Connect with us

Opinion

The China Syndrome

It would be easy to blame China, but the coronavirus outbreak is hitting an economy already weakened by air pollution, sinking productivity, the worst drought in 40 years, and the delay in the budget bill.

Olivier Languepin

Published

on

Originally  “The China Syndrome” refers to a nuclear meltdown scenario in the U.S., so named for the fanciful idea that there would be nothing to stop the meltdown tunneling its way to the other side of the world. 

But today this metaphoric apocalypse seems like a distant nightmare of the 70’s, unlike what is happening in China.

First of all, back in the 70’s, 300 Chinese, or much more, could have died in China without anyone noticing.

But today it’s a different story : not only is the information is going viral within a few seconds, but the Chinese economy is also a global powerhouse that just can’t fail without chilling consequences in every other country.

Thailand’s economy has lagged its Southeast Asian neighbors for some time, and the coronavirus outbreak could tip Southeast Asia’s second-largest economy into recession by hitting the tourism and export sector.

Thailand could be the first country to be hard hit by the China syndrome, not because of the coronavirus outbreak in the country which has been so far limited, but because of its dire economic consequences.

In the first quarter of 2020, with the coronavirus outbreak continuing, China’s economy is expected to expand by less than 6% and Thai tourism and exports could also contract because China is a major market for these two real sectors of Thailand’s economy.

Thailand’s over reliance on China comes at a price

Experts expect Chinese arrivals to fall by about 50% over the next few months due to the tour group ban enforced since January 27th. About 800,000 Chinese travel to Thailand monthly on average spending about 50,000 baht ($1,630) on average.

Over-reliance on external demands as a source of growth makes it difficult for the Thai economy to adjust to shocks

BANDID NIJATHAWORN – VISITING PROFESSOR, HITOTSUBASHI UNIVERSITY, TOKYO,
FORMER DEPUTY GOVERNOR, BANK OF THAILAND (SPEAKING AT A FOREIGN PRESS MEETING)

Chinese visiting Thailand via group tours totalled 3.1 million in 2019, making up 28% of total inbound Chinese tourists in Thailand, according to the Association of Thai Travel Agents.

In total, 11 million Chinese tourists visited the Land of Smiles last year, bringing in spending worth 544 billion baht.

Thailand is estimated to lose 80-100 billion baht in income, mainly from tourism, because of the virus outbreak, said Thanavath Phonvichai, president of the University of the Thai Chamber of Commerce.

The loss could shave 0.5-0.7% off Thailand’s GDP growth this year, he said.

Blame China? Not so fast

But that’s not all : Bangkok has been shrouded in toxic smog for several months, and budget troubles have delayed much-needed fiscal stimulus. Blame China, but the coronavirus outbreak is hitting an economy already weakened by several other factors.

“The recent growth slowdown has highlighted Thailand’s long-run structural constraints, with slowing investments and low productivity growth. In the last decade, Thailand’s productivity growth has fallen to 1.3 percent over 2010-2016 from 3.6 percent over 1999-2007.” said the World Bank in its latest country report.

The coronavirus may also be an opportunity for Thailand to question its over reliance on external factors like tourism and exports, and start lifting constraints that prevent new firms, especially foreign firms, and skilled professionals from entering the domestic market.

Bangkok Correspondent for Siam News Network. Editor at Thailand Business News

Advertisement
Comments

Asean

We’ve entered the Asian Century and there is no turning back

In the nineteenth century, the world was Europeanized. In the twentieth century, it was Americanized. Now, it is being Asianized – and much faster than you may think.

Avatar

Published

on

Asia’s rise has been swift. Home to more than half of the world’s population, the region has climbed from low- to middle-income status within a single generation. By 2040, it is likely to generate more than 50% of world GDP, and could account for nearly 40% of global consumption.

(more…)

Continue Reading

Opinion

Why Asia needs to rethink the ‘sharing economy’

What is popularly called the ‘sharing economy’ has done a lot of good and reached tremendous heights in Asia. GoJek and Grab added US$6.6 billion to Indonesian GDP in 2018.

Avatar

Published

on

Once celebrated as exemplars of the ‘sharing economy’, China’s bike-sharing companies rapidly filled Chinese cities with bikes.

(more…)

Continue Reading

Opinion

Sufficiency Economy, King Bhumibol Adulyadej’s most enduring legacy

In a sufficient economy, generation of material wealth should rely more on environmentally healthy, self-sufficient communities in which basic human needs are met through Iocal natural production methods.

Olivier Languepin

Published

on

Decades before Sustainable Development became the buzzword of UN agencies, Thailand had already experienced it with the Sufficiency Economics theory, perhaps the most everlasting legacy of King Bhumibol Adulyadej.

(more…)

Continue Reading

Must Read

Upcoming Events

Mar 11

Food science conferences

March 11 @ 8:00 am - March 12 @ 5:00 pm BMT
Mar 11

Food science conferences

March 11 @ 9:00 am - March 12 @ 5:00 pm BMT
Mar 22

41st World Dental Science and Oral Health Congress

March 22 @ 9:30 am - March 23 @ 5:00 pm BMT
Mar 26

8th Anti-Corruption Compliance Asia Pacific Summit 2020

March 26 @ 9:00 am - March 27 @ 5:30 pm SMT

Press Release

Subscribe via Email

Enter your email address to subscribe and receive notifications of new posts by email.

Join 12,191 other subscribers

Trending