Vietnam overtakes Thailand in tech exports, posing a challenge

[snoop1130]

 

Thailand's export industry, which accounted for more than half the country's GDP in 2020, is threatened due to emerging technologies and direct competition with Vietnam. In high-tech product exports, Vietnam leads as a top player in the electronics sector due to a global recovery in demand for technology like computers, semiconductors, and smartphones.

 

Thailand mostly trades electronic products like integrated circuits (IC) and printed circuit boards (PCB). These products, however, are facing high competition regarding price and technological development, and therefore, add little value. According to Danucha Pichayanan, the Secretary-General of the National Economic and Social Development Council (NESDC), hard disk drives and peripherals have been staples in Thailand's trade for a while.

 

However, rapid technological changes have decreased the demand for hard disk drives, which are now mainly used in data centers. Thailand has been unable to establish chip manufacturing facilities due to a lack of necessary incentives from the investment board.

 

Attracting high-tech industries goes beyond offering incentives. A well-trained workforce is crucial since historically, Thailand has not produced enough skilled tech workers. To address this, some universities have initiated partnerships with international institutions to launch chip design centers in Thailand.

 

Despite certain laws enacted to improve competitiveness, the financial support provided isn't adequate. In the 2024 budget, 16 billion baht were allocated for the Competitiveness Enhancement Fund, aiming to draw major chip production firms to Thailand.

 

The government may implement a continuous funding mechanism to bypass the traditional annual budget process, which would help attract essential industries, like battery production plants. Plans are being made to allocate some revenue from the global minimum tax (GMT) to this fund.

 

This GMT was initiated by the Organisation for Economic Co-operation and Development (OECD) to ensure that large multinational enterprises (MNEs) pay 15% tax in every country they operate. If the taxes paid are less than 15%, the difference must be paid in the parent company's home country.

 

Thailand signed the global tax reform agreement and drafted the Top-Up Tax Act in accordance with OECD's principles. This law, if passed, will take into effect from the coming year and is hoped to strengthen the country's high-tech sector.

 

Kriengkrai Thiennukul, the Chairman of the Federation of Thai Industries (FTI), spoke about how Thailand's role as a manufacturer in the electronics industry has been affected by increasing labor costs and technological disruptions. He stated that Thailand's earning from this industry is falling behind those of China and Malaysia.

 

In his opinion, to get attracted from the midstream industry, the government must improve infrastructure, develop a skilled workforce, and ensure enough provision of clean energy.

 

An independent analyst, Aat Pisanwanich, states that Thailand's problems in growing its high-tech industries are due to its inconsistent foreign direct investment (FDI) policies. He claimed that compared to Thailand, Vietnam's consistent policies and strict laws such as anti-corruption measures have attracted investors from the US, China, and Taiwan.

 

According to a recent NESDC report, Thailand's manufacturing output has been declining for six quarters, leading to a 1% drop in Thai goods exports in the year's first quarter.

 

File photo for reference only

 

-- 2024-06-03

 

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[Peabody]

2 hours ago, snoop1130 said:

An independent analyst, Aat Pisanwanich, states that Thailand's problems in growing its high-tech industries are due to its inconsistent foreign direct investment (FDI) policies. He claimed that compared to Thailand, Vietnam's consistent policies and strict laws such as anti-corruption measures have attracted investors from the US, China, and Taiwan.

Buried lead!

[stoner]

but we got hubs. 

[sammieuk1]

But the Thai's are world leaders in manufacturing tall anti-corruption stories for the fantasy market 🤔

[John Drake]

First tech goes to Vietnam and the next thing you know Thailand will be importing durians from Vietnam. Uh, oh.  

 

Quote

Although Thailand is the largest exporter of the fruit, its durian has decreased significantly in quantity and quality due to severe drought, so it has to buy this fruit from other countries to serve domestic and tourist needs, stated Nguyen. 

 https://en.vietnamplus.vn/thailand-becomes-vietnams-second-largest-durian-importer-post287836.vnp

 

[dinsdale]

They say the cream rises to the top. The cream at the top here in Thailand is sour. Very sour indeed. Thailand is totally corrupt an run by idiots who are self perpetuating idiots and who maintain power through corruption and force.

