China to dominate CLMV as Thailand set to lose out

China to dominate CLMV as Thailand set to lose out

China is expected to dominate the CLMV market, with Thailand estimated to lose as much as 187 billion baht by 2022 as Cambodia, Laos, Myanmar and Vietnam are inundated with Chinese goods.

According to Aat Pisanwanich, director of the Center for International Trade Studies at the University of the Thai Chamber of Commerce, a study of trade and investment impacts on Thailand and Asean from Chinese products in CLMV markets found that China has played an important role in trade and export volume in the last 15 years -- both before and after the Asean Economic Community (AEC) took effect in 2015.

Between 2004 and 2018, the proportion of intra-Asean trade dropped to 24.1% of the bloc's total trade from 24.8% in 2004.

For the period, Asean fetched US$194.53 billion worth of exports to China, up 4.1 times, but imports surged 7.5 times to $277 billion.

Also during the period, the Asean 6 (Thailand, Indonesia, Singapore, Malaysia, the Philippines and Brunei) shipped $136.31 billion to China, up 3.3 times, while imports rose 5.9 times to $181.63 billion.

Meanwhile, shipments from CLMV rose 22.3 times to $58.21 billion, with imports from China up 17.6 times at $95.37 billion.

The study found that the CLMV had higher exports to China, the EU and the US in 2018, as opposed to the US, Asean and the EU before the AEC.

In 2018, the CLMV also opted to import more from China instead of Asean before the AEC period.

"At the end of 2018, the study found that the proportion of China's shipments to the CLMV rose significantly to 4.09% of total exports, compared with only 1.65% in 2004 and 2009," Mr Aat said. "The outlook is worrisome, particularly once the Regional Comprehensive Economic Partnership (RCEP) comes into force."

According to Mr Aat, the trade deal means China is expected to play a gigantic role in Asean. The pact is also expected to bring about a flood of cheap goods from China, especially into the CLMV market.

"Over the next three years, Thailand's export value estimated to be affected by Chinese exports to the CLMV market is estimated at 187.79 billion baht, making up 23.83% of total exports to the CLMV," Mr Aat said. "Worse still, Thailand needs to keep a close watch on the impact of the trade spat between China and the US and the baht's value, which is expected to become stronger over the next five years."

According to Mr Aat, Thai goods at higher risk of losing market share to China include yarns, textiles, synthetic fibres, shrimp, lobster, wood, wooden tiles, steel and components, corn, leather goods, travel products, tea, coffee, lead sheet, dried fruits, chemical products, concrete, sugar, tapioca, batteries and fireworks.

China's direct investment in the CLMV is also expected to surge over the next three years after expanding by 124% in 2018, notably in Cambodia, Laos and Vietnam, he said.


Do you like the content of this article?
COMMENT (4)

US ends Cambodia aid programme over deforestation, arrests

PHNOM PENH: The United States is ending a Cambodian aid programme aimed at protecting one its biggest wildlife sanctuaries, citing worsening deforestation and harassment of those who speak out about destruction of natural resources.

19:09

Court reduces, suspends prison term for road-rage killer

The Supreme Court has reduced to three years and four months the 10-year jail sentence given to a 56-year-old man who shot dead a teenager during a rowdy confrontation over double-parking in Chon Buri four years ago, and suspended the prison term.

18:31

Myanmar goalie chooses to stay in Japan

A goalkeeper for the Myanmar soccer team who raised a three-finger salute in protest at the military coup in the country during a World Cup qualifying match in Japan said Thursday he has chosen not to return home and will apply for refugee status.

16:30