prasarn trairatvorakul : thai economy – tapping the untapped opportunity speech by dr prasarn trairatvorakul, governor of the bank of thailand, at the inauguration of the rmb clearing bank in thailand and 5th year celebration of the icbc ( thai ), bangkok, 22 april 2015. * * * 1. your excellency ambassador ning fukui, chairman jiang, chairman hu, dr. zhigang li, distinguished guests, ladies and gentlemen, thank you for the invitation to give a few remarks on the occasion of the inauguration of icbc ( thai ) as the official renminbi clearing bank here in thailand. 2. this development of the rmb clearing bank in thailand and certainly also to celebrate the 5th anniversary of icbc ( thai ) is in fact the result of the long and continued ties between china and thailand. it has marked another important step in further development of our financial ties following the signing of the renminbi – thai baht bilateral swap agreement and the memorandum of understanding with the people ’ s bank of china on the establishment of the renminbi clearing arrangements in december 2014. 3. today, i was invited to talk about thai economy. so i am pleased to have the opportunity to share with you some of my observations on the current state of the thai economy. let me humbly start from some of the challenges we are facing, the economy is currently reeling from both internal and external headwinds. internally, the stagnant technology and labour readiness has so far taken a toll on thailand ’ s economic expansion. also, the improvement of domestic consumption and investment are slow due to a cautious private sector ’ s confidence. externally, thai economy is affected by the current uneven recovery of global economy which hinders thai export growth. however, thai economy is expected to recover up to 3. 8 % gdp growth this year from a mere 0. 8 % last year. private consumption and the government expenditures will play key roles for 2015 outlook. 4. on the bright side, thailand has been riding on the back of china ’ s economic prosperity. in other words, the regional prospect has pinned on improvement in intraregional trades of goods and services. china ’ s economic figures may be somewhat lower than its historical average, as a result of the sluggish recovery of the global demand and the continued structural reform in china. however, china growth rate is still at a satisfactorily high

as reflected in the world bank ’ s latest logistics performance index. thailand has, therefore, been a natural gateway that links extra - regional economies to asean markets. thailand has advantages to be a hub for regional headquarters of multinational companies ; a hub for logistics and distribution activities ; a sourcing hub for regional markets ; and a financial hub for regional markets. however, to remain competitive as a regional hub is a challenging task. bis central bankers ’ speeches 14. to remain as the preferred hub and entry point of the region, we perceive an opportunity for investment from china which has the advantage in capital, construction capacity and technology. as the advantage of low cost factor of productions is rapidly declining, china is facing an urgent need to re - orient supply chains through thailand to enter asean and the greater mekong subregion ( gms ) in particular. china and thailand should therefore make every effort to grasp this opportunity and construct win - win solutions for both sides. ladies and gentlemen, 15. let me conclude that china economic prosperity and advancement provides wide range of untapped opportunities for thailand. they are right here where we are now, in our region. we should seize it and not miss it. and i am confident that so long as we work hand in hand with china, unite together, and embrace the merit of economic integration, the synergy of the two will surely give its fruit on the growing tree. thank you. bis central bankers ’ speeches