Is Thailand's Future More Grim Than People Think?

[Jingthing]

Now we have a rising China and India, a hurting America, and a rich Russia.

Thailand can't really compete with China for slave labor and its education system is way inferior to both India and China. It is xenophobic and protectionist compared to an advanced small country like Singapore. The English standard is horrible; even the educated Chinese are learning English. Tourism is always an earner and tourism will increase from China and India and decline from the west (energy costs) but as many have noticed, Thailand has a special talent of killing the goose that lays the golden egg. Its politics have been mired in crisis for years, and there is no clear resolution in sight. The rice price increase is one bit of positive news.

So, how does Thailand fit in this new world order, especially in relation to China (look what happened to Burma)>

[lannarebirth]

Have you been to China lately? Inflation is the talk on everyone's lips. Workers want pay raises.

If it's not the most corrupt nation on earth it only trails a couple of African nations. It's got 1.3 billion mouths to feed and it is currently undergoing a period of the greatest disparity in wealth anywhere. Trouble brewing in China. Most MN manufacturer build one plant outside China for every 2 yjey build inside, just to stay safe. I expect that ratio to move towards parity as other nations in Asia beat the "China Price".

Here's a blurb I got in my Inbox recently:

A Value Investor Looks At China

By Vitaliy Katsenelson

What do Starbucks and China have in common? A lot! Both got us hooked on consumption: one of fancy, expensive caffeinated liquids; the other on cheap foreign made goods. Both have defied the conventional wisdom - they grew faster and longer than common sense told us was possible. They also share another striking commonality: both are suffering from late stage growth obesity (LSGO).

The Starbucks story

With the beautiful benefit of hindsight we know what happened to Starbucks - it grew too fast, opened too many stores, and sacrificed its own standards to meet unrealistic targets. The company first claimed that it only had a few hundred stores that it needed to close, and then the few hundred spilled into six hundred. Weak consumer spending will likely push Starbucks to re-examine its store count again, doubling or tripling the store closures.

Starbucks percentage of new stores growth in 2007 was only slightly lower than it was in 1999. But in 1999 it had 2,000 stores; in 2007 it was pushing a 10,000 company owned stores mark. Let's put this in perspective: in 1999 Starbucks opened 447 stores - 1.8 stores per working day; in 2007 that number more than tripled to 1,403 stores a year - 5.5 stores per working day. At this level of growth physical limitations come in: there is only so much real estate that fits a company's criteria at a certain point in time. Management started sacrificing on the quality of their decisions, compromises were made that were unthinkable several years before. Stores were opened too close to each other or on the wrong side of the street, expensive leases were signed, they even hired baristas that would have fit in better at McDonalds - you get the idea.

Unfortunately the present and the future will pay for the decisions of the past: stores will need to be closed, long-term leases terminated, charges taken, corporate costs created in hopes of high growth eliminated, and corporate culture of partnership strained by barista layoffs.

Starbucks needs to go on a permanent growth diet (at least in the US), and realize that it has the metabolism of a 37 year old and can digest fewer new stores. By tightening its standards for opening new stores the company will be on the way to recovery, though at slower growth. Starbucks is blessed with financial strength, capable management and unbelievable brand. If management admits to themselves that the heydays of growth are behind, recovery should be fairly painless. Starbucks generates tremendous operating cash flows, which in the past were completely consumed by opening new stores. If the company were to go on the LSGO diet, its capital expenditures would decline and free cash flows balloon - the value unlocked.

But this discussion is not about Starbucks, it is about what is taking place in China.

The Great China story

The benefit of hindsight that provides clarity in analysis of Starbucks today is not there for China, at least not yet. But if you were to open your mind and look past today's cheery newspaper headlines you'd see that China is suffering from a severe case of LSGO.

Ten for ten. Since 1998 its GDP has grown at about a 10% annual real growth rate, and its economy more than tripled in size (in real terms). There were no recessions, just expansion - the Chinese miracle growth? The origins of China's tremendous growth are well known: large population migrating from low (farming) to higher productivity (manufacturing) activity, cheap labor, a capitalism-friendlier communist government, and insatiable demand from the US and the rest of the developed world for cheap goods.

Unlike Starbucks - a private enterprise that has free market principles deeply inbred in its DNA - China is a communist country. Though it is moving towards free market capitalism, it is not there yet. The rule of law is weak, the country infested with corruption, and due to central planning and tight government control of the banking system capital is often allocated based on cronyism (or political relationships) not merit.

Prolonged high growth in this environment results in inefficiencies that are compounded year after year. In other words, though the growth is high, the quality of growth is low, thus asset allocation decisions are likely to be poor. The ten year super-high growth marathon put China at high risk, actually more likely of a certainty, of a severe case of LSGO.

