Thailand's trade deficit with China sparks concern amid uptick in imports

cross-posted from: feddit.org/post/2345951

Thailand’s Trade Policy and Strategy Office (TPSO) has expressed concern over the widening trade deficit between the country and China.

In the first six months of 2024, imports from China increased by 7.12% year-on-year, amounting to US$37.6 billion (roughly 1.33 trillion baht). This resulted in a trade deficit with China of $20 billion (about 720 billion baht), up 15.7% year-on-year.

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“The reason why Thailand and other countries around the world have a trade deficit with China is the mainland can manufacture products at a lower cost than other countries because of low labour costs, the availability of suppliers, a fixed exchange rate controlled by the government, which helps in setting export prices, and subsidies from the Chinese government which lower the average cost,” said Poonpong Naiyanapakorn, director-general of TPSO.

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In 2023, the top 10 products which Thailand recorded a trade deficit with China were: smartphones ($3.31 billion), computers and parts ($2.81 billion), hot-rolled steel sheet ($2.56 billion), electric vehicles ($2.54 billion), machinery and mechanical components (copy.88 billion), iron and steel products (copy.85 billion), chemical products (copy.77 billion), electrical appliances and parts (copy.46 billion), plastic products (copy.25 billion), and electrical circuits (copy.17 billion).

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TPSO has asked the government to enforce stricter import standards, especially for electronic and electrical appliances, regulate goods evading taxes, and rigorously apply domestic trade laws to ensure imported products meet health, environmental and safety standards.

The goal is to create an ecosystem that strengthens Thai businesses and the local supply chain for sustainable competitiveness, said Mr Poonpong.