Thai Chinese - Trade and Industry

Trade and Industry

British East India Company agent John Crawfurd used detailed Company censuses kept on Prince of Wales's Island (present-day Penang) from 1815 to 1824 to report specifically on the economic aptitude of the 8585 Chinese there as compared to others. He uses the data to estimate the Chinese — about five-sixths of whom were unmarried men in the prime of life — as equivalent to an ordinary population of above 37,000, and ...to a numerical Malay population of more than 80,000!. He surmised this and other differences noted as providing, "a very just estimate of the comparative state of civilization among nations, or, which is the same thing, of the respective merits of their different social institutions." Of the five billionaires in Thailand in the late 20th century, 100 percent were all ethnic Chinese or of partial Chinese descent. On 17 March 2012, Mr. Chaleo Yoovidhya, of humble Chinese origin, died while listed on Forbes list of billionaires as 205th in the world and 3rd in the nation, with an estimated net worth of US $5 billion.

Mid-twentieth-century Thailand was isolationist, its economy mired in state-owned enterprises. Over the next several decades, internationalization and market-oriented policies led to the dramatic emergence of a massive export-oriented, large-scale manufacturing sector, which in turn jump-started the economy joining the Tiger Cub Economies. Economic impact remains out proportion to their numbers. Virtually all of the new manufacturing establishments were Chinese controlled. Despite Thai-affirmative action based policies in the 1930s, 70% of the retailing outlets and 80 to 90 percent of the rice mills were controlled by ethnic Chinese. A survey of Thailand's roughly seventy most powerful business groups found that all but three were owned by Thai Chinese. Although Bangkok has its own Chinatown, Chinese influence is much more pervasive and subtle throughout the city. The Chinese control more than 80 per cent of companies listed on the stock market. Kukrit Pramoj, the aristocratic former prime minister and distant relative of the royal family, once said that most Thais had a Chinese "hanging somewhere on their family tree." In Thailand it is said that 50 ethnic Chinese families controlled most of the country’s business sectors or 81 to 90 percent of the overall market capitalization of the Thai economy. Highly publicized profiles of Chinese enterprise attracted great public interest and were used to illustrate the community’s strong economic presence. More than 80% of top 40 richest people in Thailand are Thai of full or partly Chinese descent. It is estimated that roughly 4% (~400,000 individuals) of Thai Chinese family are USD millionaires (USD 1 million or more of liquid financial assets such as cash and stocks. Other financial assets are held in commodities, as well as minor financial market securities such as hedge funds, private placements, and bonds are utilized to shield uncertain economic conditions such as hyperinflation.) Thai Chinese entrepreneurs are influential in the sectors of real estate, agriculture, banking and finance, as well as wholesale trading. From an economic standpoint, Overseas Chinese are seen as a fraction of the wealth they have created and added to the host country's economy, and representing what the Chinese have spent on themselves and their families. In the late 1950s, ethnic Chinese comprised 70% of Bangkok's business owners and senior business managers and to 90 percent of the shares in Thai corporations are said to be held by Thais of Chinese extraction. 90 percent of Thailand's industrial and commercial capital are also held by ethnic Chinese. 90% of all investments in the industry and commercial sector and at least 50% of all investments in the banking and finance sectors is controlled by ethnic Chinese. Economic advantages would also persist as Thai Chinese controlled 80 to 90 percent of the rice mills, the largest enterprises in the nation. In 1890, despite British shipping domination in Bangkok. Chinese conducted 62 percent of the import-export business, operating for agents for Western shippers as well as their own. They also dominated rubber industry, market gardening, sugar production, and fish exporting.

Of the 25 leading entrepreneurs in the Thai business sector, 23 are ethnic Chinese or of partial Chinese origin. Thai Chinese also control 96 percent of Thailand's 70 most powerful business groups with the exceptions being the Thai Military Bank, the Crown Property Bureau, and a Thai-Indian corporation. Family firms are extremely common in the Thai business sector as they are passed down from one generation to the next. 90 percent of Thailand’s manufacturing sector and 50 percent of Thailand’s service sector is controlled by ethnic Chinese. According to a Financial Statistics of the 500 Largest Public Companies in Asia Controlled by Overseas Chinese in 1994 chart released by sociologist Dr. Henry Yeung of the National University of Singapore, 39 companies were concentrated in Thailand with a market capitalization of 35 billion and total assets of 94 billion US. In Thailand, ethnic Chinese control the four largest private banks, of which Bangkok Bank is the largest and most profitable private bank in the region.

Following the 1997 Asian financial crisis, structural reforms imposed by the International Monetary Fund (IMF) on Indonesia and Thailand led to the loss of many monopolistic positions long held by the ethnic Chinese elite. Nevertheless, Thai Chinese are estimated to own 60 percent of the national trade, 90 percent of all local investments in the commercial sector, 90 percent of all local investments in the manufacturing sector, and 50 percent of all local investments in the banking and finance sector.