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14 Aug 2007

International Economy

Contaminated Goods: A Lesson Learned from China (Business Brief No.2028)

Since early this year, several incidents related to the safety of Chinese products have caused widespread panic in countries importing made-in-China goods. Amid a crisis of confidence toward Chinese products, Thailand should take advantage of this situation by highlighting the quality and safety of Thai exports. From now on, we should avoid engaging in any form of price competition with China. Recently, complaints were lodged that some Thai products, i.e., certain types of farm produce, medicines and pharmaceutical products posed health risks to consumers. This may prove to be a hindrance toward improving the image of Thai products in global markets. KASIKORN RESEARCH CENTER (KResearch) takes the view that the government should now focus on promoting product safety standards among both producers and consumers. To this end, we would like to recommend actions that should be taken by the government, as summarized in the following:
Designate product standard upgrades as part of the national agenda to arouse awareness on the danger of substandard goods, as well as instilling product safety awareness with producers, traders and consumers alike.
Provide information related to production and technology to ensure safety standards. Source of funding for operating capital should also be offered to producers to facilitate upgrading their production process.
Set up a central body that is represented by experts from several public agencies and be authorized to undertake quality control initiatives, facilitate exporters in contacting with government agencies quicker, and solve problems related to redundancies.
The government should pay more attention toward inspections and punishment of offenders who manufacture/import or otherwise distribute unsafe products to consumers, particularly consumer goods that people consume in their everyday lives, such as agricultural, domestic livestock, fishery, pharmaceutical and cosmetic products. In addition, the authorities should earnestly institute legal action against those who imitate Thai products in order to protect our product image.

Although the crisis of confidence toward Chinese products will not affect Thailand directly, it is a lesson for Thai entrepreneurs. Previously, the problem of Thai products was an issue that many countries, such as the USA, Europe, China and Japan, etc., typically raised as an issue in order to refuse the importation of Thai products. Hence, improvements in Thai product quality will not only create the potential opportunities for Thailand in boosted competitiveness over rivals such as China, Malaysia and Vietnam, but will also be an opportunity for Thai consumer goods to grow continuously in the future.

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International Economy