From today's perch we can only guess of the consequences of LSGO, but we'll gain that clarity after the fact - a luxury we don't have. Newspapers that are praising the Chinese growth miracle today will write exposes on what went and is going wrong in China.

I have absolutely no facts to back up what I am about to say, but it is not hard to imagine future stories about poverty stricken farmers that moved to big cities for a better life and found despair; or that inland migration (from farming to factories) only brings a onetime productivity jump as poorly educated farmers-turned-factory-workers add little to productivity improvements afterwards; or how weak and debt ridden the financial system is; or the devastating impact that pollution has on health and productivity; or how the biggest shopping mall in the world, that happens to be in China, is almost completely empty.

Oh wait, the story about the shopping mall is not a figment of my imagination (I am not that good) but has already taken place. In 2005 NY Times ran an article titled China, New Land of Shoppers, Builds Malls on Gigantic Scale, it talked about the biggest shopping mall in the world that happened to be in Dongguan, China. The article said:

"Not long ago, shopping in China consisted mostly of lining up to entreat surly clerks to accept cash in exchange for ugly merchandise that did not fit. But now, Chinese have started to embrace America's modern "shop till you drop" ethos and are in the midst of a buy-at-the-mall frenzy.... by 2010, China is expected to be home to at least 7 of the world's 10 largest malls... Already, four shopping malls in China are larger than the Mall of America. Two, including the South China Mall, are bigger than the West Edmonton Mall in Alberta, which just surrendered its status as the world's largest to an enormous retail center in Beijing." (emphasis added)

Fast forward three years and you find a very different story: the biggest mall in the world - the South China mall, with space for fifteen hundred stores, only has a dozen stores open for business - it is empty. Shoppers never materialized. Billions of dollars have been wasted.

Analyzing the Chinese economy while it is growing at superfast rates is like analyzing a credit card company or a mortgage originator during an economic expansion - all you see is reward - the growth. But the defaults - the risk - are masked by a healthy economy and constantly increasing new business that is profitable at first. The true colors of that growth only appear after the economy slows down and new accounts mature. (In fact, the banks or credit card companies in the U.S. that showed the lowest loan growth during last expansionary cycle have a lot fewer credit problems than those that did - U.S. Bank Co comes to mind here.)

The consequences of LSGO are likely to be very painful for China. As of today we don't know how much of the recent growth came from wasteful, unproductive growth. Only after a slowdown will the true problems surface.

The Speed. What makes things even worse is that China cannot afford a slow down. I discussed this in the past but it is worth repeating. The Chinese economy is like the bus from the movie "Speed". In the movie the bus is wired by a villain (played by Dennis Hopper) with explosives, and will explode if its speed drops below 50 miles per hour. The Chinese economy has 1.3 billion unsuspecting people on board. It could blow if economic growth drops below its historical pace.

A combination of high financial and operation leverage sprinkled with past high growth rates will send this economy into a severe recession if growth rates slow down. Let me explain:

High operational leverage. China has become a de facto manufacturer for the world. With the exception of food products, it is difficult finding a product that was not, at least in part, manufactured in China. Industrial production accounts for 49% of GDP, double the rate of most developed nations (i.e. industrial production for the United States is 20.5 % of GDP, UK 18.2% , and Japan 26.5%).

Chinese miracle growth is largely driven by the manufacturing sector; historically its industrial production grew at a faster rate than GDP. The manufacturing industry is very capital intensive. Building factories requires a large upfront investment. High commodity prices and rapid wage inflation has driven those costs up. Once a factory is built the costs of running it are to a large degree independent of the utilization level - they are fixed - a classical definition of operational leverage. On top of these factors, laying-off workers is a politically sensitive process in China, which creates another layer of fixed costs.

High financial leverage. Debt is the instrument of choice in China. Due to a lack of equity-fund- raising alternatives (their stock market is very young), bank debt and underground finance companies that charge very high interest rates are the predominate sources of capital in China - this generates a great degree of financial leverage. (Though according to my friend Bill Mann, The Motley Fool's advisor of Global Gains newsletter, a frequent visitor to China, state owned enterprises are much more leveraged than private enterprises.)

Total operational leverage. Large piles of debt (financial leverage) combined with high fixed costs (operational leverage) create a very high total operational leverage.

Total operational leverage in China is elevated further as factories are built to accommodate future demand - this is a classical byproduct of LGSO. It is a human tendency to draw straight lines and thus making linear projections from the past into the future. During the fast growth period the angle of the straight lines is tilted upward, causing an over investment in fixed assets, as inability to keep up with demand may cause manufacturers to lose valuable customers. (Fear of over investment is overrun by fear of losing customers.)

This type of thinking results in tremendous overcapacity when demand cools. Here is an example: let's say a company saw demand for its widgets rise 10% year after year. It builds a new factory to accommodate future demand, let's say five years. It will likely model a 10% annual increase in demand as well. But what if demand comes in at 6% a year over the next five years? This will translate into overcapacity - not 4% but 20% (4% per year times five years). Suddenly you don't need to build factories or add capacity for awhile.

This greatly leveraged growth is terrific as long as the economy continues to grow at a fast pace: sales rise, costs rise at a slower rate (in large they are fixed) - margins expand - the beauty of leverage. However, leverage is not so sweet and soft when sales decline. Overcapacity is a death sentence in the manufacturing (fixed costs) world. As companies face overcapacity or slowdown in demand, they try to stimulate sales by cutting prices, which in part lead to price wars (similar to what we observed in the U.S. between Sprint, MCI and AT&T in the long distance business during the mid 90s) and to a fatal deflation. Sales decline, costs remain the same - margins collapse.

The weakness in the US and European economies will temper demand for Chinese made goods. China is already showing first signs of slow down - inflation is increasing and rate of real growth is decreasing.

It gets worse: high commodity prices

Chinese demand for stuff (oil, metals, machinery etc...) has a tremendous impact on commodities, driving their prices many fold. High (and rising) commodity prices are negative for developed world economies but they are catastrophic to developing economies - they bring comparatively higher inflation and often stagflation. Here is why:

Inflation is sourced from two broad categories: commodities (stuff) and wages. Emerging markets are twice as cursed when it comes to inflation:

Commodity prices (less shipping costs and government controls - the Chinese government limits price increases on certain commodities, but we know that doesn't work in the long-term) are the same around the world. Thus the U.S. and China will see a similar increase in commodity prices (at least in dollar terms). But the commodity component represents a larger portion of the total product cost in China than in the U.S., as wages in China are a less significant component of a total cost. For instance, bread baked in the U.S. and China will require the same amount of wheat and wheat will cost as much. But baker wages will be significantly larger in the U.S. than in China and will result in a much higher cost of the finished product. Therefore, a spike in wheat prices will have a larger impact on the loaf of bread in China than in the US.

Wage inflation: the US and Europe have little wage inflation, as rising unemployment has diminished the already weak bargaining power of the labor force, keeping wages in check. Economic expansion has put significant upward pressure on wages inflation in China (and India as well).

In combination, these two factors were responsible for inflation in high single digits in China, double the rate of inflation in the U.S.

China is not the cheapest place in the world to manufacture, not anymore. To its benefit, cheaper countries (Singapore, Vietnam etc...) are not big enough to steal a significant amount of capacity and the US in many cases doesn't have the needed infrastructure to bring manufacturing back. Appreciation in the renminbi and high oil prices (which are driving shipping rates up, placing a significant premium on the distance factor) are making Chinese produced goods even less attractive. Something has to give: either the U.S. will consume less or China will keep prices low to stimulate the demand, swallowing the loss, or a combination of both.

It gets even worse...

I constantly catch myself wanting to say "the story only gets worse", but unfortunately it does. The US and Europe can cope with energy and food inflation a lot better than China and other developing nations, as we spend a lot less on food and energy as a percent of our income and have a lot more discretionary income. (Just take a look at magazine section in the book store. There is probably a fishing magazine for the left handed fishermen.)

Though the Chinese consume a lot less gasoline than Americans. They don't have as many cars and don't drive as much, but they do have stomachs - they eat. High energy prices have translated in food inflation that in China runs in the high teens. The average American family spends only 15% of their household budget on food, whereas the Chinese spend 37% . Maybe this is one of the reasons their shopping malls are empty. People that pay high gasoline prices but are full don't riot, but hungry people do. The current situation raises political risk in China and also the chances that government (social) intervention will rise. This also puts in doubt the significant development of a Chinese middle class, at least in the near future.

When I wrote an article for Financial Times in May discussing risks in stuff stocks (commodities, energy and industrials) I called today's environment "a global commodity bubble". I was imprecise, after a conversation with the brilliant Ed Easterling of Crestmont Research (by the way, Ed wrote "Unexpected Returns" - a must read) and reading a wonderful interview with James Montier by Kate Welling, I'd like use James' more precise definition of today's environment: a "global growth expectations" bubble. After all, it is the supply demand (to a large degree) that was responsible for this unprecedented growth in "stuff", shifting the mentality of the market into "this time is different" gear. It is not.

In the past "stuff" stocks were cyclical, their margins played a very predictable foxtrot of bouncing together with the whims of the US economy. Today they are behaving if as Google is their middle name - their sales are climbing in double digits, margins keep expanding and now they are called "growth" stocks. They are not. It is just Chinese late stage growth obesity, which has disproportionately impacted the demand for stuff, creating an expectation that the "growth story" will continue forever. Nothing is forever. Starbucks discovered that and so will China. China is likely to have a bright future, but it doesn't consist of straight to the sky growth trajectories.