[Maitdjai]

To invest in a circus "hub", you should be a clown.

[BangkokReady]

49 minutes ago, Peabody said:

Buried lead!

 

Thanks.  I couldn't be bothered to read the whole thing and this is probably the most important point.  Confidence, transparency, consistency, being warm to outsiders, are all important for attracting foreign investment.

[hotchilli]

12 hours ago, snoop1130 said:

Thailand's export industry, which accounted for more than half the country's GDP in 2020, is threatened due to emerging technologies and direct competition with Vietnam. In high-tech product exports, Vietnam leads as a top player in the electronics sector due to a global recovery in demand for technology like computers, semiconductors, and smartphones.

While Thailand plays political games.

[hotchilli]

12 hours ago, snoop1130 said:

In his opinion, to get attracted from the midstream industry, the government must improve infrastructure, develop a skilled workforce, and ensure enough provision of clean energy.

So basically it's screwed?

[Ben Zioner]

Within one or two decades Vietnam is going to overtake Thailand in about every field, with Prostitution remaining a Thai area of expertise.

[RichardColeman]

Baht is near 47 to my £ - i'm all for ongoing disaster

[retarius]

Red lights are flashing on the Thai economy. But don't worry Srettha held his first meeting with his economic team recently. We are sure to get extra gimmicks out of that meeting. 

[Peterphuket]

11 hours ago, dinsdale said:

They say the cream rises to the top. The cream at the top here in Thailand is sour. Very sour indeed. Thailand is totally corrupt an run by idiots who are self perpetuating idiots and who maintain power through corruption and force.

In which three other idiots, or is it the same ones, also control the entire consumer market.

So that competition no longer exists, the same high prices everywhere by now.

[JimHuaHin]

As a long time (about 50 years) visitor to, and watcher of, both Thailand and Viet Nam, who would of thought 20-30 years ago that Viet Nam would be powering ahead of Thailand?  Yes, Viet Nam has bad corruption, and yes the Vietnamese Communist Party has made some disastrous economic decisions in the past, but .... Viet Nam is advancing, while Thailand, ignoring the advice of "experts" is, at best, under the influence of powerful self-interested individuals, walking around in circles, or more accurately regressing back in time.

[RandolphGB]

11 hours ago, dinsdale said:

They say the cream rises to the top. The cream at the top here in Thailand is sour. Very sour indeed. Thailand is totally corrupt an run by idiots who are self perpetuating idiots and who maintain power through corruption and force.

 

Thailand has been run by the army-monarchical complex since the 19th century. Big business and Buddhism simply uphold the order.

[Srikcir]

15 hours ago, snoop1130 said:

Thailand's problems in growing its high-tech industries are due to its inconsistent foreign direct investment (FDI) policies.

Like Thavisin's recent decision to dedollarize the USD, join BRIC, trade and security with China, but asking the US for more FDI and Thailand exports..

[klauskunkel]

Quote

Vietnam overtakes Thailand in tech exports, posing a challenge

One could compare the amount of public holidays:

 

Vietnam:

Public Holiday	Details	Observed (2024)	Days
Gregorian Calendar New Year Holiday	January 1	Monday, January 1	1
Lunar New Year (Tet) Holidays	February 10	Thursday, February 8 through Wednesday, February 14	5
Hung Kings Commemoration Day	The 10th day of the third month of the lunar calendar	Thursday, April 18	1
Victory Day	April 30	Tuesday, April 30	1
International Labor Day	May 1	Wednesday, May 1	1
National Day	September 2	Saturday, August 31 to Tuesday, September 3	2

 

6 public holidays for a total of 11 days

 

 

Thailand:

