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9 Aug 2013


Thai Exports to China May See Light in 2H13 (Current Issue No. 2389 Full Ed.)

This year may see our exports to China with weaker performances than before. Since early in 2013, Thai exports to China began to slow and then fell into contraction in the past three months, ending 1H13 with a (-)3.6-percent drop YoY, which was chiefly the result of a severe downturn in 2Q13. Mounting pressure due to ongoing global decline and internal economic reforms facing Chinese market resulted in the Chinese GDP growing only 7.5 percent YoY in 2Q13, versus 7.7 percent in the preceding quarter. China 1H13 growth was registered at 7.6 percent YoY.
Thai exports to China in June 2013 recorded an over-month decline with the total value of USD1.9 billion, slumping (-)16.7 percent YoY, considered the biggest fall of this year. Meanwhile, June imports from China dropped (-)5.1 percent YoY, totaling USD2.96 billion. While this lethargic Chinese trend hit most of our export categories, certain products' poor performances were actually caused by specific factors. Slowdown in some agro-products was a consequence of falling prices this year, particularly rubber, while computers and parts suffered from the production base relocation of some operators in the supply chain from China or Thailand to other countries. However, there was growth in wood and products, cassava products, rubber products, refined petroleum products, fruit and printed circuit boards.
Chinese economy will remain an issue of interest amid its economic reforms which instigate both direct and indirect impacts, and restrict manufacturing and domestic consumption. This has posed a challenge to business sector there to adapt well with the monumental reforms. As Chinese authorities signaled an attempt to meet their 7.5 percent YoY growth target and stimulus packages have been launched amid stronger domestic consumption, it is hoped that these positive factors will help shore up the Chinese economy in the near future. With the government now aiming to put more emphasis on consumption as the nation's main economic driver, Thai exports to China should be able to avoid critical slowdown, provided that such improvement continues.
In these circumstances, KResearch projects that our exports over the remainder of 2013 will rely primarily on the Chinese economic trend. If that outlook improves, our exports to China should grow close to 0.7 percent, with a total value of USD27 billion. Imports from China may gain 3.8 percent YoY, totaling around USD38.3 billion. Slowing exports to China could result in Thailand sustaining a larger trade deficit with them at perhaps USD11.3 billion. KResearch
2013 Thai-Chinese Trade Estimates by KResearch
Estimate Range
Value (USD Million)
Value (USD Million)
Exports to China
-4.3 to 2.3
25,700 – 27,500
Imports from China
2.3 – 8.1
37,800 – 40,000
Trade balance
(-)12,100 – 12,500

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