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E-Commerce Meets Smart Cities: Expanding the Digital Silk Road in ASEAN

bangkok-1280

29 Aug E-Commerce Meets Smart Cities: Expanding the Digital Silk Road in ASEAN

E-commerce and “smart cities” initiatives in ASEAN are increasingly being co-developed by both Chinese and ASEAN players as part of the larger “digital silk road”. What are the implications for ASEAN? A recent case study in Thailand reveals a two-fold answer: ASEAN must align national development goals to be compatible with and welcoming to Chinese strategy, but more importantly, they must also ensure that Chinese involvement serves ASEAN’s own interests.

Digital Hub in Thailand’s Eastern Economic Corridor

Bangkok is becoming a major focal point in ASEAN for Chinese e-business investors. In April this year, Alibaba Group Holdings entered into a US$352 million private-public partnership (PPP) to establish a smart digital hub in Thailand’s Eastern Economic Corridor (EEC).

The hub will serve as a highly digitalised distribution centre to boost agricultural and other exports from Cambodia, Laos, Myanmar, Vietnam and Thailand (CLMVT) to an eager Chinese consumer market, leveraging on Alibaba’s “logistics network and technologies in big data and artificial intelligence for customs procedures”.

Alibaba’s partnership with Thailand underscores the intersection between the development of smart cities and efforts to boost e-commerce. Furthermore, the project specifically aims to build capacity on the ground: training future e-business minds, granting greater access of small and medium enterprises (SMEs) to the digital economy, and digitising tourism. These are seen as the building blocks of an advanced EEC integrated into the Chinese-led regional digital economy, with potential future spillover effects in promoting data-driven, sustainable smart city networks in Thailand.

Aligning with National Development Goals

China’s e-commerce push in Thailand has amazing synergy with Thailand’s national development goals. This seems to be an intentional strategy by Bangkok. “Thailand 4.0” is Bangkok’s ambitious plan to establish its economy as a future-ready “digitally powered ecosystem”, which is expected to grow to US$37 billion by 2025.

Thailand plans to advance this goal by creating “no less than 100 smart cities within its borders over the next two decades”. Existing pilot programs in Phuket, Chiang Mai and Khon Kaen, kickstarted internally by the Thai government, have been ongoing since 2016. With Alibaba’s involvement, four more projects within Thailand’s EEC will begin this year – Bangkok, Chonburi, Rayong and Chachoengsao.

Thailand is encouraging inter-agency collaboration to link e-commerce to “smart city” initiatives at the master planning level. Thailand’s Digital Economy Promotion Agency (DEPA), the National Smart City Committee (NSCC), the Ministry of Digital Economy and Society (MDES), the Ministry of Energy (MOE) and the Ministry of Transportation (MOT) are all working in tandem to ensure the long-success of the EEC.

Thailand has positioned itself well by tapping into the intersection of e-commerce and “smart city” initiatives. By demonstrating compatibility with China’s integrated strategy in expanding its “digital silk road”, Thailand has marketed itself as a lucrative hub for “one-stop” Chinese investments, attracting Chinese support for its existing EEC plans and effectively turning around a previously investment-poor effort.

Other ASEAN countries keen on attracting China’s digital infrastructure and capacity-building investments should emulate Bangkok’s foresight in leveraging the expanding “digital silk road”, finding ways to align China’s interests and goals with their own.

 

Singapore is chairing ASEAN at a time when there are new risks posed to economic growth. A new investment landscape is emerging in ASEAN with businesses capitalising on sustainable infrastructure and technology, and the digital economy is also unfolding at an unprecedented pace. Finance Minister Heng Swee Keat and industry experts will discuss these and other issues at our 11th ASEAN and Asia Forum: Charting ASEAN towards a Sustainable and Digital Future on Thursday, 30 Aug 2018, at The Ritz-Carlton, Millenia Singapore.

 

 

Sources

Beijing’s Silk Road Goes Digital [Council on Foreign Relations, 6 Jun 2017]

Thailand Dreams of 100 Smart Cities [Investvine, 4 Mar 2018]

Thailand’s smart cities to herald in Thailand 4.0 [The ASEAN Post, 4 Mar 2018]

Thai Government partners with Chinese tech giant to boost digital trade [OpenGov, 23 Apr 2018]

China’s Alibaba Group investing millions in Thailand – signs 4 MOUs [eTN Thailand, 20 Apr 2018]