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China's impact on the Thai economy

Goods being loaded on Chinese ships at Chiangsaen's port to travel upriver to Yunnan, China.

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An increased flow of people & goods between Thailand & China means change & with change there are always costs & benefits, reactions to changes & more change.

INTERNATIONAL ECONOMICS & BUSINESS

China's impact on the Thai economy

15/01/2017
Paritta Wangkiat, Spectrum

The influence of China along the Mekong River is increasing.

This includes influence over the economies of the so-called Greater Mekong Subregion (GMS) which includes the six countries located along the Mekong River: Cambodia, Laos, Myanmar, Thailand, Vietnam, and Yunnan Province of China (See here).

As with anything new, the new influence brings with it benefits and costs.

A Thai small business woman purchases cheap clothes from an online Chinese dealer, then resells them in her local market for a higher price making a profit. These imports, however, may displace some Thai companies producing clothes for the Thai market.

More and more Chinese are coming to stay in Thailand as students and long-term tourists, some of whom stay on to start businesses, building Thai-China connections and business relations and helping the Thai economy grow (see here).

A hotel manager in Phuket wants to learn Chinese to better serve his customers, but he also feels put off by their sometimes noisy and unruly behaviour.

In a town in Chiang Rai province, locals found a Chinese-operated contract banana farm deploying a heavy amount of chemicals in their produce that can also work itself into the local water supply (see here).

A durian farmer in Rayong enjoys a better income from selling his fruit to Chinese merchants, who will pay higher prices than locals -- about 90 to 100 baht per kilogram in comparison to the regular Thai price of 70 baht. However, the new hiked-up prices have upset his long-time local customers.

On the other hand, the income of Thai compost producers is declining as several key ingredients, including durian husk and other fruit peels, are being bought off and sent on transport trucks bound to China via Laos' R3A highway.

The Fourth Friendship Bridge between Laos and Thailand located in Chiang Khong.


OVERLAND CHINESE TOURISM BOOM

The R3A highway, running from Thailand through Laos to China, was opened in 2008 after the Greater Mekong Subregion Economic Corridor Cooperation programme was established.

The fourth Thai-Lao Friendship Bridge was opened in 2013, connecting China's Kunming province to Laos and the Thai district of Chiang Khong in Chiang Rai province (see article on Chiang Khong here).

A motor home and a van from China parked on a road in Phuket. Photo from Mint Idea-Tv Facebook page. Inset: Person living in motor home on public sidewalk wearing underpants or bathing suit, wreckage of Chinese after fatal collision with Thai motorcycles.

During Chinese New Year, Thai locals began to see a new influx of Chinese caravans and campers. The impact of this influx of new Chinese visitors included some high profile road accidents and people camping on public streets (see here). The government eventually took steps to reduce the number of Chinese vehicles entering Thailand (see here). This in turn caused a backlash when local businessmen in northern Thailand claimed the policy had led to a huge fall in Chinese tourists and had hurt them economically.

Meanwhile, in Laos entire towns are being redesigned to make way for China-bound  railroads. The suburbs of Luang Prabang and Vientiane are slowly beginning to resemble parts of Yunnan province in China.

New Chinatowns in Bangkok surprise the passerby with a sea of signs in Chinese and many Chinese restaurants, some serving local cuisine from Yunnan.


CHINA'S REGIONAL ECONOMIC DOMINANCE

China's 2015 level of foreign direct investment (FDI) was ranked as second only to the US in the world. In Asean, Chinese investment grew by 200% between 2008 and 2014.

The Commerce Ministry reported that China had the highest share, or 10.8%, in Thailand's export market, only trailing the US, between January and November of last year.

China was ranked as the first for the highest share, or 21.7%, of the Thai import market.  China also has the highest share of trade value of 16%, equivalent to 2 trillion baht.

But since 2015 China has experienced a slowdown in its economic growth. The effects were felt in many countries, including Thailand,  which depend on exporting goods such as electronic parts and raw materials serving China.

