Influx Of China Goods Spook Thailand Economy

The influx of cheap and substandard goods from China via both online and physical platforms has become a critical issue in Thailand, with various parties expressing concerns about its impact on Thai businesses and consumer welfare.

Source: Bangkok Post

The issue resurfaced after Temu, a major Chinese platform that sells cheap products directly from Chinese manufacturers without intermediaries, entered the Thai market, sparking worries about Thai businesses collapse and leading to calls for tax measures to address the situation.

There are also concerns about the increasing number of Chinese brick-and-mortar stores opening in major cities across Thailand, raising alarm about price dumping and product quality. Responding to these concerns, Deputy Prime Minister and Commerce Minister Phumtham Wechayachai insisted the Thai government would never respond to these problems by imposing trade barriers or tariffs for the sake Thai-Chinese relations. 

Additionally, China is a major export destination for several Thai agricultural products. If Thailand imposes a trade barrier on Chinese products, these Thai products imported to China might end up facing retaliatory measures.

Sahassawat Kumkong, a People’s Party MP for Chon Buri, slammed Mr Phumtham’s remarks, saying the Pheu Thai Party-led government is simply refusing to act against the influx of cheap Chinese-made products. Thailand has experienced a trade deficit with China for 11 consecutive years now, with the last two years seeing a deficit reaching as high as US$36 billion (THB1.27 trillion), he said.

Since other ASEAN nations — including Malaysia, Indonesia and Vietnam — are also facing a similar situation with Chinese cheap products, Thailand would be better off seeking a collective action with these nations to curb the problem, Sahassawat added.

“First of all, the Thai government has to accept the truth that the influx of Chinese capital [into Thailand and the other countries] is a real problem. Prospective trade opportunities [eyed by the Thai government] will never make up for Thailand’s [escalating] trade deficit with China” he stressed.

Up until now the Thai government has yet to put in place any serious measures to deal with the problem, not even a letter to the Chinese company accused of dumping on Thailand’s online market, he said.

Sittiphol Viboonthanakul, a list-MP of People’s Party in his capacity as Chairman of the House committee on business development, pointed to the urgent need for the government to take proper action against the influx of cheap Chinese products and other related problems.

Citing information told at the recent meeting of the House committee, he said many Thai business operators in 25 out of 46 industrial sectors in the country have been severely affected by these problems. The impact was reflected in the about 30% drop in production in these 25 industrial sectors, he said, adding the Federation of Thai Industries had observed that 111 factories have closed down in the past few months, he said.

Temu, meanwhile enjoys a twelve-fold growth each month, said Sittiphol. Responding to concerns raised over the Temu disruption, Prime Minister Srettha Thavisin has instructed the government agencies concerned to find a way to ensure all imported products sold online and offline in Thailand are regulated under Thai law, for the sake of both consumer protection and fair competition.

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