BANGKOK – The crackdown forces the closure of at least 12 Chinese restaurants in Huai Khwang district, dubbed Bangkok’s new Chinatown, according to a Prachachat Business report.
Authorities inspecting Pracharat Bamphen Road in Huai Khwang district find restaurants and supermarkets operated and funded by Chinese expats in breach of the law.
Huai Khwang district officials recently launched a crackdown on illegal operations in Chinese restaurants on Pracharat Bamphen Road, identifying then ordering the closure of least 12 restaurants and supermarkets operating in violation of the Foreign Business Act.
According to the authorities, the restaurants are: Dragon Shabu Mala, Chao Tian Men Hot Pot, JP Shabu, Mala Master, Kuanzhai Alley, Huang Ewi, Super Store, Shawn Yue, Hung Lou Meng, Tuan Sao Sao, Fuda Hot Pot, Piggy Mala, Khamoo and Fu Hwa. Most are restaurants serving Mala hot pot, a spicy and tongue-numbing dish cooked in a pot of simmering soup at the table.
A neighborhood that never sleeps becomes subdued
A sober mood has set in following the crackdown. The typically vibrant atmosphere of the Pracharat Bamphen Road has been replaced by an unusual silence amidst the hustle and bustle of the Huai Khwang district in the heart of the city. The road has become quiet, with relatively little traffic and fewer foreign tourists and local visitors.
The Prachachat Turakij spoke with Praphruk Hankijjakul, a member of the Bangkok Metropolitan Council who represents Huai Khwang District about the current economic climate of businesses in the neighborhood and why many Chinese restaurants are shuttered.
“Business in the area has slowed. The road is notably quieter, mainly I think due to the closures of Chinese restaurants following the inspections,” he said.
Before the Covid-19 pandemic began, Chinese expats arrived in the neighborhood en masse. They started operating a range of hospitality businesses and opened shops, stores and Mala hotpot restaurants, causing Pracharat Bamphen Road to be dubbed “Bangkok’s new Chinatown”.
The Pracharat Bamphen area drew the attention of Chinese tourists and local visitors who enjoy shopping and the nightlife, especially eating hot pot-style dishes. Due to its popularity and rapid growth, many suspected that businesses in the area are linked to Chinese ‘gray businesses’ in Thailand.
In late 2023, the Huai Khwang district authorities launched a campaign on Pracharat Bumphen Road to inspect and strictly enforce regulations on Chinese-funded businesses in the district in a bid to curb the so-called ‘gray businesses’ with a focus on restaurants.
The move came after complaints were lodged about Thai citizens acting as nominees for foreign businesses and illegal operations in the area.
Mr. Praphruk said the authorities who carried out the inspections asked owners of Chinese restaurants for their business registration document to see whether they have breached the Foreign Business Act. They were also asked whether the food they were selling to consumers had been inspected and certified by Thailand’s Food and Drug Administration.
The investigation found many owners operating restaurants in Thailand without a permit. Officials ordered them to register their businesses with authorities.
However, some restaurants opted to shut their doors instead of following the rules, Mr. Praphruk noted.
To open a restaurant, he explained that owners must adhere to specific regulations including proper installation and maintenance of a grease trap and a fire escape. Some owners refused to invest in these installations to improve operations and be in accordance with the law, saying they rented the building space to open the restaurant. It was also noted that Thailand’s economy which was significantly impacted by the Covid-19 pandemic, has yet to fully recovered and it’s unlikely that the restaurant industry will return to its pre-pandemic level any time soon.
Yet others said the layout and design of some buildings are not suitable for a restaurant. Many owners said the registration is complicated process.
“When business was thriving, new Chinese restaurants mushroomed, with no permit. Authorities ordered them to obey the law but some restaurants failed to make the required improvements,” Mr. Praphruk said
About 30% of restaurants funded by the Chinese shut
According to him, about 10 out of 40 restaurants (about 30%) in the area have been closed, mostly Mala hotpot and Shabushi restaurants.
A restaurant occupies about 1-2 units of a building and requires an investment of about 2-3 million baht. Many of them are owned by Chinese national and others are funded by Chinese investors. Some have Thai citizens acting as nominees for Chinese-owned restaurants.
Mr. Praphruk said authorities gave the owners a 15-day grace period to register their businesses. When they failed to do so, they were given another 15 day to comply. When they were found to have flouted the rules, the authorities ordered them to shut their restaurants.
