prapret Hankijjakul, a member of the Bangkok Metropolitan Council who represents the district. .
A survey by his office found that around 3,000 Chinese citizens lived in the neighborhood.
“They go back to China and they go back to Thailand again with business funds. They ask Thai people to join their business because it is easier to use Thai names to operate it,” Prapret told BenarNews.
“In Huai Khwang, they don’t have a problem with business documents because the district administration encourages all business operators to comply with the law,” he said. “However, it is not clear if they all have work permits.”
The operator of a Chinese hotpot restaurant in Huai Khwang who gave his name only as Wang said he did not know how to obtain a work permit even though he opened the business with his Thai partners in early February. He refused to give his full name because he does not have a permit.
Wang, who has a Thai girlfriend, has actually lived in Thailand for more than 14 years. He has a 46% stake in the new Hotpot joint venture with his Thai partners.
“Ma La is a stew formula originating from China. I want every customer to try authentic Chinese food. It’s more like an alternative option for Thai people. I don’t intend to compete with the Thais,” said Wang, 40.
But Lek, a 52-year-old Thai grocery store owner who grew up in Huai Khwang, is wary of the influx of Chinese money.
He recalled becoming irritated when Thai real estate agents took prospective Chinese buyers to view his home, a prime business location, and when they asked him how much money he wanted for it.
“I insisted that I would never sell it to those Chinese businessmen, for sure,” Lek said. “There were so many times that Thai agents brought Chinese to my house, asking if I wanted to sell them. They thought it was worth the business and they wanted it.”
On the other hand, he said, the injection of money into the district by Chinese investors promises to rejuvenate the area and make it livelier, as well as create more income opportunities for the local population.
Real estate agents in the Chinatown districts declined to be interviewed for this report.
Authorities investigate complaints
Thailand’s foreign business law stipulates that restaurants and businesses that sell agricultural products are reserved almost exclusively for Thais. If foreigners want to invest in such businesses, they must have a minority stake in a joint venture with Thai partners. Lately, however, Chinese investors have been circumventing the rules by using Thai “nominees” to take a majority stake on their behalf and provide their Thai partners with the investment money.
Earlier this year, some Thais filed a complaint with local authorities about the inflow of Chinese funds, leading to investigations and some arrests.
“As a result, the immigration police, the tourism police, the special branch police, work with the local police and relevant agencies, including the ministry of labor and the ministry of commerce, to inspect the business and enforce the status. of law,” said Police Major General Achayon. Kraithong, a spokesman for the Royal Thai Police.
In late January, Achayon said, officials from the Immigration Bureau searched Chowchan O-cha, a Chinese restaurant in Huai Khwang, and arrested three Chinese nationals who were allegedly working there without proper documents.
The officers took them and the owner into custody. The Chinese nationals were charged with working in Thailand without permits and would be deported to China after their trial, authorities said.
In addition, the Ministry of Commerce recently said it was investigating some 200 businesses and companies in Yaowarat and Huai Khwang on suspicion of having unauthorized links with Chinese investors.
‘Thai flowers are more beautiful’
Aside from Bangkok’s Chinatowns, vendors at Pak Khlong Talat, the wholesale flower market on the Chao Phraya River, say they are also being hit by the downside of money coming in from Chinese investors.
Thanks to a new high-speed railway, running from China to the border with Laos, flowers, fruits and vegetables from China are flooding Thai fresh produce markets at competitive prices, a local flower vendor said.
A florist nicknamed “Namwaan” said she saw dozens of Chinese-owned shops set up in the market in recent months.
“China’s flowers flood Thailand since China reopened its borders. Thai flowers are more beautiful, but customers prefer imported flowers because of the size. They are bigger and can stay longer at the similar price. It is very difficult for Thai people to stay strong,” Namwaan told BenarNews.
BenarNews, an online news service affiliated with Radio Free Asia (RFA), produced this report.
