China's Zero-Dollar Trade Sparks Thailand's Economic Woes

[webfact]

Picture courtesy of China Briefing
 

Thailand is grappling with an influx of "zero-dollar" investments and exports from China, raising alarms over the potential impact on the nation's economy. Experts are urging the government to take decisive measures to curb these activities, which could otherwise lead to growth that bypasses the Thai populace entirely.

 

Amonthep Chawla, chief economist at CIMB Thai Bank, highlighted the global trade shifts driven by US-China tensions, which could turn Southeast Asia, and Thailand in particular, into fertile ground for foreign direct investment (FDI).

 

Despite Thailand's potential as a manufacturing hub, "zero-dollar" investments, particularly from Chinese firms, pose significant threats by offering negligible economic benefits to local industries.

 

These zero-dollar exports involve trade activities that contribute little to local economic growth, employment, or profits, as foreign firms execute operations in Thailand.

 

Despite an impressive year for FDI in 2024, the nation's economic indicators like the Purchasing Managers' Index (PMI) and jobs growth showed only modest improvements. Exports rose, but the economic benefits remained lacklustre, Amonthep stated.

 

 

 

Amonthep called for a robust government response akin to the clampdown on zero-dollar tour schemes, which previously exploited local resources without fair distribution of profits. Thailand's economic outlook is further clouded by global uncertainties, including trade tariffs under the former US administration.

 

Although some tariffs on Thai goods have been temporarily eased, a 10% levy policy continues to cast a shadow over the economy.

 

In response to the economic challenges, CIMBT has revised Thailand's GDP growth forecast for 2025 down to 1.8% from 2.7%, with exports anticipated to grow by just 1.4%. Amonthep suggests a technical recession is unlikely, pegging its probability at around 20%, though potential slowdowns in upcoming quarters could occur.

 

The Bank of Thailand is expected to mitigate the economic impact by reducing its policy rate further, likely bringing it down from 2% to 1.25% by year-end. Capital outflows and reduced tourism revenue will likely weaken the baht, predicted to dip to 35.20 per dollar by December.

 

With persistent global challenges and problematic investment practices, Thailand's economic trajectory remains uncertain, warranting close attention and strategic intervention.

 

Based on a story by The Thaiger

 

-- 2025-04-11

 

 

[Tropicalevo]

5 minutes ago, webfact said:

These zero-dollar exports involve trade activities that contribute little to local economic growth, employment, or profits, as foreign firms execute operations in Thailand.

 

China has been doing this in Thailand forever.

Nothing to do with 'power drunk' Trump.

[Geoffggi]

42 minutes ago, webfact said:

These zero-dollar exports involve trade activities that contribute little to local economic growth, employment, or profits, as foreign firms execute operations in Thailand.

 

Finally, the penny drops !! many on this forum myself included have been pointing this fact out on numerous occasions

[Barnet1900]

Won't matter to those in power. They get their palms greased so the local economy can go whistle as far as the elite are concerned. 

 

Shouldn't blame the Chinese. If the zero-caring elite allow them to do it why blame China? Like putting a steak on the floor and kicking the dog for taking it.

 

Always someone else's fault

[whiteman]

When will they ever learn

[NorthernRyland]

What Trump is confronting is a problem globally it seems. Maybe tariffs aren't the solution but trading with China seems to be presenting challenges that need to be addressed.

[BayArea]

13 hours ago, Tropicalevo said:

Nothing to do with 'power drunk' Trump.

now, now don't point out the obvious. the haters blame everything on him.

[BayArea]

2 hours ago, NorthernRyland said:

What Trump is confronting is a problem globally it seems. Maybe tariffs aren't the solution but trading with China seems to be presenting challenges that need to be addressed.

this is the most sensible post on the tariffs imposed by Trump without bashing the man. 

[BayArea]

3 hours ago, whiteman said:

When will they ever learn

not as long as the Chinese HiSo families dominate Thai finance and politics.

[Gknrd]

I am always shaking my head. Thailand opens their arms to China, pushed the US out almost completely. Then complains when they do not invest in Thailand.  And now China has its own problems. 

Really Thailand picked their partner China yeas ago and are stuck with it now.  Really not an option at this point.

 

Why would any company want to invest in Thailand with them openly courting China. Hope it works out for you guys but Thailand is a thing of the past for savvy US investors.