Implications. Demand for commodities will decline, while more supply from past investments (there is a significant lag) will be coming to the market - they'll come crushing down to earth. Companies that make stuff will suffer, their margins are at multi-multi-multi-year highs, margins pendulum will swing the other way, to the other extreme. Suddenly they won't appear to be as cheap. (Take a look at my January Barron's article in which I discuss the risk in corporate margins and May Financial Times article which explores China and stuff stocks.)

http://www.carnegieendowment.org/files/pb5...ption_final.pdf

Edited August 13, 2008 by lannarebirth

[teacup]

Thailand goes through seasonal change of Ups DOWNs …… Just like a marriage, or stock market, or the USA, or any country in the world.

No different

[Jingthing]

Thailand goes through seasonal change of Ups DOWNs …… Just like a marriage, or stock market, or the USA, or any country in the world.

No different

That is really simplistic. Bad leadership can bring a country down fundamentally in dramatic ways, as happened in Burma which based on its natural resources should be much richer than Thailand. Name a country that Thailand is all that similar to? I find it rather unique.

I don't doubt China has big growing pains but it is now out there to the world and has over a billion people. Whatever happens there in even minute ways impacts the entire world in big ways and over time, this is only going to be even a bigger influence. To spell this out even more, I wonder if a hungry China will over time decide to just eat up Thailand, for its rice in the same way Russia wants to take back Georgia and the Ukraine. Seems to me farangs owning bungalows should be the least of Thailand's worries ... If you don't think China is an eat em up kind of power, look what they have done in Tibet, Burma, and now across Africa. Some people are celebrating the end of the American century and while Americans aren't angels, what are we replacing the vacuum with?

Edited August 13, 2008 by Jingthing

[lannarebirth]

Thailand goes through seasonal change of Ups DOWNs …… Just like a marriage, or stock market, or the USA, or any country in the world.

No different

That is really simplistic. Bad leadership can bring a country down fundamentally in dramatic ways, as happened in Burma which based on its natural resources should be much richer than Thailand. Name a country that Thailand is all that similar to? I find it rather unique.

I don't doubt China has big growing pains but it is now out there to the world and has over a billion people. Whatever happens there in even minute ways impacts the entire world in big ways and over time, this is only going to be even a bigger influence. To spell this out even more, I wonder if a hungry China will over time decide to just to eat up Thailand, for its rice in the same way Russia wants to take back Georgia and the Ukraine. Seems to me farangs owning bungalows should be the least of Thailand's worries ...

I think China has probably learned the lesson that Japan learned. If there's something you want, it's easier just to buy it than fight a war over it.

As for Thailand. Are you aware of anu countries that have adnced as far as Thailand has and the backslid appreciably? Maybe Argentina, maybe Iran? I don't know.

Anyhow, I'm optimistic. Most of the worst elements I see in Thailand are aging fast. I think the young people will do a better job.

[teacup]

Thailand goes through seasonal change of Ups DOWNs …… Just like a marriage, or stock market, or the USA, or any country in the world.

No different

That is really simplistic. Bad leadership can bring a country down fundamentally in dramatic ways, as happened in Burma which based on its natural resources should be much richer than Thailand. Name a country that Thailand is all that similar to? I find it rather unique.

Simplistic or not……it’s a reality

Look at Laos, Cambodia, or Vietnam…..look what they had been through in the past, and look at where they are now.

So I’m sure Burma too will rise again, may not be equal level to the glory past, but it will better than what we’re seeing today…..someday that is.

You are wrong in thinking that the natural resources alone can help the country elevated to the higher level. At the beginning it may be helpful but not in the long run. However the main and most important resource is infact the HUMAN RESOURCE.

Look at HongKong for example - not much in natural resources, but only the human capital.

[Jingthing]

Tell that to Russia and Saudi Arabia.

You need SOME resource. Natural. Human. Thailand doesn't appear to have that much in the natural department except for rice and it is way behind and doesn't even seem to be trying very hard to compete on the human resources front, if talking about skilled labor (poor level of education investment for the masses). Not to mention the social structures of a feudal society. If optimism cheers you up, go for it, but you know there are real FUNDAMENTALS behind the success and failure of nations. And there is also GEOGRAPHY. With the Sino-Thai segment of Thai society being so dominant in Thailand, and the country of China rising, and US becoming not even a paper tiger (it talks big but doesn't have any money anymore to back anything up) doesn't anyone else see where this might be heading? Add to that thought the continuous political instability here and the inevitable event we can't speak about ...

Edited August 13, 2008 by Jingthing

[canuckamuck]

Thanks for the article Lanna, interesting perspective, but man that guy loves to hear himself talk. He could have cut out about 80% of the article and made the same points.

