Weakening Yuan will not affect Thailand in long run

[BSJ]

Even to the average Joe the signs of a deep recession have been building. Recession is the second last stop on the train to Depression. We haven't been to Depression for a long time. I am guessing but I think we will be there again soon.

[Srikcir]

About 10% of Thailand's GDP depends on exports to China.

Deflation of the yuan will damage that export trade unless Thailand can replace lost exports with other new trade partners. Prayut's current trade negotiations with various Pacific Island nations and Iran are insignificant. One immediate solution is to quickly join TPP but that might further deteriorate Thailand's trade with China and Russia given Prayut's political support for these countries.

In the long run there is more likelyhood the yuan will continue its downward slide and Thailand will follow. That's the problem with being partners: one for all and all for one.

[derator01]

Please stick to the topic and show respect to other members.

[Nigeone]

Weaking yeun won't hurt Thailand too much in the short term but I've felt for along time what's going on there in China isn't sustainable so have been expecting a Big Bang. Could be about to happen! And when it does it will!! affect Thailand along with so many other far more major currencies ..

[alant]

China is suffering a down turn, China is not bankrupt but will need to to pull in some of the monies owed.

So ever country that owes China money will soon find themselves under pressure to repay their debts.

Wow. Ignorant.

China has been selling loads of US Treasuries to raise cash because China is broke. Those treasuries have been absorbed by other international buyers. There is a regular and stable market for bonds and treasuries and China's big sales of US Treasuries haven't even had a marked affect on yields.

It is CHINA that is sucking air, dude.

HERE, Read up on China's sales of almost $2 trillion in US treasuries because China is broke and see how it has had NO impact on markets. In down times, people flee to safety and #1 is US treasuries.

I realize that idiots have said that the US owes China money and therefore China is on top. Doom was predicted for the US. But those people didn't understand that China has to hold USD to engage in international trade. They hold those dollars in treasuries because few will accept the Yuan as payment for anything.

NOW one has to wonder how China survives if it doesn't hold enough US treasuries to back its international trades. China is crashing and it's too broke to hold enough USD now so only time will tell...

Cheers.

China is broke, how would you class the USA who had to sell the treasuries in the first place? Of course you say no one will accept the Yuan for anything but I suspect the growth of Chinese influence around the world may lead me to a different conclusion.

One factor you are not including is the political situation, the Chinese do not need to pander to the electorate as most western countries do making it easier to fulfill economic policies to put thing back on track ( ref to railway projects intended).

[topt]

China is suffering a down turn, China is not bankrupt but will need to to pull in some of the monies owed.

So ever country that owes China money will soon find themselves under pressure to repay their debts.

Wow. Ignorant.

China has been selling loads of US Treasuries to raise cash because China is broke. Those treasuries have been absorbed by other international buyers. There is a regular and stable market for bonds and treasuries and China's big sales of US Treasuries haven't even had a marked affect on yields.

It is CHINA that is sucking air, dude.

HERE, Read up on China's sales of almost $2 trillion in US treasuries because China is broke and see how it has had NO impact on markets. In down times, people flee to safety and #1 is US treasuries.

I realize that idiots have said that the US owes China money and therefore China is on top. Doom was predicted for the US. But those people didn't understand that China has to hold USD to engage in international trade. They hold those dollars in treasuries because few will accept the Yuan as payment for anything.

NOW one has to wonder how China survives if it doesn't hold enough US treasuries to back its international trades. China is crashing and it's too broke to hold enough USD now so only time will tell...

Cheers.

Slight hyperbole Neversure?

According to your links we are talking 200 billion in sales (not 2 trillion) which still leaves them with well over 1 trillion.

Comment from Janet Yellen - http://www.reuters.com/article/usa-fed-yellen-china-idUSN9N0X501420151104

Nov 4 The head of the U.S. Federal Reserve said on Wednesday that China is selling U.S. Treasury bonds because the yuan is under depreciation pressure.