ON THE RISE: Water levels in the Mekong River in Tha Bo district of Nong Khai province have risen sharply following China's dam discharge. (Photo by Pattarapong Chatpattarasill)

CHINESE-MEKONG COUNTRY COOPERATION-INTERCONNECTIVITY INITIATIVE

On Nov 14, Chinese Premier Li Keqiang proposed the sub-regional Lancang-Mekong Cooperation (LMC), an initiative to improve interconnectivity and cooperation among its six member countries -- China, Cambodia, Laos, Myanmar, Thailand and Vietnam.

At the meeting, Mr Li vowed to provide US$1.54 billion in loans and up to $10 billion in credit lines to fund infrastructure and improve transport networks in the Mekong region, including railways, waterway, ports and air transport infrastructure.

The meeting was later followed up with an LMC ministerial meeting in Siem Reap, Cambodia, on Dec 23.

Four days later, the Thai cabinet approved a plan to develop infrastructure to improve water transport in the Mekong River between 2015 to 2065 alongside other LMC countries.

Delivering the goods: Garlic from China is taken to markets from the Chiang Saen pier in Chiang Rai. Last year, 99% of goods imported through Chiang Saen came from China, say customs records. photo: Sarot Meksophawannakul

CHIANG SAEN'S PORT & CHINA-ASEAN FTA

In 2011, a new Chiang Saen commercial port began its operation. Border trade increased thanks to the new infrastructure, culminating in the Asean-China Free Trade Agreement (FTA), effective as of 2010.

Last year, over 3,500 commercial ships arrived at the Chiang Saen commercial port. The vast majority of these ships were Chinese and Lao vessels hired by Chinese businessmen. Only one was Thai, according to local people's observations. Chiang Saen Customs reported goods imported from China, valued at 704 million baht -- up from the 483 million baht recorded in 2012.

The top imported goods were garlic, sunflower and pumpkin seeds, and pomegranate. Garlic from China is being used more in local cooking as a result.

At the same time, the top export products at Chiang Saen Customs were frozen chicken parts and pig.

Exports to China at the customs service earned 2.8 billion baht in value, accounting for around 19% of all exports. Another 18% of exports, equivalent to 2.8 billion baht, went to Myanmar, while 63%, or 9.5 billion baht, went to Laos. There is no available figure for goods directly shipped to China from Laos.

The Mekong River's rocks will soon be blasted away to allow commercial ships with a 500-tonne carrying capacity to pass through a channel from Yunnan in China, Luang Prabang in Laos to Chiang Rai in Thailand all year round.

Currently, only ships with 100-300 tonnes in carrying capacity can pass through Mekong River due to natural rapids that obstruct the water transport route during the dry season.

MIGHTY: The Mekong River winds its way downstream through the foothills of the remote mountains of southwest China's Yunnan province. photo: afp

ENVIRONMENTAL CONCERNS

Many Chinese development projects, ranging from copper mines in Myanmar to paper pulp mills and thermal power plants in Vietnam to heavy-chemical banana farms in Thailand, have raised environmental concerns.

Some perceive the power of Chinese investors in their country as being a "threat to sovereignty".

The recently suspended Myitsone Dam project in Myanmar, funded by the Chinese, is a case study in political caution.

The project became a controversial subject because it was located in Kachin state in the far north of Burma near the Chinese border with Yunnan. This is a heavily militarised area, and electricity would have been directed to Yunnan.

China was criticised for ignoring local concerns.

Upper Mekong hydropower dams were set up in China's territory 20 years ago.

The downstream water levels and movements are no longer shaped by natural seasons.

With this came the disappearance of many fish species.

Vegetables farms at the river bank became vulnerable to inundation overnight -- in any given season.

Fishermen were forced to change their jobs to escape poverty.

NET GAIN: A mother and her son catch fish in the Mekong River in Chiang Rai's Chiang Saen district. photo: Apichart Weerawong

View of the town of Huai Sai on the Lao side of the Mekong River, taken from the Chiang Khong side of the river.

