The ASEAN-Japan Centre (AJC), led by Secretary General Kunihiko Hirabayashi, is a key player in strengthening the economic relationship between Thailand and Japan. In this conversation, Hirabayashi explores areas of cooperation, including Japan’s major investments in Thailand’s manufacturing, green energy, and technology sectors. He also highlights the AJC’s efforts in promoting new opportunities in renewable energy, sustainable tourism, and the Bio-Circular-Green Economy (BCG) Economy, all of which contribute to Thailand’s growth and its strategic importance within ASEAN.
Bridges: What are the most significant areas of collaboration between Thailand and Japan today?
Hirabayashi: Thailand and Japan have a dynamic partnership that extends across various sectors. Particularly, the five-year joint action plan for 2022-2026 outlines some of the recent important collaborations between the two countries. For one thing, Japan is a significant investor in Thailand, with around 6,000 Japanese companies operating there. Moreover, the “Thailand-Plus-One Strategy” allows Japanese companies in Thailand to extend their supply chains to neighboring countries, further expanding their business reach. Through trilateral cooperation, Japanese firms can provide technical assistance and promote economic development in the Mekong region as well. In addition, the joint action plan aims to enhance the business environment, promote investment, develop human resources, and foster the growth of smart industries, SMEs, and start-ups.
Meanwhile, the huge number of Japanese firms in Thailand have resulted in lucrative investments in the country, with Japanese foreign direct investment constituting about one-third of the total accumulated foreign direct investment in Thailand. In 2023, Japan was the second-largest investor in Thailand, accounting for 19 percent of all foreign investment projects. Japanese investments primarily target key industries such as automotive and automotive parts, petrochemical and chemical products, and electrical appliances and electronics.
Outside of economic partnerships, Japan and Thailand also collaborate in other fields, such as space, science, technology, and innovation; the development of Thailand’s Special Economic Zone and Eastern Economic Corridor (EEC); and the Bio-Circular-Green (BCG) Economy. For its green economy initiatives, Thailand is keen to partner with Japan to achieve carbon neutrality while fulfilling its energy needs by utilizing alternative, renewable resources and clean energy technologies, such as hydrogen power and electric vehicles.
Where do key opportunities lie for Japanese businesses in Thailand, and how is the ASEAN-Japan Centre facilitating these partnerships?
Thailand presents a multitude of opportunities for Japanese businesses, evident from the sheer number of Japanese ventures operating in the country. Also, Thailand’s Long-Term Resident (LTR) visa gives ample opportunities for wealthy global citizens, pensioners, remote workers, and highly skilled professionals to work and invest in Thailand. Targeted industries of the visa include automotive, electronics, affluent tourism, agriculture, food and biotechnology, automation and robotics, aviation, aerospace and space, biofuels and biochemicals, digital, medical, defense, and circular economy.
Among the top viable industries in Thailand are manufacturing, renewable energy, and tourism. The manufacturing sector in Thailand presents attractive investment opportunities for Japanese investors, especially since most manufacturing businesses are not on the restricted list of the Foreign Business Act and can be 100% Japanese-owned. Historically, Japanese companies have been significant investors in Thailand’s manufacturing sector, particularly in automotive production and assembly. Recently, Thailand’s Board of Investment (BOI) is actively promoting investments in the automotive industry, particularly in the production of electric vehicles (EVs)
The ASEAN-Japan Centre (AJC) facilitates Thailand-Japan partnerships by promoting investment, trade, and tourism through business matching, policy dialogues, research, and capacity-building programs.
Kunihiko Hirabayashi, Secretary General of the ASEAN-Japan Centre (AJC)
As mentioned in the five-year joint action plan, Thailand also aims to enhance the competitiveness of its industries through the BCG Economy Model, aligning with Japan’s Green Transformation (GX) efforts. This includes promoting new investments and business expansion in areas such as bio-circular-green industries, environment and energy for carbon neutrality, and smart agriculture and food processing. Collaboration involves R&D, technical experiments, and joint research.
Furthermore, tourism-related businesses present potential investment opportunities, with Japan being a top source of foreign tourists. The tourism industry accounts for a significant share of Thailand’s GDP, with the country welcoming more than 35 million visitors in 2024. After the pandemic, tourism businesses are increasingly aligning with sustainability efforts by addressing overtourism and promoting eco-friendly and “green” activities. By encouraging responsible tourism, these initiatives aim to attract environmentally conscious travelers and help foster a more sustainable travel industry.
The ASEAN-Japan Centre (AJC) facilitates Thailand-Japan partnerships by promoting investment, trade, and tourism through business matching, policy dialogues, research, and capacity-building programs. It connects Japanese investors with opportunities in Thailand, supporting sectors like manufacturing, renewable energy, and smart agriculture through FTA seminars, entrepreneurship programs, skill training, and networking events. AJC also promotes sustainable tourism by encouraging eco-friendly initiatives and responsible travel. Through these efforts, AJC strengthens economic ties between Thailand and Japan while ensuring long-term, sustainable growth.
How can Japan’s cooperation further support Thailand’s economic growth and role within ASEAN?
Thailand, as a founding member of ASEAN, has played a key role in regional economic affairs, from the establishment of the ASEAN Free Trade Area (AFTA) in 1993 to preparations for the ASEAN Economic Community (AEC) set for 2015. Thailand’s partnership with Japan has been instrumental in shaping its economic prospects and reinforcing its strategic position within ASEAN.
Thailand’s partnership with Japan has been instrumental in shaping its economic prospects and reinforcing its strategic position within ASEAN.
As an important source of foreign investments, Japan can actively support Thailand’s initiatives to reinvigorate economic growth. For example, Japanese investments directed to support advanced technology and automation can enhance Thailand’s manufacturing capabilities. Japan can also contribute in developing a skilled workforce and human capital that match the demands of Japanese employers in Thailand, through initiatives like the KOSEN education system to produce practical and innovative engineers, aligning with the “Thailand 4.0” vision.
Additionally, Japan can play a role in bolstering Thailand’s ties to its ASEAN neighbors by implementing Special Economic Zones (SEZs) and the Eastern Economic Corridor (EEC), as well as helping in the Mekong region development efforts. apan can support the development of these economic zones and projects by investing in targeted industries and key infrastructure, and offering technical assistance and institutional support to improve Thailand’s connectivity with its ASEAN neighbors. Furthermore, Japan and Thailand have also collaborated in providing third-country support, working with ASEAN nations to address development challenges in neighboring countries.
Finally, Japan is a strong advocate of ASEAN centrality, championing Southeast Asian sovereignty in regional discussions. As a result, Japan has become not only a key trading partner but also a significant diplomatic ally for Thailand and the rest of the ASEAN. By leveraging the Japan-Thailand cooperation, Japan seeks to enhance its assistance capacity and build stronger regional relationships in the region.
