China’s planned focus on domestic economy ‘will hit Thai exports badly’

[webfact]

China’s planned focus on domestic economy ‘will hit Thai exports badly’

By Wichit Chaitrong
The Nation

 

 

Thai exporters will face the biggest challenge once China shifts its focus to its domestic economy as a result of is trade war with the United States.

 

In an interview with Nationmultimedia Group, Chinese Ambassador to Thailand Lyu Jian confirmed that though China with continue supporting multilateral trade under the World Trade Organisation, it will at the same time put more emphasis on domestic economy.

 

Chinese ambassador to Thailand Lyu Jian

 

Though the envoy said he foresees a good economic relationship with Thailand and Asean by linking its Belt and Road Initiative with the Thailand 4.0 and Eastern Economic Corridor projects. 

 

However, Sompop Manarungsan, president of the Panyapiwat Institute of Management, said China’s focus on its domestic economy, combined with slower growth and the ongoing trade dispute, will pose serious challenges to Thai exporters. 

 

He said Thailand should also focus on its domestic economy and stop relying too much on exports. Currently, the annual export value is about 60 per cent of the gross domestic product, which is too high, he said, adding that this should be reduced to about 30 per cent. 

 

The other factor affecting Thai exports will be China’s economic slowdown. Sompop said China’s economic growth will be less than 5 per cent in the next decade from the current 6 per cent, while in the 2030s the growth is expected to be less than 2 per cent. 

 

A recent study on economic reform conducted by China’s State Council and the World Bank also showed that China needs to introduce changes in three key areas, namely the labour market, the financial market and state enterprises. China’s labour and financial markets are not efficient, resulting in a low total factor (TFP) productivity rate, which is about half that of developed countries. 

 

Plus, he said, the West is also suspicious about China’s state-owned companies, with Huawei, a top provider of information and communications technology, being a case in point. 

 

Sompop added that apart from facing challenges from the trade dispute with the US, China will also find it difficult to integrate with the global economy, because as China pursues market-based socialism, developed economies wholly embrace capitalism. 

 

“The banning of Huawei products in the US is an example that developed countries do not trust enterprises controlled by China’s Communist Party,” Sompop said. 

 

He also added that China’s business system dominated by state-owned firms will find it difficult to integrate with global markets, which are driven by private firms. Besides, he added, China’s centralised political system is the opposite of democracy in the West. 

 

Sompop added that if China is unable to successfully integrate its economy with that of the world, then it could get decoupled on three fronts – trade, finance and digital technology. Plus, he said, both China and the US will implement protectionism measures against each other. 

 

Meanwhile, Chao Kengchon, managing director at Kasikorn Research Centre, said that though China has the fiscal space to boost its domestic economy, it will face the important task of making its economic development sustainable. He said like Thailand, China is entering an ageing society due to low birth rates, which will lead to dwindling market forces and rising welfare cost. 

 

Pimchanok Vonkorpon, director-general of the Trade Policy and Strategy Office, however, remains optimistic, saying that though manufactured goods have been affected by the trade war, China’s import of fresh fruits has been rising in recent years. For instance, she said, durian, mangosteen and longan still remain very popular among Chinese consumers. 

 

“What worries me is their quality and logistics,” she said. 

 

She said that Thai farmers and exporters may export low-quality product to meet high demand from China, so the authorities have to ensure the quality of the products is maintained. Also, she said, Thailand needs to improve its logistics because goods heading for China still have to go by road via Vietnam. 

 

According to the Commerce Ministry, Thai exports to China from January to August this year was worth US$18.9 billion (Bt576.4 billion), down 6.92 per cent year on year, while exports to the US stood at $21.1 billion, recording a jump of 14.89 per cen. Exports to Japan were worth $16.5 billion, down 0.77 per cent.

 

Source: https://www.nationthailand.com/business/30376624

 

-- © Copyright The Nation Thailand 2019-09-24

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[emptypockets]

????? say what?

[dimitriv]

37 minutes ago, webfact said:

China’s centralised political system is the opposite of democracy in the West. 

 

Those are statements that I would not expect.

[Fex Bluse]

Thought they could steal and bully their way to the top.

 

And then they got a big shock to realize that Western countries, and especially the US, are tired of their games and actually don't need them as much as the Chinese think.

 

The Chinese economy will face enormous pressure when most of the Western companies are removed, Chinese weaponized investment in Western economies is curtailed and their weaponized students are dramatically limited in Western universities.

