The Global Development Initiative supports MSME digital transformation in Thailand

As global economic conditions remain uncertain, development cooperation is increasingly judged not by ambition alone, but by outcomes. Slower growth, fragmented supply chains and widening inequality have underscored the need for approaches that strengthen local economies and improve livelihoods at the grassroots level. In this context, China’s Global Development Initiative has drawn attention for its emphasis on practical cooperation in areas such as poverty alleviation, the digital economy, development financing and connectivity.

For middle-income economies such as Thailand, where micro-, small- and medium-sized enterprises (MSMEs) form the backbone of economic activity, the relevance of this approach is particularly clear. The challenge today is not simply expanding trade or investment, but ensuring that development benefits reach small companies, local communities and informal economic actors. Examining China-Thailand cooperation through the lens of MSMEs and the digital economy offers useful insights into how the Global Development Initiative can support sustainable local development in practice.

MSMEs employ over two-thirds of the labor force in Thailand. They are central to services, manufacturing supply chains, food processing, logistics and retail. Despite their scale, many MSMEs face persistent structural constraints, including limited access to finance, low productivity and uneven digital capacity. The COVID-19 pandemic exposed these vulnerabilities. Many MSMEs struggled with cash flow disruptions and declining demand. At the same time, the crisis accelerated digital adoption across the economy. Online payments, digital platforms and e-commerce have shifted from being optional tools to essential infrastructure for business continuity. Digital transformation is no longer peripheral to development — it is central to resilience, inclusion and long-term competitiveness. Ensuring that MSMEs can participate in the digital economy has therefore become a core policy priority for Thailand.

The Global Development Initiative places the digital economy and connectivity at the heart of development cooperation. Rather than promoting a single development model, the initiative emphasizes capacity building, technology access and respect for national development paths. This approach aligns closely with Thailand’s own development needs as it seeks to upgrade MSMEs and reduce gaps between large and small enterprises.

China’s development experience illustrates how digital infrastructure and platforms can lower transaction costs, expand market access and integrate small businesses into broader economic networks. For Thailand, cooperation in areas such as digital finance, cross-border payment systems and MSME digital skills development offers tangible pathways for strengthening local enterprises.

One of the most direct channels through which China-Thailand cooperation contributes to MSME development is digital connectivity. The expansion of digital payment systems and platform-based services has helped Thai MSMEs reduce reliance on cash, improve record-keeping and access new customer bases. For small companies, especially those outside major urban centers, these changes have improved transparency and financial inclusion — key prerequisites for accessing formal credit and development finance.

Since 2018, Huawei has invested 5.5 billion baht ($173.7 million) to build its cloud infrastructure in Thailand. Huawei Cloud has partnered with the Thai Ministry of Digital Economy and Society to launch the e-government cloud for enhancing digital collaboration and public service quality. It has also supported Thailand’s first smart city in the Eastern Economic Corridor, improving public services and infrastructure.

According to national estimates, the share of MSMEs using digital payments and online platforms has risen steadily since 2020. This shift has been particularly important for micro and small enterprises, which traditionally face higher barriers to entering formal markets. Digital tools allow these companies to operate more efficiently, manage inventory and respond to demand with greater flexibility.

From a Global Development Initiative perspective, this reflects how connectivity in the digital age supports inclusive development. Rather than concentrating gains among large companies, digital integration enables smaller businesses to participate more fully in economic activity.

Beyond access, digital transformation also affects productivity. MSMEs that adopt digital tools — such as e-commerce platforms, cloud-based accounting and digital logistics — tend to experience improvements in efficiency and service quality. These gains are essential for Thailand as it seeks to avoid the middle-income trap and sustain growth in an aging society.

China-Thailand cooperation in digital capacity building, including training programs and knowledge exchange, complements domestic efforts to upgrade MSMEs. Such cooperation aligns with the Global Development Initiative’s focus on development financing and industrial upgrading, particularly when digital tools are linked to broader goals such as green development and resource efficiency.

For example, digital supply chain management can reduce waste, improve energy efficiency and support environmentally sustainable practices among small manufacturers and service providers. These outcomes demonstrate how the digital economy contributes not only to growth, but also to sustainability.

At the national level, Thailand’s experience shows that digital transformation works best when supported by coordinated policy frameworks. Investment in digital infrastructure, regulatory clarity and MSME support programs is essential. Regional cooperation can reinforce these efforts by promoting interoperability, shared standards and access to technology.

Within broader regional mechanisms, China-Thailand cooperation contributes to an environment where MSMEs are better connected to markets, finance and information. This reduces vulnerability to external shocks and strengthens domestic demand — both critical for sustainable development.

Importantly, this form of cooperation does not replace national policy priorities. Instead, it complements them by expanding the range of tools available to local businesses. This balance between national ownership and international cooperation is a defining feature of Thailand-China digital cooperation under the framework of the Global Development Initiative.

The Global Development Initiative emphasizes outcomes over rhetoric. Its focus on the digital economy, connectivity and MSME participation addresses some of the most pressing development challenges Thailand faces today. By supporting digital inclusion and strengthening small enterprises, development cooperation can translate into real improvements in livelihoods and economic resilience.

China-Thailand cooperation in the digital economy illustrates how Global Development Initiative principles can move from vision to practice. When MSMEs gain access to digital tools, finance and connectivity, development becomes more inclusive and sustainable, reminding us that effective globalization begins at the local level.

In a period of global uncertainty, development-centered cooperation that empowers small businesses offers a constructive and forward-looking path — one that aligns national priorities with shared regional progress.

Nisit Panthamit is an associate professor of economics, the director of the Center for ASEAN Studies at Chiang Mai University and the joint director of the Center for Southeast Asian Studies at the University of Electronic Science and Technology of China. Nitchanat Phengphum is a researcher at the Center for ASEAN Economic Research at the Faculty of Economics at Chiang Mai University.

The authors contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn.