Thai Exports to China: Surprise Growth in 1H11, 2H11 Performance Unclear (Business Brief No.3147)

The value of bilateral trade between Thailand and China in June 2011 hit a record high of USD5,017.8 million, rising over the previous record of USD5,011.1 million achieved in March. Thai exports to China continued to accelerate in June, growing 26.6 percent YoY, versus the 21.2 percent YoY growth in May, thanks to continuing growth in our farm produce shipments, because China needed to offset shortfalls in agricultural produce after natural disasters had severely damaged farmland in many provinces there. This was contrary to a slowdown seen in China’s imports overall from the rest of the world in June. As a result, Thai agro-processing exports to China in June 2011 surged more than double over that of June 2010, while farm produce exports grew at a staggering 40.2 percent YoY. Given this, Thailand’s outward trade to China performed surprising well in 1H11, growing 23.8 percent YoY. However, due to signs that the Chinese economy may slow in 2H11, KResearch has assessed that Thai exports to China in 2011 may decline from the 33.2 percent growth achieved in 2010, yet should be able to register double-digit growth of 10-15 percent, in any case.