The new government is being urged to urgently address the perception that Chinese products and investments pose a threat to Thais before the issue escalates and negatively affects Thailand's exports and tourism.
Sompop Manarungsan, president of the Panyapiwat Institute of Management and a specialist on the Chinese and US economies, said Thailand and China should cooperate to create a win-win trade model.
"Negative sentiment has been growing to the point where even a Chinese fried chicken brand that recently set up franchises in Thailand is seen as a threat. There are numerous Japanese and Korean restaurants in Thailand, while Chinese fried chicken shops are relatively few," he said.
"If perceptions and attitudes towards Chinese investment and trade are not resolved quickly, it could lead to a trade confrontation with China, which would negatively impact Thailand's export and tourism sectors."
Mr Sompop acknowledged Chinese investment and the influx of Chinese products into Thailand do have some negative impacts on local businesses, but he said there is another side to the coin.
Chinese trade and investment have benefits and drawbacks, as most factories in Thailand use low-cost components or raw materials from China, said Mr Sompop.
He said the Chinese and Thai governments need to consult and understand each other. It is crucial to address this issue early by finding a win-win model for both countries, said Mr Sompop.
For instance, if China becomes a wholesaler in Thailand, it should avoid entering the retail market to compete with local businesses, he said.
Thailand has an annual trade deficit with China of around US$10 billion, mostly attributed to the import of raw materials and intermediate goods, while imports of finished products from China are relatively low.
Regarding the automotive industry and competition from Chinese electric vehicle (EV) companies in Thailand, Mr Sompop said EVs and internal combustion engine (ICE)-powered vehicles are not directly competing in the same market. The market share of EVs is still significantly smaller than that of ICE-powered cars.
The Thai government should study the subsidy structure of other countries to evaluate how the subsidies can lift the EV market while having the least impact on ICE-powered cars, he said.
While the Thai government provides a subsidy of 100,000 baht per EV, the Chinese government is gradually increasing its EV subsidy, rising from 10,000 yuan to 20,000 yuan (from 48,107 baht to 96,214 baht) per vehicle.
The market is in a transitional period, as developed countries have imposed trade barriers on China, leading to a decrease in Chinese exports to these nations, including the US, South Korea, Japan and Europe, by more than 10% annually.
China has not yet reduced its production capacity, causing a surplus of Chinese goods to flow into developing countries, said Mr Sompop.
In the future, China may need to reduce its capacity or relocate production bases, he said.
During this transition, the process must be handled carefully through transformation management, said Mr Sompop.