As far as Thailand, there is a price to be paid for disregarding wisdom for face. The smackdown will come and then we will see what rises from the ashes. I'm gonna stay though, it should be interesting

[Naam]

Now we have a rising China and India, a hurting America, and a rich Russia.

Thailand can't really compete with China for slave labor and its education system is way inferior to both India and China. It is xenophobic and protectionist compared to an advanced small country like Singapore. The English standard is horrible; even the educated Chinese are learning English. Tourism is always an earner and tourism will increase from China and India and decline from the west (energy costs) but as many have noticed, Thailand has a special talent of killing the goose that lays the golden egg. Its politics have been mired in crisis for years, and there is no clear resolution in sight. The rice price increase is one bit of positive news.

So, how does Thailand fit in this new world order, especially in relation to China (look what happened to Burma)>

here we go again. a bunch of negative insinuations/assumptions without any tangible facts. all in all nothing but bla-bla starting with an "innocent" question and ending with one; no other intention than putting Thailand down!

have you started working on your chauffeur license for baht buses Jingthing?

Edited August 13, 2008 by Naam

[dee123]

...If only we could get get a fraction more slave labour jingthing,.....then i/m sure everything would be "just fine"

[teacup]

I don’t have enough knowledge in all the political and social problems, but only want to point out a few things.

Who said the gov’t hasn’t done anything for the country about the way it wants to change. You wouldn’t happen to know that….thoughtout the 80s, how much the gov’t had tried to bribe just about every educated thais from oversea to come back -with the offer of jobs and money incentives - but not many came back, I presume - because life is greener on the other side. You might ask “tinklelbell” she knows about this in details more than me. Yes I and she were part of that brain drain period. But I’m sure due to the global economy meltdown which is happening, I would assume many educated ones w/ experiences will start drifting back one by one, with the option of works or retirements I don’t know for sure. But most of them probably will be in their 40-50s or so, I don’t know if it will do any good or not, or it might just be too late. I havn’t given any thoughts of the effects on the country yet.

We can't change this country. The problem really lies in its people, how they think, their attitude towards governance and power. But once the majority of people say to themselves enough is enough...WE WANT CHANGES.... that’s when we will see the new attitudes toward everything - the new point of law of diminishing return. Then hopefully we will see most thais will begin to become part of the solution, not a part of the problem.

Yes I’m optimistic, ……and how can you go thru life without it? STRANGE

Edited August 13, 2008 by teacup

[PhilHarries]

Got all the way down to the bottom and forgot what the question was.

Oh yes "How will Thailand fit in the new wordl order?"

Whatever form this "new world order" takes I'd say Thailand will fit in just about the same as it does now. Supposing China maintains it's current growth (i.e. ignoring the long winded piece) and Russia becomes richer the question should be "how will the USA and EU fit in the new world order?" I don't think the slugfest between the top guns will affect the middle and lower order players on the world stage too much. You might find the bar girls of Pattaya becoming more fluent in Russian and Mandarin and less so in English but beyond that I don't see much change.

btw canuckamuck, agree with you regarding the War & Piece article. I got about halfway through it and started to lose the will to live.

[Shotime]

Got all the way down to the bottom and forgot what the question was.

Oh yes "How will Thailand fit in the new wordl order?"

Whatever form this "new world order" takes I'd say Thailand will fit in just about the same as it does now. Supposing China maintains it's current growth (i.e. ignoring the long winded piece) and Russia becomes richer the question should be "how will the USA and EU fit in the new world order?" I don't think the slugfest between the top guns will affect the middle and lower order players on the world stage too much. You might find the bar girls of Pattaya becoming more fluent in Russian and Mandarin and less so in English but beyond that I don't see much change.

btw canuckamuck, agree with you regarding the War & Piece article. I got about halfway through it and started to lose the will to live.

I would like to second everything you said.

Thailand could do a lot better for it's people though. Resources are important, and Thailand has some that could generate a lot of jobs and money for the people. As mentioned before, retirement from China, etc, is one. Whatever the problem is, government or the people, it can be resolved. There's enough for everybody, but I doubt that anything will change much. Just like you said.

[thaihome]

Typical post having no idea of what the Thai economy is about. Only talks about tourism and rice. Though both are important components, they are not the leading ones.

Are you aware that Thailand is a major exporter of manufactured goods and not just the unskilled labor items like textiles, but things like electronics and automobile? Thailand is the second leading exporter in the world of pickup trucks, over half the hard drives in world are made in Thailand. They have large and growing petrochemical business. I’m not saying that there are not problems, but people have to understand what drives the economy and tourism and rice are just part, and really some of the smaller parts.

I posted this link in another thread, certainly should go here as well. Hope some of you will actually read some the reports and get a much better idea about the Thai economy.

Economic Reports

TH

[Pierrot]

Got all the way down to the bottom and forgot what the question was.

