BANGKOK: Thailand is estimated to lose as much as 187 billion baht by 2022 as China floods Cambodia, Laos, Myanmar and Vietnam (CLMV) markets with Chinese goods.
The situation arose after China actively moved into these markets for more than a decade, both before and after the Asean Economic Community (AEC) took effect in 2015.
According to University of the Thai Chamber of Commerce’s Centre for International Trade Studies director Aat Pisanwanich, a study found that China played an important role in trade and export in these countries in the last 15 years.
The study was on the trade and investment impact on Thailand and Asean from Chinese products in the four countries.
The Bangkok Post reported that between 2004 and last year, the proportion of intra-Asean trade dropped to 24.1 per cent of the bloc’s total trade from 24.8 per cent in 2004.
For the period, Asean exported US$194.53 billion worth of goods to China, up 4.1 times, but imports surged 7.5 times to US$277 billion. In the same period, the Asean six (Thailand, Indonesia, Singapore, Malaysia, the Philippines and Brunei) shipped US$136.31 billion to China, up 3.3 times, while imports rose 5.9 times to US$181.63 billion.
The study also found that the four countries had higher exports to China, Europe and the United States last year, as opposed to the US, Asean and the EU before the AEC. Last year, the CLMV also opted to import more from China instead of Asean before the AEC period.
Aat said, at the end of last year, the study found that the proportion of China’s shipments to the four countries rose significantly to 4.09 per cent of total exports, compared with only 1.65 per cent in 2004 and 2009.
“The outlook is worrisome, particularly once the Regional Comprehensive Economic Partnership comes into force.”
He said the trade deal meant that China was expected to play a gigantic role in Asean. It is also expected to bring about a flood of cheap goods from China, especially into the four countries.
“Over the next three years, Thailand’s export value estimated to be affected by Chinese exports to the four countries is at 187.79 billion baht, making up 23.83 per cent of total exports to them.”
“Worse still, Thailand needs to keep a close watch on the impact of the trade spat between China and the US and the baht’s value, which is expected to become stronger over the next five years.”
He said Thai goods that were at higher risk of losing market share to China include yarns, textiles, synthetic fibres, shrimp, lobster, wood, wooden tiles, steel and components, corn, leather goods, travel products, tea, coffee, lead sheet, dried fruits, chemical products, concrete, sugar, tapioca, batteries and fireworks.
China’s direct investment in the four nations is expected to surge over the next three years after expanding by 124 per cent last year, mainly in Cambodia, Laos and Vietnam.