January 16, 2023
BANGKOK – China, Thailand’s second-largest export market after the US, lifted border restrictions on January 8, spurring hopes of economic and trade recovery.
Trade Policy and Strategy Office (TPSO) director Poonpong Naiyanapakorn expects the country’s reopening to boost Thailand’s export sector, led by shipments of fruit, food and beverages, and fashion items.
Thai exports to China fell 6.5% in the first 11 months of last year, according to the Commerce Ministry.
However, Poonpong expressed concern over the possibility of another lockdown in China, where infections are surging after the zero-Covid policy was scrapped following mass protests last month.
Thai exports of durians, cassava, rubberwoods and chemicals would be affected if Beijing reimposes lockdown measures, he said on Monday.
On the positive side, Thailand’s medical exports could benefit if China’s borders remain open, he added.
Poonpong also cautioned that Chinese consumer demand could be dampened by rising inflation and strict monetary policies.
Nevertheless, he expects reduced tariffs under the Regional Comprehensive Economic Partnership to help boost Chinese imports from Thailand.
He advised Thai exporters to reduce risk by expanding their markets to other countries, diversify by creating a variety of new products, and make sure they had solid financial plans.
The Thai Chamber of Commerce (TCC) meanwhile cautions that slow growth in China would contribute to Thai exports shrinking in the first two quarters this year before rebounding as global demand recovers. The TCC said current strengthening of the baht could hit the competitiveness of Thais exports.