Oh yes "How will Thailand fit in the new wordl order?"

... You might find the bar girls of Pattaya becoming more fluent in Russian and Mandarin and less so in English but beyond that I don't see much change.

Have you been lately to the bookshop in the Paragon shopping centre ? Look at the chinese section (books in chinese), it will give you an insight on what's coming.

In the company I'm working with in China, an increasing numbers of local employees are richer than the expats, bigger house, bigger cars, honeymoon in the Maldive ....

IMO the question should be "How will farangs in Thailand fit in the new world order?"

[RubbaJohnny]

Thailand is in my opiniona unique situation.Of course this does not immunise from world markets

THE USP for tourism is favourable.

Superb environment welcoming to PAYING GUESTS and not spongers welfare tourists or wasters

Very cheap relative to Western economies

A real historic documented living non-colonised Bhuddist culture.

Sukothai has more historical places of interest IMHO than Canada US and Oz put together.

While archaeology is not everyones bag the restrained timed out nightlife of Bangkok Patong and Pattaya still offer delights that puritan Washington Frozen Moscow wealthy but prudish Dubai cannot offer to the jaded palette.How many westerners have found Saudi wife? Thai women still love to love lucky us.

For the expat and tourist look at the competition in the region

Indonesia Poor Sleazy corrupt and Muslim

Malaysia as above with ex colonial attitude to Indians and institutionalized Racism and buggery passion

Vietnam gougers visa hassles

China have you tried working there I did ,living no thanks

India visa nightmare

Timor Leste, Cambodia,Philipinnes S lanka guerilla horrors grinding poverty and corruption

The only places with quality good climes like Oz Caribean Med cost a lot more and a v restrictive if non native.Retiring to Somalia Bolivia Cuba Saudi Araboia any takers I think not,its much nicer here.

The Thai economy is based on good fundamentals and while poorly managed it mainly stays here and foreign control is ltd.New links and proximity to China and India must be advantages.

Perhaps the canal thru the Isthmus of Kra will never happen but how many folks will wish to have anAfghan massage en route Sydney Europe?

Rice Oil Pal Oil tourism combined to complacent un-unionised workforce who do not expect universal health care proper univeristies health care and welfare is a superb environment for naked capitalism if not for social cohesion or individual rights.

Of course why look in the Crystal Ball when you can read the book.Moodys and standard and Poors will do it for you.

Chok Dee

[Samuian]

...an increasing numbers of local employees are richer than the expats, bigger house, bigger cars, honeymoon in the Maldive ....

IMO the question should be "How will farangs in Thailand fit in the new world order?"

Ah, well... so what, we will introduce a double pricing agenda in the EU and in the US - Chinese and other wealthy Asians pay ten times the amount!

How about that?

[Pierrot]

Thailand is in my opiniona unique situation.Of course this does not immunise from world markets

THE USP for tourism is favourable.

Superb environment welcoming to PAYING GUESTS and not spongers welfare tourists or wasters

Very cheap relative to Western economies

A real historic documented living non-colonised Bhuddist culture.

Sukothai has more historical places of interest IMHO than Canada US and Oz put together.

While archaeology is not everyones bag the restrained timed out nightlife of Bangkok Patong and Pattaya still offer delights that puritan Washington Frozen Moscow wealthy but prudish Dubai cannot offer to the jaded palette.How many westerners have found Saudi wife? Thai women still love to love lucky us.

For the expat and tourist look at the competition in the region

Indonesia Poor Sleazy corrupt and Muslim

Malaysia as above with ex colonial attitude to Indians and institutionalized Racism and buggery passion

Vietnam gougers visa hassles

China have you tried working there I did ,living no thanks

India visa nightmare

Timor Leste, Cambodia,Philipinnes S lanka guerilla horrors grinding poverty and corruption

The only places with quality good climes like Oz Caribean Med cost a lot more and a v restrictive if non native.Retiring to Somalia Bolivia Cuba Saudi Araboia any takers I think not,its much nicer here.

The Thai economy is based on good fundamentals and while poorly managed it mainly stays here and foreign control is ltd.New links and proximity to China and India must be advantages.

Perhaps the canal thru the Isthmus of Kra will never happen but how many folks will wish to have anAfghan massage en route Sydney Europe?

Rice Oil Pal Oil tourism combined to complacent un-unionised workforce who do not expect universal health care proper univeristies health care and welfare is a superb environment for naked capitalism if not for social cohesion or individual rights.

Of course why look in the Crystal Ball when you can read the book.Moodys and standard and Poors will do it for you.

Chok Dee

You forgot the Mediteranean coast. Probably one of the most beautiful place on earth, best place in the world for historical sites, and with the opening of former comunist countries, very cheap too!