"China has been selling Treasuries because its currency has been under downward pressure," Fed Chair Janet Yellen told a committee of U.S. House lawmakers

[monkey4u]

Thailand can cure China's economy very simply

If ALL the people with unnatural and unexplained wealth made a donation to China

Problem solved

[wonder6281]

The difference between the Yuan and the USD is one is backed by gold and the by air!

[dageurreotype]

The Thai economy is strong and not depending of foreign companies ??????

If the Japanese auto industry leaves Thailand and some other industry their GDP will go down.

They believe in the touristindustry, but have no decent places for the groups Chinese visitors and a roundtour from a few days don't mean they will come back another time to Thailand.

The governmentdebt is growing and has no direct advantage for their GDP.

In Thailand they put "the horse behind the carriage"

But they are always uptimistic about their future

I hope Thai entrepeneurs will invest in all-inclusive resorts for the Chinese tourists, because there they can make big profit and don't wait till foreign companies will do it.

Good Luck

Yeah, it's kinda telling that the BP felt it necessary to reassure it's readers that the Telenor Group Where Definitely Not Leaving Thailand.

As Front Page news Hmmm.

Edited January 9, 2016 by dageurreotype

[Emster23]

"The Ministry of Finance and the Bank of Thailand have been instructed to develop measures to protect the Thai baht."

Those ministers can do what they want, as we have seen so often. Develop measures but for sake of Thailand, PLEASE don't implement them. Like pouring gasoline on a fire when they start intervening...

[cream]

A weakened Chinese economy will lead to less Chinese tourists. Surely that will have some effect on the Thai economy.

In the western world yes,

but not according to Thai Economics.

More Chinese and other foreign tourists will come and spend more money than ever.

It happens year after year according to the Thai Government and TAT.

Thailand is doing so well the Chinese, Europe and the US might possibly ask Thailand for a loan.

[sandyf]

A weakened Chinese economy will lead to less Chinese tourists. Surely that will have some effect on the Thai economy.

In the western world yes,

but not according to Thai Economics.

More Chinese and other foreign tourists will come and spend more money than ever.

It happens year after year according to the Thai Government and TAT.

Thailand is doing so well the Chinese, Europe and the US might possibly ask Thailand for a loan.

This is why the tourists keep coming.

[ramrod711]

The Deputy Prime Minister said the impact will only last 2-3 days

2 to 3 days? Does this seem odd to anybody else? Shouldn't it be months or years?

I wonder how this affects ASEAN or AEC.

2-3 days seems about right. The PM has a track record of claiming to solve these sorts of problems very quickly. Amazing how he does it really.

He probably took lessons from Chalerm, although he usually promised 3 months.

[sandyf]

I thought Chinese tourists are highly important for thai tourism. Weakening Yuan means lesser money spend on Thai vacations...

What on earth makes you think the Yuan has weakened.

2 Years ago we were paying 5 baht for Yuan, last year it was 5.2 baht and today it is 5.5 baht. Weakened against the dollar but against the baht only just come off the high of 5.65.

Thailand is still 10% cheaper for the Chinese than it was 2 years ago.

The Yuan has not only weakened but has actually been devalued by China already this week, what are you on about ? They only just devalued it this week, patience young padwan, give it time to flow downhill into the markets

When we came to pay the university fees last year we bought the yuan for 5.22, do you really think there is going to be a 5% devaluation against the baht in the next few months, in my dreams. Even if the fees remain the same we acknowledge the fact it will be in the order of 5% more than last year.

[Nobb]

B.S. with you buying Chinese Steel for your new rail system you will be over charged for years. Another sweet deal by the junta government!

[Robbie Dye]

Less Baht required to repay loans??

[saakura]

Is that big sign still up on the way from Suvarnabhumi into town proclaiming the Yuan as the new world currency?

I think they have quietly taken it down, have not noticed it the last few months.

[jeffreysearch]

China is suffering a down turn, China is not bankrupt but will need to to pull in some of the monies owed.

So ever country that owes China money will soon find themselves under pressure to repay their debts.

