Thailand's trade deficit with China reaches record high
For the fifth consecutive year, Thailand recorded a trade deficit with China in 2023, the highest yet at US$36 billion, up from $29 billion in 2022.
The deficit is the result of Thailand importing more goods from China than it exports. In 2023, Thailand's imports from China totalled $105 billion, while its exports were just $69 billion.
According to Chaichan Charoensuk, chairman of the Shippers' Council of Thailand and the Exporters Council, China is Thailand's largest trading partner, accounting for 22% of Thailand's total trade. Thailand imports a wide range of goods from China, including electronics, machinery, and chemicals. Thailand exports mostly agricultural products, such as rubber, rice, and seafood, to China.
The main drivers of the trade deficit were increased imports of intermediate goods, such as electronics and machinery, used to produce finished goods for export, but not counted as exports themselves.
The trade deficit with China is a major concern for the Thai government and it is working to reduce the deficit by promoting Thai exports to China by improving the quality of Thai products to make it easier for Thai businesses to export to China; attracting Chinese investment to Thailand by offering incentives to Chinese businesses; and negotiating free trade agreements with other countries that are not major exporters to China.
The trade deficit is also a sign of the challenges facing Thai manufacturers. As China's economy has grown, it has become a major producer of manufactured goods. This has made it more difficult for Thai businesses to compete with Chinese producers, leading to increased imports of Chinese goods.