Edited August 14, 2008 by Pierrot

[canuckamuck]

Thailand is in my opiniona unique situation.Of course this does not immunise from world markets

THE USP for tourism is favourable. what's a usp?

Superb environment welcoming to PAYING GUESTS and not spongers welfare tourists or wasters Yes those types find this place insufferable

Very cheap relative to Western economies Just don't buy a house or start a business

A real historic documented living non-colonised Bhuddist culture. Most Thai's behave like they haven't got a clue about the Buddhist methodology, it's seems to be all about ghosties and fortune tellers to them.

Sukothai has more historical places of interest IMHO than Canada US and Oz put together. Right, Sukothai is the size of a family farm in Canada, . Definitely a lifetime of discovery there.

While archaeology is not everyones bag the restrained timed out nightlife of Bangkok Patong and Pattaya still offer delights that puritan Washington Frozen Moscow wealthy but prudish Dubai cannot offer to the jaded palette.Yep Thailands got lots of ho's

How many westerners have found Saudi wife? consider it a blessing! Thai women still love to love lucky us. Cause your so hansome man

For the expat and tourist look at the competition in the region

Indonesia Poor Sleazy corrupt and Muslim

Malaysia as above with ex colonial attitude to Indians and institutionalized Racism and buggery passion

Vietnam gougers visa hassles Thailand is more of a hassle

China have you tried working there I did ,living no thanks I agree

India visa nightmare

Timor Leste, Cambodia,Philipinnes S lanka guerilla horrors grinding poverty and corruption I didn't notice corruption on your Thailand list. I guess there is none here.

The only places with quality good climes like Oz Caribean Med cost a lot more and a v restrictive if non native. Retiring to Somalia Bolivia Cuba Saudi Araboia any takers I think not,its much nicer here.

The Thai economy is based on good fundamentals Greed, corruption, no consequences for big offenders and while poorly managed it mainly stays here and foreign control is ltd Yeah because foreigners are bad with economics. New links ? and proximity to China and India must be advantages.

Perhaps the canal thru the Isthmus of Kra will never happen but how many folks will wish to have anAfghan massage en route Sydney Europe? err, how's the Afghan gonna get on the boat it's a landlocked country and BTW Afghan massages are performed by men and are apparenlty for the pleasure of the masseuse not the client.

Rice Oil Pal Oil tourism combined to complacent un-unionised workforce who do not expect universal health care proper univeristies health care and welfare A work force that can be exploited is a great treasure but I don't see how the connect with vegetable oil and tourists is a superb environment for naked capitalism oh now I see if not for social cohesion or individual rights. Ok now I am confused again

Of course why look in the Crystal Ball when you can read the book. Moodys and standard and Poors will do it for you. Did you read it before or after your Afghan massage?

Chok Dee

[thaidreaming]

Chinaa going to be rich. India too. All this people will go in thailand for holyday!!!

[Jingthing]

Typical post having no idea of what the Thai economy is about. Only talks about tourism and rice. Though both are important components, they are not the leading ones.

Are you aware that Thailand is a major exporter of manufactured goods and not just the unskilled labor items like textiles, but things like electronics and automobile? Thailand is the second leading exporter in the world of pickup trucks, over half the hard drives in world are made in Thailand. They have large and growing petrochemical business. I’m not saying that there are not problems, but people have to understand what drives the economy and tourism and rice are just part, and really some of the smaller parts.

I posted this link in another thread, certainly should go here as well. Hope some of you will actually read some the reports and get a much better idea about the Thai economy.

Economic Reports

TH

Yes, I was aware of the pickup trucks but didn't mention them, partly because I think China is in the long run going to be much more interested in the rice basket capabilities of Thailand. The era of cheap food is over. I recall a recent pronouncement from the Thai government that Thailand is going to become even more of an agriculturally based economy than it already is. With global warming, yes I think it is real, food and water are going to be as or more important as fuel.

No, I am not an optimist. I find attaching silly hopes and emotions to such things as the global power shifting to be irrational. Yes, I kind of am considering perhaps China will get out of hand as the US becomes more powerless. They are not a benign power. Their government is a totalitarian state. Again, look at Burma.

The USA, which has also not been a benign world power has something called the Monroe doctrine. This has rationalized making most of its geographical neighbors puppets of the USA. Rebels like Cuba have payed a big price. There have been many historical invasions by the US in the region. Do you seriously think a world power as emerging China is becoming, with a now huge military, will be any LESS aggressive over time to its neighbors than the USA?

To the poster who metioned farangs in Thailand. Yes, I agree we will become even less important than we already are here, which isn't very important to start with.

Edited August 14, 2008 by Jingthing

[barky]

In the big scheme of things, over time, (not in my life time), Thailand will (unless it undertakes some big changes), fall by the way-side. It will be dwarfed, and, in the fullness of time, be crushed by the large countries around it. In time, as a viable entity, Thailand will generally cease to exist.

