What are they talking about on the world stage? Top Jirayus points out that Thai people need to know that Thailand’s economic survival is not swallowed up by superpowers

Top Jirayut Sapsisopa, founder and CEO of Bitkub Capital Group Holdings Ltd., summarized all the key points of attending the World Economic Forum 2024 Annual Meeting of the New Champions in Dalian. The People’s Republic of China There were some issues and things that Thai people need to know at the World Leaders Forum last June. Be prepared to adapt to technological changes and regional competition.

The first point that every Thai needs to know is that by 2025, all ASEAN member states will jointly sign the ASEAN Digital Economy Framework Agreement or DEFA (Digital Economy Framework Agreement) to jointly develop the digital economy in the ASEAN region, making it a unified region with a total population of more than 600 million. This will make ASEAN the fourth largest economy in the world and will attract a large amount of digital economy funds into the region. Thailand plays an important role in hosting the negotiations (negotiating share) of this framework agreement. The signing progress has exceeded 50%, which will bring about the use of digital technology to change trade (Trade Digitalization) and establish borderless connections between ASEAN member states, especially in these 3 major areas.

1. The free flow of payments or the liquidity of payments means that payments can be connected together. Cross-border payments in ASEAN will have the same potential as PromptPay remittances, covering the entire region. But there are still many issues that require further consensus among member states, such as data flow, cybersecurity, emerging technologies, etc., and common solutions must be found.

2. The free flow of goods and services or the flow of goods and services is a single electronic link system or “ASEAN Single Window” that will support the smooth trade of goods or services between ASEAN member states. However, the same standards must be established for imports or exports. Including fees and various laws and regulations, the General Customs Department further cooperates

3. The free movement of people or the mobility of human resources is the movement of population. In the ASEAN region, there will be more exchanges between each other in the form of talent flow, whether it is cross-border work or traveling in the ASEAN region with one passport or one visa like in the European region.

DEFA agreements for various technologies such as artificial intelligence, big data, 3D printing, and the Internet of Things have changed and developed rapidly. It took a long time to reach a consensus. Therefore, the agreements in these areas leave some room for adjustment and flexibility to support the emergence of new technologies in the future.

DEFA is considered an important agreement because it is legally binding (all parties are legally bound) and can effectively make the parties to the agreement move forward with the same cooperation framework as “ASEAN”, thus attracting the attention of investors and developers. Entering the ASEAN region from all over the world It is estimated that 60% of the signing of this DEFA alone can bring more than US$2 billion (about 72 billion baht) to the region. In addition, relative growth rates or relative growth rates. Each country will have unequal growth, for example, Indonesia may grow 1.5 times, while the Mekong region countries may grow 1.5 times. Countries such as Laos, Myanmar and Cambodia have the opportunity to grow 3-5 times, and DEFA will benefit small countries with higher growth opportunities.

The main reason for cooperation is to expand the size of small countries. Have a greater voice and stronger bargaining power. The geopolitical situation (geopolitics) has now moved from a unilateral system (unified system) with the United States as the big brother, everyone reconciled and grew together, to the era of a multilateral system (multilateral system) with the European zone and China step by step. To play a role side by side with the United States, a small country must find a way to cope with coexistence with various superpower groups.

At the World Forum meeting, the strategies of small or minor countries to deal with superpowers were summarized into the following three practices.

1. Become a price taker: Singapore adopts this approach. It is like a “poisonous shrimp” that cannot hurt people. But if you eat it, it will make the eater sick. This means recognizing that small countries cannot change the behavior of big countries. You can only accept the decisions of big countries. But at the same time, it also reduces the risk of direct confrontation.

2. Bicycle diplomacy: This strategy emphasizes agility and adaptability. It is like a bicycle that can maneuver between large trucks that collide with each other. When large countries clash, small countries can find ways to survive. But the disadvantage is that it may not promote overall development. Because the focus is only on survival.

3. Building credibility to balance power (breaking the big lock) This approach emphasizes building credibility through leaders who have vision, knowledge, and the ability to present important facts. It gives small countries a voice on the international stage.

However, each strategy has its own advantages and disadvantages. The choice depends on the context and circumstances of each country. Smaller countries may need to combine these strategies to effectively meet challenges on the international stage.

For 200 years, the world has evolved from regional integration (regionalization) to globalization (globalization), but there is currently a change that tends to return to regionalization is another important opportunity for small countries to enhance their bargaining power. Small countries need to unite to build bargaining power on the world stage. ASEAN is a good example of integration through the DEFA agreement, which will help create greater scale and movement for small countries to have a greater voice.

In addition, AI is another bargaining power of powerful countries. Because developing the AI ​​base layer requires huge investment. Small countries will not be able to invest on their own and must rely on the infrastructure of the three superpowers: the open AI of the United States, the state-dominated AI of China, and the closed system of Europe. They may be weaponized because they need to. Relying on the development and use of AI on one system gave rise to the idea. Regionalization, countries in the region should work together to develop regionalized AI, such as ASEAN AI, to reduce dependence on superpowers and create technological independence.

The return to regionalization is both a challenge and an opportunity for small countries. Regional economic and technological integration will be the key to strengthening and reducing dependence on superpowers. At the same time, it must maintain a balance in its interaction with superpowers such as China, which continue to have a huge influence on the global economy.

