Thai exports are rebounding but huge trade deficit with China poses a threat

[webfact]

 

Exports are bringing cheer to Thailand’s gloomy economy, growing 10 per cent year on year in January, the highest in 19 months.  

 

The January results marked six consecutive months of export growth, offering hopes of gross domestic product (GDP) expanding greater than last year’s sluggish 1.9 per cent.

 

Thailand’s export of merchandise contracted 1.5 per cent in 2023, but it started to turn into positive territory in the fourth quarter of the year.

 

Pisit Puapan, director of the macroeconomic policy bureau at the Fiscal Policy Office, says exports expanded 3.4 per cent year on year in the fourth quarter of 2023. He believes the momentum of exports, along with rising private investment, consumption and tourism, will drive the economy this year to grow 2.8 per cent, slightly higher than the 2.7 per cent growth forecast by the National Economic and Social Development Council, a state think-tank.

 

By Thai PBS World’s Business Desk

 

Full story: Thai PBS 2024-02-27

 

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[Mike Lister]

From the article in the OP:

 

"An alarming issue for the Thai economy is the mounting trade deficit with China, as cheap imports are far outpacing Thailand’s exports for many years.

 

In January alone, though Thai exports to China were worth $2.3 billion, imports amounted to $6.8 billion, leaving the country to deal with a trade deficit of $4.6 billion. This is higher than the $2.9-billion deficit in December and the $4.1-billion deficit in January 2022"

 

.

[John Drake]

57 minutes ago, Mike Lister said:

From the article in the OP:

 

"An alarming issue for the Thai economy is the mounting trade deficit with China, as cheap imports are far outpacing Thailand’s exports for many years.

 

In January alone, though Thai exports to China were worth $2.3 billion, imports amounted to $6.8 billion, leaving the country to deal with a trade deficit of $4.6 billion. This is higher than the $2.9-billion deficit in December and the $4.1-billion deficit in January 2022"

 

.

 

Did Thailand actually think all that excitement over exporting durians, chicken, and timber to China would be a one way street? Meanwhile, 

Quote

Prime Minister Srettha Thavisin has pledged to help the local industries. He admitted that there were three key factors behind the high volume of Chinese products flooding the domestic market.

First, importers declared a lower value of the goods — at below 1,500 baht a piece — in order to evade the 7 per cent value-added tax payment.

Second, Chinese traders were flooding Thai markets with cheaper products via online shopping and exploiting a loophole in the Free Trade Zone to evade Customs duties.

And third, Chinese goods are smuggled into the country by falsifying import documents to evade Customs duties.

 

The utter surprise that China cheats. Not to mention organized crime coming in through the open visa entry program with China. Haven't seen a word about triads since Chuwit went off to die abroad. My bet is they are hip deep in this stuff. Thailand will never get them out, now. Or the cheap Chinese goods and customs evaders.

[harada]

Step into my parlour said the spider to the fly. 😂

[scorecard]

The reality is that China has a very large number of manufacturers and exporters all looking to make sales abroad.

 

Same for Thailand but in terms of the numbers of Chinese exporters the number will always be massively bigger that the total numbers of Thais wanting to export, hence the deficit. Reality of life.

[Mike Lister]

I think it's clear that covid recovery is a factor in this deficit and that China exports have recovered more quickly than their imports.

 

 

[itsari]

I am not surprised that China is hurting Thai manufacturers and suppliers.

I bought three 6500 watt instantaneous water heaters from China through lazada for the price of one in Thailand.

Now I am waiting for a 12kwh diesel generator from China that is costing 48000 baht with an automatic transfer switch freight and taxes paid through Alibaba.

Local suppliers are up in 65000 baht plus for the same unit.

 

 

[mfd101]

And presumably the Chinese goods are on average further up the manufactured/value-added chain than are the Thai goods?

 

So, for example, manufacturing a car & exporting it is going to be worth more than assembling a car and exporting it ...

[sammieuk1]

The tentacles Xi can't sell snow to the Eskimo but can flog you fools some engineless subs for starters 🤔

[bigupandchill]

I would pay more to buy from a chinese company rather than a Thai one.

[hotchilli]

18 hours ago, webfact said:

Exports are bringing cheer to Thailand’s gloomy economy, growing 10 per cent year on year in January, the highest in 19 months.

Thai imports from China will always outnumber exports.

Many Thais will buy products from China, put on a mark-up and sell domestically for a profit.

Thais have difficulty producing goods at affordable prices and deliver on time. 

[Mike Lister]

1 minute ago, hotchilli said:

Thai imports from China will always outnumber exports.

Many Thais will buy products from China, put on a mark-up and sell domestically for a profit.

Thais have difficulty producing goods at affordable prices and deliver on time. 

Quality will win ultimately. Nobody wants to buy rubbish products, even if they are cheap, the winner ultimately will be the best quality product at the lowest price..

[hotchilli]

4 minutes ago, Mike Lister said:

Quality will win ultimately. Nobody wants to buy rubbish products, even if they are cheap, the winner ultimately will be the best quality product at the lowest price..

I know many Thais that will buy cheap in the short term rather than buy quality in the long term.

They would buy something for 500 baht that last 6 months and buy the same product again for the same price

Rather than pay 800 baht for something that would last longer.

[Mike Lister]

8 minutes ago, hotchilli said:

I know many Thais that will buy cheap in the short term rather than buy quality in the long term.

They would buy something for 500 baht that last 6 months and buy the same product again for the same price

Rather than pay 800 baht for something that would last longer.

I know of similar also. The coin will drop eventually, better or more competition will go a long way to improving product quality, preferably foreign competition.

[jacko45k]

19 minutes ago, hotchilli said:

I know many Thais that will buy cheap in the short term rather than buy quality in the long term.

They would buy something for 500 baht that last 6 months and buy the same product again for the same price

Rather than pay 800 baht for something that would last longer.

I tend to agree..... single use spanners for me! As to tools a Thai will leave them lying around and lose them after a single use, so might as well buy cheap. 

[Mike Lister]

I tried to find the connection between coffee makers and the trade deficit with China but I just couldn't get there I'm afraid, so I had to remove the posts, as interesting as they were.