Thailand strives to tackle cheap imports

The Bank of Thailand recently backed government initiatives to address the issue of cheap Chinese products flooding the Thai market.

According to Piti Disyatat, secretary of the central bank’s Monetary Policy Committee (MPC), Thailand has consistently recorded a trade deficit with China since 2001.

The price index of imported goods from China is lower than the overall index for all imported products, he said, stressing that the influx of Chinese goods has affected Thailand’s manufacturing sector at various levels, depending on each specific industry.

According to Piti, this situation has also contributed to maintaining Thailand’s inflation rate at a low level. While low inflation benefits consumers by reducing living costs, it negatively affects the manufacturing sector and overall competitiveness.

Locally made products such as electrical appliances, textiles and furniture are expected to continue to face pressure from an avalanche of Chinese goods. Meanwhile, some industries, such as automobiles and their suppliers, are experiencing difficulties based on Thailand’s uneven economic recovery, said Piti.

According to the bank, sectors experiencing a weak recovery include the auto industry, integrated circuits and hard disk drives. These industries account for 6% of GDP, 5% of total employment, and 6% of all business operations.

Industries facing an unclear rebound include property and construction, and agriculture.