The growth of Thai exports to China in April 2011 decelerated from 30.6-percent growth of March 2011 to 21.0 percent, YoY due to a contraction in refined oil and cassava product exports, as well as lower exports of farm produce from lower stockpiling of commodity by Chinese importers (after a surge in early 2011). In addition, Chinese authorities have decelerated their overheating economy via monetary tightening measures, stricter investment controls and limiting power supply due to lower power generation capacity amid falling river levels that has affected manufacturing output there. Therefore, the Chinese economy may continue to decelerate during May - June. KResearch views that Thai exports to China in 2Q11 may expand at not exceeding 20 percent YoY, decreasing from the 24.9-percent growth in 1Q11.
Meanwhile, the growth of Thai imports from China in April 2011 dropped to 23.2 percent, against 49.3-percent growth of the previous month due to deceleration of capital goods, raw materials and instant products that account for 76.4 percent of all imports in this month.
Due to the fact that the growth imports were higher than exports in April 2011, Thailand still experiences a trade deficit with China, with a record-breaking deficit of USD528.2 million, surpassing the previous highest deficit in February 2011 of USD521.2 million.
Currently, Chinese consumers are placing greater emphasis on product quality. As a result, competition toward packaging and product quality in the Chinese market will likely intensify. Thai manufacturers and exporters should continue to monitor market movements, conduct market research and develop products in order to maintain and improve their competitiveness in the Chinese market that plays larger role in our international trade, with more rivals entering into this market.
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