[it is what it is]

3 hours ago, whiteman said:

When will they ever learn

 

assume you're referring to americans, this whole mess is due to american citizens

[hotchilli]

22 hours ago, webfact said:

Despite Thailand's potential as a manufacturing hub, "zero-dollar" investments, particularly from Chinese firms, pose significant threats by offering negligible economic benefits to local industries.

While the masses of Thailand love buying/trading the cheap fayre from China they will never become a manufacturing hub.

To do that they have to price out China and start manufacturing themselves, something they can't do or can't compete in the real world.

[mfd101]

Not sure I understand what a 'zero-dollar investment' is. ?

 

(I had understood for example that many vehicles on the road in Thailand - of many brands - are at least assembled - but not manufactured? - in Thailand.)

[renaissanc]

Thailand still hasn't realised that China is a predator, not a friend.

[RocketDog]

18 minutes ago, renaissanc said:

Thailand still hasn't realised that China is a predator, not a friend.

Agree. Like most of the countries on the planet have for far too long.

 

That has been slowly changing the last few years though thankfully.

[Thingamabob]

Thailand suffers from an elite who couldn't care less about how it's market manipulations affects poorer Thais, and a historical subservience to China which was only briefly interrupted from the 1950s through to the 1980s during which there were fears of a CPC inspired communist takeover.

[Cameroni]

2 minutes ago, Thingamabob said:

Thailand suffers from an elite who couldn't care less about how it's market manipulations affects poorer Thais, and a historical subservience to China which was only briefly interrupted from the 1950s through to the 1980s during which there were fears of a CPC inspired communist takeover.

 

The thing is about 60% of Thais have Chinese ancestry mixed in. As a country Thailand is racially inclined to support China. Much like Singapore though on a slightly lesser scale.

[Thingamabob]

8 minutes ago, Cameroni said:

 

The thing is about 60% of Thais have Chinese ancestry mixed in. As a country Thailand is racially inclined to support China. Much like Singapore though on a slightly lesser scale.

...which holds Thailand back in many ways.

[JustinTyme]

So let me see if I understand this.  Thailand does NOT want foreign investment because it is "zero dollar?"  What does that even mean?   A company invests in Thailand, but ... no one buys material to build a building, no one is hired to build it, the factory workers are not Thai?  The goods magically get transported without Thai trucks and drivers?  The business does not pay taxes? No one in the company eats, or lives indoors? No one goes to the dentist, the doctor, for a massage, takes a taxi, buys a motorbike / car, etc etc etc?

Can someone please explain how a country close to a recession does NOT need Foreign Investment?

[Cameroni]

3 minutes ago, Thingamabob said:

...which holds Thailand back in many ways.

 

it can be both an advantage and a disadvantage, to be sure. But there can be no doubt that the gigantic influx of Chinese into Thailand has resulted in an overwhelmingly pro-Chinese national sentiment in Thailand. It started in the 1100s, almost 1000 years ago.

 

 

 

 

[J Branche]

My knowledge is that many factors are involved when a foreign company decides to do business in China.

 

Cost of goods, landed (includes cost to manufacture, taxes in China, shipping, import fees, taxes, shipping cost to US warehouse if US company)

 

China has "Golden Shares" were China has full control of the company but owns only 1% of the stock 

 

 

[IsaanT]

2 hours ago, mfd101 said:

Not sure I understand what a 'zero-dollar investment' is ?

 

 

"Zero-dollar" refers to investments or business activities that bring little to no real economic benefit to the lcoal Thail economy, especially to its people. This term often implies that:

1. The capital or goods involved are entirely controlled or supplied by foreign entities (in this case, Chinese), without significant local involvement.

2. Local resources, labour, or services are minimally used, so the money generated doesn’t circulate within the Thai economy.

3. Profits are repatriated, meaning they're sent back to the investors' home country instead of being reinvested locally.

 

A related example is "zero-dollar tours", which refers to Chinese tour groups where Chinese-owned companies manage every part of the trip - from travel to shopping to accommodation - so Thai businesses don't benefit, even though the tours occur in Thailand.

In short, "zero-dollar" investments and exports are seen as a drain rather than a boost, because they generate economic activity on paper but don't help local communities or industries. That's why experts are concerned - it’s growth that looks good in stats but skips over the people.
 

