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28 Jan 2011


China Continuing as our Number One Export Market in 2011, Slower Growth of 10-15% Expected (Business Brief No.3032)

Based on signs seen in the overheating Chinese economy, with 4Q10 GDP growth of 9.8 percent (annual rate), beating the 9.6-percent growth of 3Q10, their overall economy in 2010 grew 10.3 percent, rising over their 2009 growth of 9.2 percent. Hence, it is possible that the Chinese authorities will continue to implement further tightening monetary and exchange rate policies (in harmony with one another) in 2011.
They may increase interest rates and move the Yuan gradually higher as well, thus being of some concern to investors because that would pressure stock and commodity markets considerably. Investors fear that such policies could decelerate economic activities in China more than originally expected, thus resulting in slower import demand there. Nevertheless, Chinese monetary policy will continue at a gradual pace and the economic growth there in 2011 will likely remain at 8 percent, at least.

As a result, it is expected that Thai exports to China in 2011 will likely record slower growth of 10-15 percent, versus the 33.2-percent growth seen in 2010. China has become our top export destination, and in 2011, it is expected that trade between Thailand and southern China will likely become more significant. In previous years, Thailand and southern China border trade showed a record-breaking trade surplus of as high as THB7.6176 million.