Outside of Chiang Khong, the Mekong River meanders its way from China and Chiang Saen in the north South to Luang Prabang in Laos providing many scenic views along the way (Source: Wikipedia)

One of the slow boats used to travel south along the Mekong to Luang Prabang in Laos.



http://www.bangkokpost.com/news/special-reports/1180397/against-the-flow

http://www.bangkokpost.com/learning/work/898308/driving-in-thailand-foreign-tourists-face-strict-controls

http://www.bangkokpost.com/learning/learning-news/880360/chinese-drivers-causing-alarm

Vocabulary:

according to (prep): as stated or reported by somebody/something - ตามคำบอกเล่า, ตามรายงาน

approve : to give official permission - อนุมัต

backlash : a strong negative and often angry reaction to something that has happened - การสะท้อนกลับอย่างรุนแรง

behaviour : the way that someone acts or behaves - พฤติกรรม, การกระทำตัว

benefit : an advantage you get from a situation; a helpful or good effect, or something intended to help - ผลประโยชน์, ข้อได้เปรียบ, ผลดี

boom : a sudden increase in trade and economic activity; a period of wealth and success - ความเจริญรุ่งเรืองทางเศรษฐกิจ

border : the official line separating two areas, regions or countries - เขตแดน อาณาเขต

bound : going to - มุ่งหน้า

cabinet : the group of government ministers who make and approve government policy - คณะรัฐมนตรี

capacity : the total amount or number that can be contained - ปริมาณสูงสุดที่จะรับได้

caravan : a group of people with vehicles or animals who travel together - กลุ่มคนเดินทาง

case study : when a researcher takes one case and studies the case in detail -

caution : careful thought and lack of hurry in order to try to avoid risks or danger - ความระมัดระวัง

channel : a passage that water can flow along, especially in the ground, on the bottom of a river, etc - ร่องน้ำ, ช่องทาง

claim (noun): saying that something is true although it has not been proved and other people may not believe it - ข้ออ้าง ข้อกล่าวหา

commerce : trade, especially between countries; the buying and selling of goods and services - การค้าขายสินค้า, ธุรกิจการค้า (commerce minister รัฐมนตรีว่าการกระทรวงพาณิชย์)

Commerce Ministry : the Thai government ministry focusing on internal and external tarde, ensuring free and fair trade and protecting consumers - กระทรวงพาณิชย์

commercial : for business purposes - เกี่ยวกับการค้า

comparison : the process of comparing two or more people or things - การเปรียบเทียบ

compost (noun): a mixture of decayed plants, food, etc. that can be added to soil to help plants - ปุ๋ยหมัก

concern : a worry - ความกังวล

connect : to join together two or more things - เชื่อมต่อ

connection : a relationship between people or groups - ความสัมพันธ์

contract : an official written agreement - สัญญา

controversial : causing disagreement or disapproval - ความไม่ลงรอยกัน

cooperation : a situation in which people or organisations work together to achieve a result that will benefit all of them - การร่วมมือกัน

copper : a soft reddish-brown metal used for making electric wires, pipes and coins - ทองแดง

corridor (noun): a long narrow area along which something travels - เส้นทาง, ระเบียง,เฉลียง

cost (noun): the effort, loss or damage that is involved in order to do or achieve something - ความเสียหาย

credit line (noun): money that can be borrowed if needed; already approved - เพดานสินเชื่อ; วงเงินสินเชื่อ

criticised : receiving words of disapproval over something that you have supposedly done wrong - ถูกวิจารณ์, โดนว่า

culminating : happening as the final result of a process or situation - มาสิ้นสุดลงที่

currently : at this time; now - ในปัจจุบัน

customs (noun): the checking and collecting of taxes on goods leaving or entering the country, carried out by the customs department - งานที่เกี่ยวข้องกับภาษีศุลกากร

decline : becoming less - การลดลง

depend on : to rely on - พึ่งพา  

deploy : to put in place ready for use - นำมาใช้

develop : to think of or produce a new idea, product, etc. and make it successful; to build new houses, factories, etc. on an area of land, especially land that was not being used effectively before - พัฒนา

disappearance : moving something or someone somewhere where they can no longer be seen - การหายไป, การสาบสูญ, การสูญหาย

