Thailand should explore new markets for exports and tourism: TDRI

The Chinese economy is recovering slower than expected, raising concerns about its impact on Thai tourism and leading the Tourism Authority of Thailand (TAT) to take a closer look at trends and figures in the second half of the year following the Thailand Development Research Institute (TDRI)’s recommendation to reduce dependency on the Chinese tourism market.

According to Danucha Pichayanan, secretary-general of the National Economic and Social Development Council (NESDC), China's economic expansion in the past two quarters of this year has increased but is still falling short of analysts' expectations. The Chinese economy is currently in a phase of adjustment as it strives to deal with internal issues, especially in the real estate sector. At the same time, the manufacturing sector has just begun to recover from the impacts of zero-Covid, leading the Chinese government not to rush or set ambitious targets for the economy's rapid expansion to ensure internal stability.

As for the impacts on Thailand, apart from the export sector, which will be affected by China's economic slowdown, the number of Chinese tourists is significantly lower than pre-Covid, with only a projected 4 million out of 28 million foreign tourists visiting Thailand this year.

The NESDC forecasts that China's economy will expand by 4.9% in 2023, an increase from the 3% growth last year. However, it still faces risks from the industrial production sector and exports, which have been reduced amidst the impact of the USA’s trade policy designed to boost US competitiveness. Investment meanwhile is facing constraints due to liquidity problems and the burden of debt in the real estate sector. In addition, unemployment rates in the young age group remain high.

Narit Pisalyabutr, a senior academic at the Thailand Development Research Institute (TDRI), stated that the Chinese economy is currently in a phase of structural adjustment to address its internal vulnerabilities.

He suggests that Thailand explore new export markets, focusing its efforts on regions like Central Asia, accelerating trade relations with Saudi Arabi, and pursuing Free Trade Agreements (FTA), such as the Thailand-EU FTA and the Indonesia-Pacific Economic Framework (IPEF), which accounts for up to 40% of the world GDP. Attention should also be paid to encouraging tourism from other countries in the region, including Malaysia.