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24 Dec 2008

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Exports to China, November 2008: Down 36%, Lowest in 8 Years (Business Brief No.2386)

คะแนนเฉลี่ย

Thailand's exports to in November 2008 suffered an unprecedented decline, shrinking 36 percent YoY. Therefore, our aggregate export growth to over 11M08 dropped sharply by 14.5 percent YoY, in contrast to the growth of 26.2 percent during the same month of last year. This is the first time that the Thai exports to have fallen below 20 percent – the lowest level in eight years. Products that have experienced continued contractions include raw materials, intermediate products and capital goods for manufacturing, e.g., computers, accessories and parts thereof, rubber, plastic pellets, chemical products, integrated circuits, rubber products, refined oil and tapioca products.

Our exports to experienced severe shrinkage due to the Chinese economic deceleration, as evidenced by decreases in 's major economic indicators in November 2008, including exports, domestic consumption and investment. is expected to encounter an economic downturn until at least mid-2009 in line with the global downturn before emerging from the doldrums in 3Q09 onwards thanks to the Chinese government's economic stimuli.

If effective monetary and fiscal policies are implemented on a proactive and continuous basis, the Chinese economy may see some improvement, which would thus help those industries dependent mainly on domestic demand, especially their real estate and automotive industries. Meanwhile, 's export-oriented industries, e.g., electronics and electrical appliances, are expected to receive a boost if the global economy manages some recovery assisted by the economic stimulus programs implemented worldwide, especially in 's major markets, i.e., the , European Union and . Therefore, Thai export shipments to , particularly, raw materials and intermediate products that are used in Chinese supply chains, will be among the main beneficiaries. It could be said that any improvement in the Chinese and global economies in 2H09 may help revive Thai exports to during that period whereas they will remain challenged by the Chinese economic slowdown during 1H09.

KASIKORN RESEARCH CENTER (KResearch) holds the view that market diversification, especially to economies largely insulated from the global crisis may help somewhat in cushioning the impact on our exports. Among the more interesting markets seen for exporters are , Eastern Europe and the Middle East . Thai exports showed growth to those destinations in November 2008. Notably, our export shipments to recorded overall growth of 35.2 percent. With the tariff benefits under Thailand-India FTA pact that have helped bolster our competitiveness in the Indian market, vast potential still lies there for our exports which have so far remained quite moderate.

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