displace : to move something from its usual position - ทำให้เคลื่อนออก

downstream : in the direction that a river or stream is flowing - ตามกระแสน้ำ

dry season (noun): the dry part of the year when there is no rain - ฤดูแล้ง

due to : because of - เนื่องจาก

effective : officially begun to be used ; to take effect - มีผล

environmental (adj.): related to the natural world including plants and animals, land, water, air, especially as it is affected by human activities - สิ่งแวดล้อม

environmental : involving the place in which people live and work, including all the physical conditions that affect them - เกี่ยวกับสภาพแวดล้อม, สิ่งแวดล้อม

equivalent : the same as; equal to - เท่าเทียมกันกับ

escape (noun): avoiding something bad; preventing something from happening; staying away from a place - การหลีกเลี่ยง

eventually : at the end of a period of time or at the end of a process - ในที่สุด

experience (verb): to have something happen to you or to live through some event - ประสบ

export (noun): something sold and transported to another country - สินค้าออก

foreign direct investment (noun): FDI, money that people or companies of one country invest in another country by buying property, building factories, buying businesses, etc -

Free Trade Agreement (FTA) : an agreement between countries to create "free trade" for some or all goods - เขตการค้าเสรี

frozen (adj): (of food) kept at a very low temperature (below freezing) in order to preserve it - ซึ่งเป็นน้ำแข็ง

fund : money provided for something - เงินทุน กองทุน

fund : to provide money for something - ให้เงินทุน

goods : things that are produced to be sold; possessions that can be moved - สินค้า, สิ่งของ

Greater Mekong Subregion (GMS) (noun): "a development project formed by the Asian Development Bank in 1992 that brought together the six states of the Mekong River basin, namely Cambodia, Laos, Myanmar, Thailand, Vietnam, and Yunnan Province, China. The GMS is a natural economic area bound together by the Mekong River, covering 2.6 million square kilometers and a combined population of around 326 million" (Source: Wikipedia) -

growth (noun): economic growth, an increase in economic activity - การเติบโต

high profile (adj): being well known to the public -

hike : an increase - การเพิ่มสูงขึ้น

husk : the outer covering of rice or some other grain - แกลบ, เปลือก

import : to buy or bring in products from another country - นำเข้า

improve : to make better - ทำให้ดีขึ้น

influence : the power to have an effect on people or things - อิทธิพล

influx : a large number of people or things coming in to a place - การหลั่งไหล การไหลบ่า  (เข้าไปยังที่ใดที่หนึ่ง)

infrastructure : a set of systems within a place or organisation that affect how well it operates, e.g., the telephone and transport systems in a country or the system of train tracks that a railway uses - สาธารณูปโภค

ingredients : foods that are used with other foods in the preparation of a particular dish - ส่วนประกอบ

initiative : a new action or movement, often intended to solve a problem - ความคิดริเริ่ม

interconnectivity (adj.): how much or how well two things are connected together, so they can work together effectively -

inundation : flooding - น้ำท่วม

investment (noun): the act of investing money in something - การลงทุน

investors (noun): people or organisations that invest money, i.e., use money with the aim of making a profit from it, for example by buying property or buying shares in a company - นักลงทุน

key : very important - ที่สำคัญ

level : the amount of liquid that there is in a container, which can be seen by how high the liquid is - ระดับ

local : in or related to the area that you live, or to the particular area that you are talking about - ท้องถิ่น

locals : people who live in a particular place - ชาวบ้าน

located : where something is - ตั้งอยู่

majority : more than 50 percent of a group - เสียงส่วนใหญ่

meanwhile : at the same time - ในเวลาเดียวกัน

merchant : a person or business that buys and sells goods, especially one that trades with other countries - พ่อค้า, ผู้จำหน่าย, คนขาย

militarisation : when the military takes control of the government -

mill (noun): a building fitted with machinery for crushing, cutting or grinding something - โรงสี, โรงเลื่อย

mine : a deep hole or holes under the ground where minerals such as coal, gold, etc. are dug - เหมืองแร่