 

And, the Chinese tourists will mostly stay home.

 

Joy!

[sunnyboy2018]

An insane murderous government.

[PatOngo]

1 hour ago, webfact said:

Currently, the annual export value is about 60 per cent of the gross domestic product, which is too high, he said, adding that this should be reduced to about 30 per cent. 

"May you live in interesting times"...………...Chinese curse?

[garyk]

It is not looking good for China, and Thailand basically aligned itself with China. Its going to interesting to see what happens in the next few years. Time will tell. 

 

[30la]

You have bet on the wrong horse, from China you want everything but you are constantly looking towards America because you believe everything that Americans tell you!
The Chinese make you see it every day that they are really smart in everything they do!
They copy? Do they steal patents?
You can answer these questions with yes, and now they produce EVERYTHING the world need!
We all underestimated this giant who slept for so long and we didn't realize he was just waiting for the right moment to come out!
Start working with China in a more sincere and open way, you will benefit greatly! America is not the number 1 anymore!

[Cadbury]

3 hours ago, webfact said:

China’s planned focus on domestic economy ‘will hit Thai exports badly’

Oh dear! Everything seems to be unravelling for the government, exports down, tourism down, budget deficit up.......

All at a time when the PM is strutting the world stage in New York with his chest puffed out and needing something to brag about. All he has heard from home over the last few days is bad news.

That will make him very grumpy and not a nice person to be around.

[RBOP]

So of the top 3 countries (Jan - Aug 2019) overall exports are up 1.7 billion dollars or 5.6%. Whats so bad about that? 

[The Deerhunter]

3 hours ago, dimitriv said:

 

Those are statements that I would not expect.

Well I would expect them, but not from that source!   Quite a mouthful there but owing to the lack of an enquiring outlook from the Thai education system it will go right over the head of most Thais, even the few who are able to read or hear it

[donnacha]

Well done everyone in the Thai government, well done.

[thailand49]

When is the baht going to crash that is my question?  The more for me the better.????

[Isaan sailor]

Stop eating from the hand of the ChiComs.  By now, anyone with half a brain in this world knows what’s happening here. Belt & Road just another nail in Thailand’s coffin.

[TKDfella]

49 minutes ago, 30la said:

You have bet on the wrong horse, from China you want everything but you are constantly looking towards America because you believe everything that Americans tell you!
The Chinese make you see it every day that they are really smart in everything they do!
They copy? Do they steal patents?
You can answer these questions with yes, and now they produce EVERYTHING the world need!
We all underestimated this giant who slept for so long and we didn't realize he was just waiting for the right moment to come out!
Start working with China in a more sincere and open way, you will benefit greatly! America is not the number 1 anymore!

I agree about the 'sleeping giant' bit but definitely do not agree with your last line. The Chinese regime wants to dominate in everything and that includes seeing a world communist state (not referring to current situations such as Hong Kong and Taiwan, they are Chinese anyway).

[Inepto Cracy]

Would you trust a man who's lapel badge is showing his country flag upside down ?

[MartinKal]

Yes we have two diametrically opposite systems. One is top down with planning driven by the state. The other is bottom up with planning driven by the market. One is communist. The other is capitalist. 

 

Diametrically opposite ways of organising. One puts the rights of the collective above the individual. The other puts the rights of the individual above those of the collective.

 

One favours the rulers over the ruled. The other the rules over rulers and ruled.

 

Opposite yes, but opposed? The two systems integrate where logistics, finance and law meet in international regulatory bodies such as the World Trade Organisation, International Monetary Fund and United Nations.

[MartinKal]

1 minute ago, MartinKal said:

Yes we have two diametrically opposite systems. One is top down with planning driven by the state. The other is bottom up with planning driven by the market. One is communist. The other is capitalist. 

 

Diametrically opposite ways of organising. One puts the rights of the collective above the individual. The other puts the rights of the individual above those of the collective.

 

One favours the rulers over the ruled. The other the rules over rulers and ruled.

 

Opposite yes, but opposed? The two systems integrate where logistics, finance and law meet in international regulatory bodies such as the World Trade Organisation, International Monetary Fund and United Nations.

And your point is ....?

[Isaan sailor]

Yeah, right.  The ChiCom master wants Thai exports to drop from 60% of the economy—down to 30%.  So will Bank of Thailand comply with their masters command?  They can continue raking in Chinese hot money inflows from bond sales, to drive USD reserves and the Baht up.