2024 Thailand Public Holidays Calendar

2024 Date	Holiday Name	Holiday	Remarks
January 1	New Year's Day	December 30-January 2	4 days break for International New Year's Day
February 24	Makha Bucha Day	24-26 February	(Buddhist Holy Day) A Buddhist public holiday
April 6	Chakri Day	6-8 April	To commemorate the founding of the Chakri royal dynasty
April 13	Songkran Festival	13–16 April	Thai New Year, Water Splashing Festival
May 1	Labor Day	May 1	International Labor Day
May 4	H.M. King's Coronation	4-6 May	The coronation of King Maha Vajiralongkorn
May 22	Visakha Bucha	May 22	To commemorate the birth of the Buddha
June 3	H.M. Queen's Birthday	June 1-3	To mark the birthday of the current queen of Thailand, Queen Suthida
July 20	Asahna Bucha	July 20-22	To honor the Four Noble Truths of Buddhism
July 28	King Vajiralongkorn's Birthday	July 27-29	To mark the birthday of King Vajiralongkorn
August 12	The Queen Mother's Birthday	August 10-12	To commemorate the birth of Queen Mother
October 13	His Majesty the Late King	October 13-15	To commemorate the passing of His Majesty the Late King
October 23	Chulalongkorn Day	October 23	To commemorate King Rama V
December 5	King Bhumibol's Birthday	December 5	To honor the late King Bhumibol
December 10	Constitution Day	December 10	To take pride in the Thai monarchy

 

15 public holidays for a total of either 18, or 22, or maybe 30 days? (it's complicated)

Anyway, it seems that Thailand maybe missing 7+ days/year for manufacturing compared to Vietnam, which might impact exports... and now apparently Vietnam has caught up.

Time for a holiday! 

 

 

 

[roquefort]

2 hours ago, Srikcir said:

Like Thavisin's recent decision to dedollarize the USD, join BRIC, trade and security with China, but asking the US for more FDI and Thailand exports..

How do you de-dollarize the USD?

[impulse]

As fun as it is to rag on everything Thai, I wonder if this is just a race for the cheapest labor, with Thailand's GDP per capita being 170% of Vietnam's?

 

And when the Vietnamese people start catching up to Thais with their economic quality of life, global businesses will take their investment money and flee Vietnam to the next country with the cheapest labor.  Putting millions of Vietnamese out of work and creating yet another globalization mess.

 

Seems like the best thing Thailand can do to satisfy the globalists and increase exports is to suppress the labor rate.  (More than they already do...)  I'm not sure the average Thai would like that.

 

I'm not claiming to have any answers.  But I don't think competing for the bottom in terms of labor rates is the best one.

 

https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?iframe=true

 

[roquefort]

8 minutes ago, impulse said:

As fun as it is to rag on everything Thai, I wonder if this is just a race for the cheapest labor, with Thailand's GDP per capita being 170% of Vietnam's?

 

The cost of labour is certainly a key factor in any investment decision. As you say, the cheapest country benefits for a period of time until its labour costs become higher than its neighbours, at which point new investment goes elsewhere.

 

But comparing Thailand and Vietnam from my own experience I would say the Vietnamese are generally (there are always exceptions) better educated, more resourceful, more industrious, and more open to foreigners, so cost is not the only reason Thailand is losing out.

[Deerculler]

10 hours ago, retarius said:

Red lights are flashing on the Thai economy. But don't worry Srettha held his first meeting with his economic team recently. We are sure to get extra gimmicks out of that meeting. 

Following Thaksin's advice.

[Ben Zioner]

4 hours ago, impulse said:

As fun as it is to rag on everything Thai, I wonder if this is just a race for the cheapest labor, with Thailand's GDP per capita being 170% of Vietnam's?

Isolate the portion of GDP confiscated by the richest 1% and recalculate. Sorry to disappoint..

 

And give Vietnam another ten to twenty years, they are only at the beginning of their journey.

[Caldera]

Watch out Thailand, all you'll get to see from Vietnam in the years to come are its back lights.

 

They're educated, they are motivated, they are driven.