[Pierrot]

Typical post having no idea of what the Thai economy is about. Only talks about tourism and rice. Though both are important components, they are not the leading ones.

Are you aware that Thailand is a major exporter of manufactured goods and not just the unskilled labor items like textiles, but things like electronics and automobile? Thailand is the second leading exporter in the world of pickup trucks, over half the hard drives in world are made in Thailand. They have large and growing petrochemical business. I'm not saying that there are not problems, but people have to understand what drives the economy and tourism and rice are just part, and really some of the smaller parts.

I posted this link in another thread, certainly should go here as well. Hope some of you will actually read some the reports and get a much better idea about the Thai economy.

Economic Reports

TH

Thailand just provide the workforce, Thailand is only a production base for Japan, nothing like China who has developed its own brands/industries. Besides chicken, wich Thai company is a world leader in any field?

But you're right, most of of TV readers have absolutely no ideas what drive the economy, which probably explains the large support for the democrats and the old elite.

Edited August 14, 2008 by Pierrot

[Soutpeel]

No problems for Thailand....very bright future....we will have all the mega-projects going on and Thailand will be a region hub for everything in South East Asia

[Jingthing]

To clarify a bit, I obviously don't have any special info about the motivations of China. Its just that in history, ancient and modern, when great powers create great wealth and huge armies, they almost always dominate their geographical neighbors. So I do wonder why would modern China be an exception? It is nothing new to them either (Viet Nam).

Frankly, this kind of thinking has come into my mind after watching the China Olympics opening ceremony with their 2008 regimented drummers. I think they were telling us something with that display.

here we go again. a bunch of negative insinuations/assumptions without any tangible facts. all in all nothing but bla-bla starting with an "innocent" question and ending with one; no other intention than putting Thailand down!

Special note to Naam: no, I really am just curious about this question. I posted it to learn what perhaps some more knowledgeable people might have to say about it. I can clearly see the people in charge of Thailand today are focussed on very small petty issues and don't mention bigger picture long term possible threats. It doesn't mean they don't exist.

Edited August 14, 2008 by Jingthing

[mizzi39]

To clarify a bit, I obviously don't have any special info about the motivations of China. Its just that in history, ancient and modern, when great powers create great wealth and huge armies, they almost always dominate their geographical neighbors. So I do wonder why would modern China be an exception? It is nothing new to them either (Viet Nam).

Frankly, this kind of thinking has come into my mind after watching the China Olympics opening ceremony with their 2008 regimented drummers. I think they were telling us something with that display.

Jingthing, why are you such a downer? For every hopeless comment you make, could you please try to counterbalance with a positive?

[Jingthing]

To clarify a bit, I obviously don't have any special info about the motivations of China. Its just that in history, ancient and modern, when great powers create great wealth and huge armies, they almost always dominate their geographical neighbors. So I do wonder why would modern China be an exception? It is nothing new to them either (Viet Nam).

Frankly, this kind of thinking has come into my mind after watching the China Olympics opening ceremony with their 2008 regimented drummers. I think they were telling us something with that display.

Jingthing, why are you such a downer? For every hopeless comment you make, could you please try to counterbalance with a positive?

I love pad krapow gai phet phet!

Did that work for you?

[canuckamuck]

Jingthing, why are you such a downer? For every hopeless comment you make, could you please try to counterbalance with a positive?

I know, how about China’s glistening human rights record and their determination to be upright and transparent in their dealings with both their own people and the international community, is sure to be a benefit to Thailand as they stretch out with their new superpowers to bless the Land o' Smiles with all the milk of human kindness characteristic of their last several decades of annihilating freedom in every form. The next Cultural Revolution could be yours. Remember when the USSR swallowed Eastern Europe. That was China’s mentor.

[Jingthing]

Canuck, well you went a little further than I would although I suspect you were being satirical. I wouldn't demonize China, any more than I would demonize the USA or Russia. Its just what super powers with large armies do, they use them. Is China so special? Seems doubtful.

Another perspective. There are alot more Chinese in the world than Thais. So for the benefit of the masses, China's emerging dominance could be seen as GOOD NEWS. Cheery enough for you?

Edited August 14, 2008 by Jingthing

[mizzi39]

Jingthing, why are you such a downer? For every hopeless comment you make, could you please try to counterbalance with a positive?

I know, how about China's glistening human rights record and their determination to be upright and transparent in their dealings with both their own people and the international community, is sure to be a benefit to Thailand as they stretch out with their new superpowers to bless the Land o' Smiles with all the milk of human kindness characteristic of their last several decades of annihilating freedom in every form. The next Cultural Revolution could be yours. Remember when the USSR swallowed Eastern Europe. That was China's mentor.

let me know when Armageddon arrives, I am sure that you will be the first to report here on TV