[flexomike]

15 hours ago, whiteman said:

When will they ever learn

Kingston Trio 1960"s where have all the flowers gone

[JustinTyme]

17 minutes ago, IsaanT said:

 

"Zero-dollar" refers to investments or business activities that bring little to no real economic benefit to the lcoal Thail economy, especially to its people. This term often implies that:

1. The capital or goods involved are entirely controlled or supplied by foreign entities (in this case, Chinese), without significant local involvement.

2. Local resources, labour, or services are minimally used, so the money generated doesn’t circulate within the Thai economy.

3. Profits are repatriated, meaning they're sent back to the investors' home country instead of being reinvested locally.

 

A related example is "zero-dollar tours", which refers to Chinese tour groups where Chinese-owned companies manage every part of the trip - from travel to shopping to accommodation - so Thai businesses don't benefit, even though the tours occur in Thailand.

In short, "zero-dollar" investments and exports are seen as a drain rather than a boost, because they generate economic activity on paper but don't help local communities or industries. That's why experts are concerned - it’s growth that looks good in stats but skips over the people.
 

You are conflating "zero dollar tours" with an entirely different international investment model, and they have little in common.

[bkk6060]

I remember when I was young anything from China was a joke.  Everything was cheap and would break mostly imported little toys and trinkets.  Things sure have changed.

[Classic Ray]

Any zero -dollar Chinese steel reinforcement factories operating here? 
 

Serm to remember a massive explosion and fire in a chemical factory outside Bangkok a couple of years ago, wasn’t that Chinese-owned as well?

[JustinTyme]

35 minutes ago, Classic Ray said:

Any zero -dollar Chinese steel reinforcement factories operating here? 
 

Serm to remember a massive explosion and fire in a chemical factory outside Bangkok a couple of years ago, wasn’t that Chinese-owned as well?

Can you please explain how a factory can operate as a "zero dollar" entity?  Walk me through it, the raw materials, the machinery, electricity, the logistics equipment, the labor, the sales and marketing, taxes paid to Thailand, and on and on.  The Chinese who come to manage the plant do what?  Live under a bridge begging for food, or do they buy condos / build houses, buy cars, send their kids to international schools ...etc How exactly, do they magically operate and none of that generates revenue in Thailand???

[JustinTyme]

12 minutes ago, JustinTyme said:

Can you please explain how a factory can operate as a "zero dollar" entity?  Walk me through it, the raw materials, the machinery, electricity, the logistics equipment, the labor, the sales and marketing, taxes paid to Thailand, and on and on.  The Chinese who come to manage the plant do what?  Live under a bridge begging for food, or do they buy condos / build houses, buy cars, send their kids to international schools ...etc How exactly, do they magically operate and none of that generates revenue in Thailand???

 

On 4/11/2025 at 10:22 AM, Geoffggi said:

 

Finally, the penny drops !! many on this forum myself included have been pointing this fact out on numerous occasions

Can you please explain how a factory can operate as a "zero dollar" entity?  Walk me through it, the raw materials, the machinery, electricity, the logistics equipment, the labor, the sales and marketing, taxes paid to Thailand, and on and on.  The Chinese who come to manage the plant do what?  Live under a bridge begging for food, or do they buy condos / build houses, buy cars, send their kids to international schools ...etc How exactly, do they magically operate and none of that generates revenue in Thailand???

[Thingamabob]

4 hours ago, Cameroni said:

 

it can be both an advantage and a disadvantage, to be sure. But there can be no doubt that the gigantic influx of Chinese into Thailand has resulted in an overwhelmingly pro-Chinese national sentiment in Thailand. It started in the 1100s, almost 1000 years ago.

 

 

 

 

'..an overwhelmingly pro-Chinese national sentiment in Thailand..' ? Not in my experience.

[ronnie50]

These 'zero-dollar' Chinese tours were going on before the Covid shut down. They were complaining then and the government said they'd solved the issue back then. So why is it an issue again? I remember the news reports explaining the tour group would be picked up at the airport by a chartered bus, driven to their budget hotel - where they would eat breakfast each morning, then on the bus to see some Bangkok sights, before returing to the same budget hotel for lunch, then on the bus again probably to some Chinese-owned factory showroom (gems or whatever), then back to the hotel for dinner. Then back to airport and back to China - a week of eating every meal in the same restaurant.