ថៃជំរុញឱ្យជំរុញការវិនិយោគ ការនាំចេញ និងការកែទម្រង់សេដ្ឋកិច្ចឱ្យស្របជាមួយប្រទេសវៀតណាម
TDRI warns Thailand risks losing FDI, especially in high-tech upstream sectors; it urges reforms in wages, skills, R&D, and easing regulatory barriers.
Foreign direct investment (FDI) in Vietnam continued to expand strongly in the first half of 2025, according to data from the Ministry of Planning and Investment monitored by Thailand’s Department of International Trade Promotion (DITP).
Between January and June, Vietnam attracted US$21.51 billion in FDI, up 32.6% from the same period last year. The total comprised 1,988 new projects worth US$9.29 billion, 826 capital expansion projects worth US$8.95 billion, more than double the previous year, and 1,708 deals in which foreign investors acquired shares in Vietnamese firms worth US$3.28 billion, a 73.6% increase.
The manufacturing and fisheries sector absorbed the largest share, at US$12 billion, followed by real estate (US$5.17 billion), professional, scientific and technical activities (US$1.18 billion), and water supply and waste management (US$902.9 million).
Singapore topped the list of new FDI sources, investing US$2.41 billion, trailed by China (US$2.13 billion), Sweden (US$1 billion), Japan (US$832.3 million) and Taiwan (US$725.8 million). Thailand ranked 14th out of 92 investing countries, with US$59.4 million in new projects.
Meanwhile, applications for investment promotion through Thailand’s Board of Investment (BOI) also surged in the same period. In the first half of 2025, 1,369 FDI projects applied for BOI incentives with a combined investment of 737.6 billion baht, a 132% increase year-on-year.
Foreign projects accounted for 73% of all applications (1,880 in total) and 70% of the total investment value of 1.05 trillion baht.
By number of projects, the leading sectors were metals and materials (285 projects, 21%), machinery and automotive (269 projects, 20%), and electrical appliances and electronics (255 projects, 19%).
In terms of investment value, the digital industry dominated with 410 billion baht (56%), followed by electronics and electrical appliances at 125.6 billion baht (17%) and metals and materials at 59.9 billion baht (8%).
South Korea and China show less interest in investing in Thailand
Nonarit Bisonyabut, senior researcher at the Thailand Development Research Institute (TDRI), said global competition for foreign investment has become clearer in direction, with many countries implementing evidence-based policies that will drive rapid economic development in the future, such as effective civil service reform.
Thailand, however, despite being aware of its structural problems and academic proposals for reform, often fails to implement changes. This, he noted, continues to drag down the country’s economic potential.
Current government projects also tend to focus on short-term populist cash handouts or unsustainable economic initiatives such as cannabis liberalisation, casinos, and alcohol deregulation, which pose significant social and health risks. Even large-scale plans like the land bridge project have been deemed uneconomical in several studies, he said.
Looking ahead, Narit warned that both China and South Korea appear to be turning their investment focus towards Vietnam, which has branded itself as a rising winner in the digital era. China is also expected to emerge as a global leader in artificial intelligence alongside the United States. Without reforms on par with Vietnam, Thailand risks falling behind and losing competitiveness.
Three weaknesses Thailand must address to attract FDI
According to the ASEAN FDI Attractiveness Index, Thailand must improve in three key areas to strengthen its appeal to foreign investors:
Labour and wages – Wages must be aligned with productivity. As Thailand’s average income is higher than Vietnam’s, labour costs are naturally higher. This means Thai workers must deliver higher productivity to justify the wage gap.
Talent and innovation – Thailand needs to enhance research, development and innovation capacity. This includes attracting global talent in future-oriented industries such as artificial intelligence, semiconductors, medical technology, and future food. It also requires stronger support for R&D activities and technological advancement.
Regulations and governance – Outdated or unnecessary regulations should be eliminated to reduce barriers to investment. Policies must promote fair competition, limit the discretionary power of officials, and tackle corruption, which undermines Thailand’s business image. These issues require serious reform to restore investor confidence.
Vietnam’s mega projects raise pressure on Thailand to keep pace
Kriangkrai Thiennukul, chairman of the Federation of Thai Industries (FTI), warned that Vietnam’s aggressive infrastructure push could leave Thailand trailing in regional development if no decisive action is taken. He noted that every ASEAN economy is now competing fiercely to attract investment.
Vietnam has unveiled an infrastructure investment plan worth 10% of its GDP, about 1.5 trillion baht, aimed at driving economic growth to 8% in 2025 and elevating the country to high-income status by 2045. Kriangkrai said this should serve as a wake-up call for Thailand.
Although Vietnam’s plan may not immediately affect Thailand, as mega projects typically take three to five years to implement, the clarity of its long-term vision has already drawn international attention. This could prompt investors who have yet to commit to hold off until they see how Vietnam’s projects progress.
At the same time, regional competitors are also stepping up. Singapore, in partnership with Malaysia, has launched the Johor–Singapore Special Economic Zone (JS-SEZ) to leverage the strengths of both countries, improve business efficiency and attract foreign capital.
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