Analysts are expressing concerns over China's weakening economy, saying the mainland's slowdown and rising US-China tension could impact Thailand on exports, tourism, direct investment and property.
China's economy expanded by 4.5% in the first quarter, beating estimates. However, it has decelerated since, with investment, consumption and export tallies deemed disappointing.
In the first nine months this year, China's GDP grew by about 5.2%, meaning it only has to expand by about 4.4% in the final quarter to meet the government's annual growth target of 5%.
"Growth of 5.2% might seem high, but China's growth used to be 6-8%," said Punn Pattanasiri, an analyst at SCB Economic Intelligence Center (SCB EIC), who added expansion would likely decline further next year.
"Our concern is if the ongoing economic restructuring on the mainland does not produce positive outcomes, economic growth in the medium and long term would be affected," he said.
KGI Asia, the region's leading wealth management and asset management company, said even if the full-year growth target of 5% is achieved, challenges await the Chinese economy next year.
"It's critical to guard against risks and strengthen economic momentum at the same time," KGI Asia said in its recent 2024 Global Market Outlook report.
The company believes Beijing will set an economic growth target for 2024 of 4.5-5%, with the rate reaching 4.9%.
While Chinese investment could grow in manufacturing and infrastructure next year, real estate investment could be a drag, noted KGI Asia.
In addition, China-US interactions have heated up in recent months, though there is no fundamental change to the US's perceived intention of containing China, said the report.
According to KGI, the greater flexibility in monetary policy and fiscal policies introduced by the Chinese government may boost economic growth. However, weak property sales and a potential worsening of China-US relations during a US election year could dampen investment sentiment.
"China-US relations may cause a hiccup for capital markets. It's important for investors to keep an eye on China-US relations and geopolitical changes," the report noted.
Mr Punn from SCB EIC shared a similar view, saying a deterioration in US-China relations could affect exports from the mainland, particularly high-tech products.
"China's role as 'Factory of the World' could decline, with Thailand unable to escape the impact as we are in Beijing's supply chain, notably in the sectors of natural rubber, wood and petrochemical products," he said.
Thailand's relations with the mainland in the areas of tourism, direct investment and property would also experience problems as China's contribution is high in these sectors, said Mr Punn.
"Chinese companies may not be major investors in Bangkok's property sector, but they are quite important players in the provinces that focus on tourism," he said.
KGI Securities (Thailand) said with the number of Chinese tourist arrivals falling short of its estimates, the brokerage reduced its overall arrival projection by 4% this year to 27.5 million and by 9% in 2024 to 32 million.