Oh, you forgot to read the other thread that points out that China's national debt is 300% of its GDP. That's an over the moon amount, son.

Cheers.

You should inform wikipedia because what I read is that the debt to GDP ratio of the US is way higher than that of China.\

https://en.wikipedia.org/wiki/List_of_countries_by_public_debt

https://en.wikipedia.org/wiki/List_of_countries_by_external_debt

Yes the US certainly has a serious Debt problem ( or Spending problem ) but as the are the Reserve currency ... they are the `Cleanest dirty shirt compared to the other currencies .. yes when people feel at risk .. they go to the safest place ... But .. .that place is heading for a Cliff .. sometime in the future .. many Believe ... Cheers :-)

[Thian]

China is suffering a down turn, China is not bankrupt but will need to to pull in some of the monies owed.

So ever country that owes China money will soon find themselves under pressure to repay their debts.

Oh, you forgot to read the other thread that points out that China's national debt is 300% of its GDP. That's an over the moon amount, son.

Cheers.

You should inform wikipedia because what I read is that the debt to GDP ratio of the US is way higher than that of China.\

https://en.wikipedia.org/wiki/List_of_countries_by_public_debt

https://en.wikipedia.org/wiki/List_of_countries_by_external_debt

Yes the US certainly has a serious Debt problem ( or Spending problem ) but as the are the Reserve currency ... they are the `Cleanest dirty shirt compared to the other currencies .. yes when people feel at risk .. they go to the safest place ... But .. .that place is heading for a Cliff .. sometime in the future .. many Believe ... Cheers :-)

Problem is also that the USA produces nothing that the rest of the 1st world wants to buy from them. Except airplanes and weapons that is.

[Prbkk]

What about all those Chinese tourists I see around CM,are they unaffected by it by being in Thailand?

They are insulated from it because they tend to come on wholesaler packages and those guys book tens of thousands of flights and rooms...and have the clout to negotiate.

I would have thought that given these uncertainties with the Yuan Thailand might be well-placed to hold or grow its Chinese numbers: Pattaya and Chiang Mai must look pretty cheap and cheerful to Chinese eyes. Let's face it: Thailand is on permanent sale and prices are at 20 year lows.

[MaeJoMTB]

I'd rather have USD than Yuan.

But,

I'm assuming all these people who think China is fine are holding all their money in Yuan?

[Thian]

What about all those Chinese tourists I see around CM,are they unaffected by it by being in Thailand?

They are insulated from it because they tend to come on wholesaler packages and those guys book tens of thousands of flights and rooms...and have the clout to negotiate.

I would have thought that given these uncertainties with the Yuan Thailand might be well-placed to hold or grow its Chinese numbers: Pattaya and Chiang Mai must look pretty cheap and cheerful to Chinese eyes. Let's face it: Thailand is on permanent sale and prices are at 20 year lows.

I haven't noticed that but i don't book hotelrooms.

Sale i even don't believe that anymore, many products are just always in the sale with 50% off but still not cheap.

What prices are at 20 year lows? I can't name any.

[MaeJoMTB]

What prices are at 20 year lows? I can't name any.

Diesel is down to 20bht/liter,

Seems low to me.

[Echo Tango]

Thailand will have to devalue the Baht if it wants to stay competitive, especially if China devalues the Yuan even further, which it will. Thailand can't, and won't, burn-through its FX reserves defending the baht. They'll need it later in case things get really bad!

It's strange they would make an announcement like this right now. Perhaps they're having some

'capital outflow' issues...hmmmmmm?

My Baht forecast is: 1 USD = 38.00 THB within 3 months.

[Stargeezr]

Don't worry about China. We are all on the same ship steaming ahead

in a great rush. Nothing to worry about at all. OH! is that an Ice burg

straight ahead?

[TheCruncher]

What prices are at 20 year lows? I can't name any.

Diesel is down to 20bht/liter,

Seems low to me.

95 Benzene was around 9 Bht/liter 20 years ago, diesel probably lower.

[englishoak]

What prices are at 20 year lows? I can't name any.