The economic separation between the East and the West has led to the distribution of supply chains further away from China, giving rise to the concept of “China plus one”, but China still plays an important role in the global economy, accounting for only 5%. China’s growth is still greater than that of India and Japan combined. This year, China is expected to grow by 5.3%, with an impact on world GDP of up to 18%, while the impact on the entire Middle East is only 4%, so the world economy still depends on China. And China can continue to move forward in the future.

In addition, Premier Li Qiang proposed five strategies to boost China’s economy and contribute to the development of the world economy at the meeting, including one short-term measure and four long-term measures, as follows:

1. Consolidation is a short-term strategy that focuses on creating stability for the economic foundation. It stimulates consumption through policies at both the macro and micro levels, with a focus on “cleaning up” to create long-term sustainability. This approach reflects China’s efforts to lay a solid foundation for future growth.

2. Digital Revolution: China is aiming for the Fourth Industrial Revolution, focusing on cutting-edge technologies such as artificial intelligence, big data, 3D printing, the Internet of Things, and blockchain, with the goal of creating new markets (blue oceans) and improving production efficiency. Unleashing new productivity and market opportunities. In addition, China is open to foreign investment in the field of research and development (R&D), aiming to grow together.

3. Green development: China attaches importance to environmentally friendly development. Especially the electric vehicle (EV) industry, which aims to develop Smart, Internet Based, Energy Conserving Vehicle cars that can update new software at any time like the iPhone. BTS was invited to speak on multiple stages this year. This may begin to become a turning point for electric trains. China currently exports only 16% of its electric vehicles, while Germany exports 80%, and demand is expected to reach 45 million by 2040, which gives China great growth opportunities in this market.

4. Openness and cooperation: China advocates fair competition and win-win results in international business. The focus of this concept is to make the economic “pie” bigger and achieve mutual benefit for all parties.

5. Inclusive growth: Under the concept of “leaving no one behind”, China is committed to cultivating human resources that can adapt to changes and promote diversity, equality and participation in society (diversity, fairness and inclusion)

Despite the decoupling between China and the West, China’s role in the global economy remains important. Investment in China may slow down in the short term, but in the long run, China remains a market with great potential and influence on the global economy. These strategies demonstrate China’s efforts to adapt to and respond to the challenges of a turbulent global economy. It focuses on domestic development and international cooperation. It continues to maintain its important position on the world economic stage.

Vietnam is becoming one of the standout countries in the ASEAN region, with growth reaching 8% in 2022, followed by 5% in 2023, and expected to grow to 6% in 2024. A higher rate than China. In the short term, Vietnam has kept household debt at a very low level and has been able to control inflation. Including the country’s 4 million tons of rice reserve (Rice Reserve), and reducing corporate interest to obtain lower operating costs. With these short-term strategies, Vietnam has a solid foundation.

In the long run, Vietnam shares the same vision with China in four aspects: digital, green, open and inclusive, emphasizing the adjustment of laws and policies to keep pace with the world. This includes focusing on investing in new infrastructure such as artificial intelligence, big data, 3D printing, air Internet, Internet of Things and blockchain, which will help Vietnam develop rapidly. In particular, the production and development of Vietnam’s labor force can train up to 500,000 students in science and technology every year, which is consistent with the 16% growth of Vietnam’s digital economy business this year.

Another thing that Thais must know is that the Vietnamese Prime Minister announced at the meeting that Vietnam is now able to successfully produce high-quality low-methane rice, and the production of this rice can reduce methane emissions. If the EU or CBAM (Carbon Border Adjustment Mechanism) measures to adjust carbon prices before crossing the border are strictly implemented, then when will they be implemented? Therefore, Vietnamese rice can be easily exported to Europe and the United States. Thai jasmine rice may not be exported to these countries, or may face huge import tariffs. In this way, Thai rice exports may immediately lose to Vietnam. This is something that Thailand must urgently review.

First, the Thai people must understand and be prepared for the upcoming DEFA agreement. Under the concept of “Strong ASEAN People”, ASEAN must unite and become a strong force. Because the trend will be from globalization to regionalization in the future, Thailand should be ready to join DEFA and negotiate to gain the maximum benefits. Build bargaining power in the ASEAN region

Including urgently adapting by considering the strategies of China and Vietnam to lay a solid foundation for Thailand. Prepare to accelerate the resolution of household and government debt. Prepare for an aging society (Aging Population) and an aging economy (Silver Economy), create inclusive growth, and leave no one behind.

Another important issue is the development of human resources (human capital). Thailand must promote people to have skills (skill sets) that are in line with the direction of world development. Support the upcoming changes and new opportunities. Including upgrading the Ministry of Digital Economy and Society (DES) to a Class A department, carefully promoting science and technology (Scientech), so that Thai people are ready to compete in the digital economy market, and upgrading the Ministry of Natural Resources and the Ministry of Environment will also become a Class A department, carefully managing green development, focusing on issues such as carbon pricing, carbon tax, net zero, climate technology, green loans, green transformation and green finance to help Thai entrepreneurs adapt to keep up with global trends. Especially in Thai rice production.

These preparations will help Thailand meet future challenges and become an economically and socially strong nation, ready to compete effectively on the world stage.