According to the latest report from Kasikorn Research Center (KResearch), Thai exports to the People’s Republic of China in the first quarter of 2010 expanded by 70%. The overall export figure in March is reported to be higher than February by 11%. Exports to China hence can greatly support the whole export sector of Thailand to improve despite the risk from the ongoing domestic political upheaval.

In addition, Thai exports to China are expected to have plenty of rooms to grow in 2010 because of the incessantly growing economy of China and the tariff reduction to 0% following the ASEAN-China Free Trade Agreement (FTA). The mentioned factors are believed to help facilitate wider access of Thai exports to the Chinese market.

KResearch forecasted that Thai exports to China this year could expand by at least 25% year-on-year, and could play a vital role in boosting economic confidence when consumption, investment, and tourism of the country are in decline following the prolonged political standoff.

Positive factors boosting Thai exports to China this year are economic stimulus measures to drive consumption and investment in China, and the policies are hoped to help increase demand for Thai goods in the Chinese market continuously.

However, the Chinese government is expected to enforce stricter financial measures to control inflation and bubble in its property market, the main risk factors towards stable economic growth of China. Hence, the Chinese government might increase its policy interest rate in the second quarter and that could reduce consumption and investment in the latter half of 2010.

Based on the analysis, main export products from Thailand to China with potential to grow further continuously include computers and computer parts, para rubber, chemical products, plastic resin, rubber products, and tapioca products.

Meanwhile, the export sector of China also tends to expand constantly in 2010; therefore, the demand for materials from Thailand is still increasing. However, export products from China still have to face with many trade barriers from its trading partners such as the US and the EU.

Although the current export sector, especially exports of Thai products to China, can help shoulder the Thai economy in general, it is also vital to boost confidence in the economy in other sectors from investment to tourism in order to ensure the strength of all economic pillars and the nation accordingly.

Reporter : Sarun Saelee

via Special Report: Bright Future for Thai Exports to China : National News Bureau of Thailand.

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