Diesel is down to 20bht/liter,

Seems low to me.

95 Benzene was around 9 Bht/liter 20 years ago, diesel probably lower.

And that is nothing to do with Thailand in the slightest.

Name something Thailand is responsible for setting price of that is as cheap as it was 20 years ago ?

I cant think of one thing.

[Prbkk]

What about all those Chinese tourists I see around CM,are they unaffected by it by being in Thailand?

They are insulated from it because they tend to come on wholesaler packages and those guys book tens of thousands of flights and rooms...and have the clout to negotiate.

I would have thought that given these uncertainties with the Yuan Thailand might be well-placed to hold or grow its Chinese numbers: Pattaya and Chiang Mai must look pretty cheap and cheerful to Chinese eyes. Let's face it: Thailand is on permanent sale and prices are at 20 year lows.

I haven't noticed that but i don't book hotelrooms.

Sale i even don't believe that anymore, many products are just always in the sale with 50% off but still not cheap.

What prices are at 20 year lows? I can't name any.

Hotels. Many of the hotels are charging the same rates as they were 20 years ago. When the 5 star places used to quote in USD, typically in that era they were in the 80-120 $ range, now for the same or equivalent property it is 3-4000 Baht on a discount. Effectively no change ( in fact less factoring in inflation).

It's a good deal for tourists and it looks like continuing ( nothwithstanding the prediction of a 10% increase on another thread)

[Thian]

What about all those Chinese tourists I see around CM,are they unaffected by it by being in Thailand?

They are insulated from it because they tend to come on wholesaler packages and those guys book tens of thousands of flights and rooms...and have the clout to negotiate.

I would have thought that given these uncertainties with the Yuan Thailand might be well-placed to hold or grow its Chinese numbers: Pattaya and Chiang Mai must look pretty cheap and cheerful to Chinese eyes. Let's face it: Thailand is on permanent sale and prices are at 20 year lows.

I haven't noticed that but i don't book hotelrooms.

Sale i even don't believe that anymore, many products are just always in the sale with 50% off but still not cheap.

What prices are at 20 year lows? I can't name any.

Hotels. Many of the hotels are charging the same rates as they were 20 years ago. When the 5 star places used to quote in USD, typically in that era they were in the 80-120 $ range, now for the same or equivalent property it is 3-4000 Baht on a discount. Effectively no change ( in fact less factoring in inflation).

It's a good deal for tourists and it looks like continuing ( nothwithstanding the prediction of a 10% increase on another thread)

10 years ago i stayed long in the Asia hotel BKK, 1500 baht a night for the cheapest room.

Now it costs 2500 baht a night or more exc.l tax

http://www.sawadee.com/hotel/620105/Asia-Hotel-Bangkok&p=sawasdee.com

10 years ago Chaweng cove resotel Samui, garden bungalow with breakfast was 2500 a night during the tsunami (christmas).

Now 4500 a night for the same bungalow and not even at christmas, they won't show that price.

Maybe in that period the us$ was low? But if i compare the prices for Europeans (americans rarely came here 10-15 years ago) it only costs more.....and 5 star in thailand would be 3-4 stars in Europe.

[sandyf]

Hotels. Many of the hotels are charging the same rates as they were 20 years ago. When the 5 star places used to quote in USD, typically in that era they were in the 80-120 $ range, now for the same or equivalent property it is 3-4000 Baht on a discount. Effectively no change ( in fact less factoring in inflation).

It's a good deal for tourists and it looks like continuing ( nothwithstanding the prediction of a 10% increase on another thread)

Typical misrepresentation, hide the increase in the rate of exchange. Comparisons must be made on an equal footing.

Quote your hotel price in baht from 20 years ago and the current price for the same hotel.

One example, over the last 15 years I have regularly used the Eastiny Seven in Pattaya, prices have gone from 700 baht /night to about 1500 baht/night. Actual price depends on how you book, walk in or online.

I wouldn't dispute your last sentence, Thailand is without a doubt a good deal for tourists.