The economic downturn in China caused by the global financial crisis will likely continue into 2009. This has already weakened the Chinese export sector and subsequently their domestic economy. As a result, China's need for imports has fallen in tandem with the slowdown in their industrial sector that showed the lowest growth in 7 years during October 2008. This will be a challenge for Thai exports to China that have already contracted for the third month, from August to October 2008.
Important Thai exports showing contractions in value during this period included plastic pellets, chemical products and electronic integrated circuits, while exports to China that grew – albeit at slowing rates – included computers, equipment and parts; plus rubber and rubber products. This has resulted in Thailand's export growth to China during 10M08 contracting to 20.2 percent, falling from the 27.3 percent growth seen last year. KASIKORN RESEARCH CENTER (KResearch) projects that Thailand's exports to China in 2008 may decelerate to 18 percent, which would be the lowest growth in 6 years. In 2009, Thailand's exports to China will likely continue to wilt steadily, projected to grow at around 1.0-6.0 percent, against Thailand's projected aggregate export growth of around -2.0 to +3.0 percent in 2009; Thailand's 2008 exports will have likely grown 19 percent.
Thailand's 2009 export target may face lower demand overseas, particularly in key markets, as well as in China, which itself is being hurt by the global economic meltdown. Therefore, to shore up Thailand's export growth, it will be necessary to broaden distribution of exports to other markets where Thai goods still have relatively small export values, but do have the opportunity to expand further. They would include the Middle East, Russia, India and South Africa. Moreover, other important factors needed to boost exports would include improving product quality – particularly food – to attain optimal market standards and increase consumer confidence toward Thai goods. We should foster the fame of Thai brand names in the high-end foreign markets instead of attempting to use price competition, and materialize trade liberalization advantages via FTAs to the fullest with Australia, New Zealand, Japan, China and India.
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