The above extract is taken from a well-known article written by two student activists published in the Social Science Review. It sparked off an anti-Japanese movement in Thailand in the early 1970s and reflected the perceived position of Japanese firms in trading and manufacturing activities, especially in the production of consumer goods. At that time, the cumulative investment from Japan in the manufacturing sector promoted by the Thai government between 1960 and 1974 accounted for 29 percent of the total registered foreign capital which made Japan the largest investor. However, flow data recorded by the Bank of Thailand for the same period shows Japan to have been the second largest investor after the United States. It is believed that Japanese investment was under attack at that time, not because of its pervasiveness or its scale in the economy, but because Japanese-related activities were in the more conspicuous activities.

As the anti-Japanese movement, along with the student movement, subsided with the change in the government, Japanese investments in Thailand continued to increase. As Japan emerged as the wealthiest country and the economic hegemon of the free world, her global overseas investments, including those in Thailand, expanded further. And in 1987, Japan's registered capital in the promoted sector exceeded the total cumulative investments made during the past two and a half decades.

This paper traces the development of Japanese investment in Thailand and attempts to answer the following questions: When did Japan become the largest investor in Thailand? What has been the pattern of Japanese investment and the mode of operation? What are the contributions of Japanese investments as assessed by Thai scholars? And what, are the new trends in Japanese investment in Thailand?

In the next section, a brief discussion of the performance of the Thai economy is given.