Warning Signs for Thai Trade as Chinese Imports Surge
PUBLISHED: 8 Aug 2024 at 04:45
The influx of Chinese industrial products is posing a significant threat to Thailand’s trade landscape, resulting in decreased market share within Southeast Asia and a staggering trade deficit with China approaching $20 billion, as reported by the Joint Standing Committee on Commerce, Industry, and Banking (JSCCIB).
The recent entry of a major Chinese retail platform into the Thai market is expected to exacerbate the situation, prompting the Federation of Thai Industries (FTI) to urge the government to implement higher tariffs on specific imported goods.
“Without proactive measures from the government to safeguard local industries, we risk seeing more businesses shut their doors,” stated the chairman of the Thai Bankers’ Association during the latest JSCCIB meeting.
In the first half of the year, imports from China rose by 7.12% year-on-year, totaling $37.5 billion, leading to a trade deficit of $19.9 billion—a 15.6% increase from the previous year.
Thai electrical appliance market share dipped to 11.5% in Q1, down from 12.7% year-on-year, while the automotive sector’s share fell to 18.7%, down from 20.9% during the same period.
These declines contributed to a 1.8% contraction in Thailand’s manufacturing sector in the first half of 2024, according to industry leaders.
The pressure is felt across 23 industries in Thailand, especially among small and medium enterprises, exacerbated by the competitive pricing of imported Chinese goods.
In the first half of this year alone, a staggering 667 factories closed, marking an 86.3% increase compared to the previous year, with an average of 111 closures per month.
Stakeholders are urging the government to consider applying tariffs on certain products under the Asean-China free trade agreement to fortify local manufacturers.
“We fear that the government’s current measures to limit Chinese imports may not be sufficient to protect Thai businesses,” an industry representative expressed.
