The second explanation lies in the fact that Thai Sakdina did not create any
institution to nurture entrepreneurial class. Most entrepreneurs working in Thailand at that
time came from Europe and China. Chinese merchants were very active in the Thai economy
in all aspects of life, largely because the Thai Sakdina was always confronted with the
shortage of skilled and unskilled labour. Furthermore, these Chinese traders and unskilled
workers migrated to Thailand to earn money and then send this remittance back to mainland
China. As pointed out rightly by Ingram (1971), the amount of this money seat back to China
was quite substantial and rendered the Thai economy stagnant in terms of capital
accumulation. The third explanation is concerned with the unequal treaty that the British
Empire set up for Thailand since 1855, the so-called Bowring treaty was signed by both
parties. This unequal treaty turned the Thai economy into the regional colonial economy
prohibited the high import duties (maximum 3% of import and export) which domestic
industry could not have been created. The cheap import product substituted local industrial
product easily, while the country was severely weaken by limited government revenue from
the trade tax. Therefore, infrastructure could not be built. The shortage of skilled and
unskilled labour made the elite consent to import Chinese workers to work in public activities.
During the Second World War, the European trading house had been closed down, local
Chinese merchants were cut off from the mainland after the Communist party took the power
in 1949. This critical event rendered the Chinese entrepreneurial class willing to invest their
capital in Thailand.