If owners violate authorities’ orders, they will be liable for a fine of up to 20,000-50,000 baht per day, he noted.
Some Chinese owners whose restaurants were shut due to illegal operations asked their compatriots to operate other businesses. The buildings that cannot be re-designed are permanently closed, he added.
Chinese restaurant owners have asked Thai business partners to act as nominees or hired an interpreter to help them in applying for a permit to open a restaurant, due to the communication barrier, Mr. Praphruk said.
Truly subdued and silent
Both sides of Pracharat Bamphen Road have been in a sober mood since the Chinese-owned restaurants shut following the crackdown, he noted.
“Business is crashing. Foreign tourists and local people used to flock to visit to the Ganesh shrine at the corner of the Huai Khwang intersection. They crossed the road to the neighborhood and stopped at restaurants to enjoy foods and drinks. These days, the area is nearly empty. Chinese tourists are turning to other places,” he said.
Chinese tourists are returning, Mr. Praphruk noted, but not to Bangkok. They go to Phuket, Samui Island, Pattaya and Koh Lan instead. Bangkok has become a stopover for Chinese tourists, not a final destination as it was in the past.
“The road is eerily quiet after 8-9pm. It was busy and dynamic until midnight,” he said.
He estimated that Chinese restaurants on Pracharat Bamphen Road generated a combined monthly revenue of up to 40 million baht, helping boost the local economy. Today, the revenue is reduced by more than half or just 15 million baht.
Mr. Praphruk noted that the closures of Chinese restaurants, which typically draw thousands of foreign tourists and local people who come to dine and shop has dealt a severe blow to the local economy.
“It’s really subdued neighborhood. Businesses are not doing well although better than during Covid-19,” he said.
Mr. Prapruk said local residents are concerned that the arrival of Chinese in the Huai Khwang District caused inconvenience even though it helped stimulate economy. The majority of local residents said they have not benefitted from businesses in the area. Many said Chinese living in there are annoying.
Sometimes, they park their cars, obstructing roads, traffic and pedestrians. They create noisy quarrels. There are also noise issues during night hours as the area is surrounded by restaurants, clubs and cocktail bars, making it a place for partying and nightlife.
The restaurant closures have helped improve the environment, making it more livable and peaceful so the locals are able to enjoy peace of mind, he noted.
“The road has been quiet for a while. The usually bustling Chinese New Year festival was sober this year as the celebration was halted due to the inspections.” he said.
The District Office usually organizes a special event to celebrate the lunar New Year. The event, which features food and drink stalls, is mainly attended by Chinese who take part in the event to meet their fellows and buy products from Chinese shops and stores.
Thanapon Rittayamai, a resident of the downtown area who has seen the Huai Khwang district in its best and worst times, concurs with Mr. Praphruk’s remarks on the business situations and Chinese behaviors. He has been living there for more than five decades and owns, Sri Charoen, a drug store and a mom-and-pop store in the neighborhood.
He noted Pracharat Bamphen Road is quieter since Chinese restaurants were shuttered. Customers behaviors has changed too.
“Fewer customers come by to buy products from our shop. The evenings have become quiet. The area was packed with tourists and visitors. It was still busy at midnight,” he said.
He noted that cost of renting a building in the neighborhood is relatively high. The monthly rental rate for a unit of the building close to the road is about 30,000-50,000 baht and was higher than 50,000 baht pre-Covid.
“Many Chinese came to our shop asking if there was anywhere to rent. They showed us their money, asked to rent a space and have a lease drawn up,” Mr. Thanapon said.
He added local vendors including him had wondered why many Chinese restaurants were able to keep going with only a few customers, while many owners of restaurants and shops were struggling with the high cost of raw materials due to inflation and higher labour costs.
The Thai entrepreneur said he doesn’t see a direct positive impact of the arrival of Chinese in the area. But it can have many negative consequences when Chinese living in the area don’t obey the rules.
“Most Chinese tourists traveling to the neighborhood look for or buy products from stores and shops that are operated or funded by Chinese expats. If they cannot find a product they are looking for, they come to our stores,” he said adding that parking problems as well as traffic and noise issues would be reduced if the Chinese cared more about Thai rules.
He noted that the number of consumers had gradually dropped when the country was hit by the Covid-19 pandemic and had significantly declined since the beginning of the year.
“Vendors and entrepreneurs are already suffering. The ongoing inflation is rubbing salt in our wounds,” he said.
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