We shall see...

[The Preacher]

1 hour ago, 30la said:

You have bet on the wrong horse, from China you want everything but you are constantly looking towards America because you believe everything that Americans tell you!
The Chinese make you see it every day that they are really smart in everything they do!
They copy? Do they steal patents?
You can answer these questions with yes, and now they produce EVERYTHING the world need!
We all underestimated this giant who slept for so long and we didn't realize he was just waiting for the right moment to come out!
Start working with China in a more sincere and open way, you will benefit greatly! America is not the number 1 anymore!

Here is a classic example of the cheating and sneaky Chinese.  This is a Chinese government post, masquerading as some normal ThaiVisa member.   But 30la, you do not understand Western finesse so you cannot pull if off.  You fraud is transparent.  Why not stop cheating and start competing.  

[Miami007]

Thailand is exporting more to the USA than to China?

 

[DUNROAMIN]

All aboard!

[hotchilli]

1 hour ago, 30la said:

We all underestimated this giant who slept for so long and we didn't realize he was just waiting for the right moment to come out!

The giant wasn't sleeping, this has been well planned and coming for a long time.
They were importing/buying everything from the west, reverse engineering it then selling it back at half the cost... now firmly ingrained throughout S.E.Asia it's economy, manpower is shared across many nations, it has special economic zones, factories, roads, bridges, rail networks, shipping ports and airports everywhere... they are not in any trouble what so ever !

[Ireland32]

If Thailand swallows the hook on this Silk Rd for China , Dirt Road for us...Debt Disaster

[yellowboat]

5 hours ago, webfact said:

Currently, the annual export value is about 60 per cent of the gross domestic product, which is too high, he said, adding that this should be reduced to about 30 per cent. 

What a bunch of dummies.  There is NO domestic economy in Thailand with all its wealth concentrated at the top.  Most Thais are poor and many not offered a proper education.  The there is that whole hole in everyone's wallet known as debt.  The reactionaries at the top of the Thai food chain have no understanding of economics.  They just say anything that comes to mind.

[ThePioneer]

5 hours ago, webfact said:

Sompop said China’s economic growth will be less than 5 per cent in the next decade from the current 6 per cent, while in the 2030s the growth is expected to be less than 2 per cent. 

I love it when I see those predictions 11 years down the road, while in fact their figure estimates for the next quarter are usually completely wrong

[Srikcir]

6 hours ago, webfact said:

China needs to introduce changes in three key areas, namely the labour market, the financial market and state enterprises. China’s labour and financial markets are not efficient

Substitute "China" for "Thailand" and you get the same issues.

And for both nations the underlying institutions (shall we say "pillars of society"?) resist and impede such changes.

[boonrawdcnx]

So of the top 3 countries (Jan - Aug 2019) overall exports are up 1.7 billion dollars or 5.6%. Whats so bad about that? 

It does not help if your export numbers are rising but your profits are down because of the Baht appreciation.

Importers and Wholesalers need to offer the best prices possible to their customers and they can’t do that with an average 15% price rise of Thai products because of the Baht exchange rate - either Thai exporters need to adjust their prices downwards or importers look elsewhere - so a 5.6% rise in export volume is useless if profits drop by 15%.

 

In addition billions are wasted on government substitutes to keep farmers / producers quite and without the substitutes they could not compete at all - there is hardly a day here without another announcement of a government bailout of some kind.

 

Nothing but incompetence and almost communist style monopolies by the fascist rich are causing this dilemma.

Thailand and most other SE-Asian nations all have the same problem - they never developed a proper domestic market with the buying power to become more independent.

Only the rich get richer - and this will come back and bite them big time when they become -as the first developing nation - a super-aged society from 2030 onwards without a proper social security system in place.

 

 

Sent from my iPhone using Thailand Forum - Thaivisa mobile app

[Chazar]

2 hours ago, 30la said:

You have bet on the wrong horse, from China you want everything but you are constantly looking towards America because you believe everything that Americans tell you!
The Chinese make you see it every day that they are really smart in everything they do!
They copy? Do they steal patents?
You can answer these questions with yes, and now they produce EVERYTHING the world need!
We all underestimated this giant who slept for so long and we didn't realize he was just waiting for the right moment to come out!
Start working with China in a more sincere and open way, you will benefit greatly! America is not the number 1 anymore!

dont  worry  theyre  good  at  jumping  ship

[kevinmartyn]

This story is nonsence and the. only reason is the strong baht!