Thai Economy Faces Strain from Chinese Goods Influx: BoT Chief Warns

[webfact]

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The dramatic influx of Chinese goods has put pressure on Thailand's manufacturing growth and has hindered loan expansion within the banking sector, declared Bank of Thailand Governor Sethaput Suthiwartnarueput yesterday. He addressed these concerns at the "Thailand Next Move 2025: Resiliency for an Uncertain World" seminar held by Money and Banking magazine.

 

Since 2014, Southeast Asian countries have witnessed a consistent rise in Chinese imports, with a noticeable acceleration starting in 2020. This surge is largely attributed to escalating geopolitical and economic fragmentation, Sethaput noted. By 2023, Thailand's imports from China reached 71.1 billion USD (roughly 2.53 trillion THB), making Thailand the second largest importer of Chinese goods in Southeast Asia, just after Vietnam.

 

Despite ongoing domestic consumption growth, Thailand's manufacturing sector has experienced a slowdown. Sethaput highlighted a declining correlation between the two sectors: from an average ratio of 0.79% between 2012 and 2020 to a mere 0.05% between 2021 and the third quarter of 2024.

 

During the earlier period, manufacturing and domestic consumption grew at average rates of 1.6% and 1.8%, respectively. Yet, from 2021 to recent times, manufacturing growth plunged to 0.6%, while domestic consumption continued to rise by 2.1%.

The governor also pointed to adverse effects on Thailand's banking sector, especially in auto lending—a prominent area of concern. In the third quarter of 2024, new car loans fell by 7.6% year-on-year, and used car loans saw an even sharper decline of 14.6%.

 

Sethaput expressed that "geoeconomic fragmentation is expected to persist, bringing heightened uncertainties on a global scale." He cited influencing factors such as changes in US policies, including tariff alterations and fiscal amendments which are likely to impact global trade dynamics. These changes could also affect inflation rates, thereby influencing central banks' monetary policies worldwide.

 

While the Bank of Thailand remains committed to a flexible monetary policy strategy that accommodates Thailand’s economic context, Sethaput stressed that monetary policy alone cannot bolster economic resilience. The central bank aims to reinforce economic buffers and has introduced measures across various sectors to enhance stability.

 

In addressing Thailand's substantial household debt levels, the central bank is set to unveil a new debt restructuring programme on 11 December, complementing existing financial aid initiatives. These efforts have already rendered support totalling 2.1 trillion THB to 6.1 million accounts within the first nine months of this year, reported Bangkok Post.

 

-- 2024-12-04

 

 

[ozz1]

Yes that's what happens when you're in bed with China too late now the horse has bolted maybe they should devalue the baht to compete at least that should make them competitive

[JoePai]

So do a Trumpy and slap 100% tariffs on their goods and see whay happens 😎

[NE1]

Wait until the trains start coming from China.

Carriages full of Chinese goods.

[gearbox]

The Chinese manufacturers are beating the competition worldwide, and is only going to get worse:

 

https://www.chinadaily.com.cn/a/202411/21/WS673e9937a310f1265a1cecf3.html

 

 

 

 

[hotchilli]

7 hours ago, webfact said:

The dramatic influx of Chinese goods has put pressure on Thailand's manufacturing growth and has hindered loan expansion within the banking sector, declared Bank of Thailand Governor Sethaput Suthiwartnarueput yesterday. He addressed these concerns at the "Thailand Next Move 2025: Resiliency for an Uncertain World" seminar held by Money and Banking magazine

FTA's can be a double edged sword

[JimHuaHin]

So, what cannot Thai customs officials stop this Chinese produce at the boarder?  (Brown envelopes?)

 

Who is importing all this Chinese produce?  Certainly not Chinese-Thai businesses?  Obviously all the boxes of fresh and frozen China-manufactured fruit and vegetables I see in my local supermarket are fake, ie incorrectly labelled; as are all the "Made in China" labels on many clothing items.

[petedk]

Wait until the minimum daily wage increases. That will also make Thai goods less competitive.

 

Having said that, I agree that the minimum daily wage is too low.

[OneZero]

7 hours ago, gearbox said:

The Chinese manufacturers are beating the competition worldwide, and is only going to get worse:

 

https://www.chinadaily.com.cn/a/202411/21/WS673e9937a310f1265a1cecf3.html

 

 

 

 

"..beating the competition", to the degree it may have validity sounds too positive.  "Undercutting the competition" may more closely describe the current insidious situation where unfair trade practices (CCP subsidies, high population low wage situations, etc) are probably also at times involved.

[RichardColeman]

Something I do not understand. I am a bit of a toy collector and regularly buy stuff off shoppee that comes direct from china, all stuff arrived and 99% was real (1 i bought I knew was fake so on my own head).

 

Now I can get free shipping from China with shoppee. I buy something 400 baht, it travels all the way from china, through immigration, and arrives at my door for free in 5-10 days (had it in 3 on occasions). If I buy something on FB or from a shop here in Thailand, its more expensive and shipping is usually 40-100 baht. 

 

I'd have to say shipping is killing Thai goods more than cheaper costing goods !

[redwood1]

7 hours ago, RichardColeman said:

Something I do not understand. I am a bit of a toy collector and regularly buy stuff off shoppee that comes direct from china, all stuff arrived and 99% was real (1 i bought I knew was fake so on my own head).

 

Now I can get free shipping from China with shoppee. I buy something 400 baht, it travels all the way from china, through immigration, and arrives at my door for free in 5-10 days (had it in 3 on occasions). If I buy something on FB or from a shop here in Thailand, its more expensive and shipping is usually 40-100 baht. 

 

I'd have to say shipping is killing Thai goods more than cheaper costing goods !

Shipping on Lazada and Shopee in Thailand is mostly free up to certain amounts...

[redwood1]

Thailand would grind to a halt overnight without Chinese goods...

 

Thailand's manufacturing base is tiny...