ministerial : involving government ministers - ระดับรัฐมนตรี

ministry : a government department that has a particular area of responsibility - กระทรวง

natural : existing in nature; not made or caused by humans - เป็นธรรมชาติ, ตามธรรมชาติ

network : a large system of connected parts, organisations, people, etc. - เครือข่าย

observation : the process of watching someone or something carefully, in order to find something out - การสังเกต

obstruct : to make it difficult for something to happen or for someone to go somewhere - ขวางทาง

operation : an activity which is planned to achieve something - การดำเนินการ

overland : traveling on land and not water or by air -

overnight : suddenly or quickly, e.g., in one night - ในเวลาอันสั้น, ข้ามคืน,อย่างรวดเร็ว

peel (noun): he thick outer layer of some fruits and vegetables - เปลือก

perceive : to come to an opinion about something, or have a belief about something - รับรู้

plant : a factory; a factory that produces power or processes chemicals, etc. - โรงงาน

policy (noun): a set of plans or action agreed on by a government, political party, business, or other group - นโยบาย

port : an area of water where ships stop, including the buildings around it - ท่าเรือ

poverty : the condition of being extremely poor - ความจน

power : energy, from electricity or the human body, for example - พลังงาน, พลังงานกล,พลัง, กำลัง, แรง

power (noun): political control of a country or an area; having a lot of influence and authority to control people and situations - อำนาจ

premier (noun): prime minister - นายกรัฐมนตรี

produce : things that have been made or grown, especially things connected with farming - ผลผลิต, ผลิตผล

profit : money that you make from selling goods and services after all your costs have been paid - กำไร

proposed : suggested as an idea for a group to consider - ถูกเสนอ

provide : to give someone/ something that they want or need - จัดหาให้, จัดเตรียมไว้ให้

province : one of many divisions of the government of a country into smaller parts - จังหวัด

pulp : a soft wet substance that is made especially by crushing something - เนื้อเยื่อในที่นิ่มและมีของเหลวมา

pulp mill : a factory for making paper from wood pulp -

purchase : something that has been bought - ของที่ซื้อมา

purchase : the process of buying something - การซื้อ

put off by : not liking something because .... -

railroad : railway; the whole transportation system of trains connecting stations along rail tracks - รางรถไฟ, ระบบทางรถไฟ

railway : the whole transportation system of trains connecting stations along rail tracks - รางรถไฟ, ระบบทางรถไฟ

rank : to put someone or something into a position according to their success, importance, size etc - จัดลำดับ

rapids : fast moving water in a river -

raw material : a basic material that is used to make a product - วัตถุดิบ

record : a written account of something that is kept so that it can be looked at and used in the future - บันทึก, รายงาน

region : a large area of land or space, usually without exact limits or borders - ภูมิภาค, ขอบเขต, แถบ, บริเวณ

relations : the way in which two people, groups or countries behave towards each other or deal with each other - ความสัมพันธ์

resemble (verb): to be like or look like someone or something else - มีลักษณะคล้ายกับ

route : the roads, paths, waterways, etc., used to go from one place to another - เส้นทาง

season (noun): a period of time during the year - ฤดูกาล, ช่วงเวลา, ระยะเวลา

share : one part of something that is divided between two or more people - ส่วน

slowdown (noun): when the economy moves more slowly and worker incomes and company profits suffer and increase more slowly -

so-called : used for saying that a particular word is usually used for referring to someone or something - ที่เป็นที่รู้กัน

sovereignty : the right of a country to rule itself - อำนาจอธิปไตย อำนาจเด็จขาดเหนือพื้นที่

species : different kinds of animals -

sub- : a smaller part of a bigger thing or group -

suburb : an area or town near a large city but away from its centre - ชานเมือง

suspend : to stop for a period of time - ยกเลิกชั่วคราว, ระงับชั่วคราว

thanks to : because of - ด้วยเหตุ, เพราะ

thermal : relating to or caused by heat - ที่เกี่ยวกับความร้อน

threat : a danger - อันตราย

trade : the amount of goods or services that a business buys and sells - การค้าขาย

trade : the buying and selling of goods and services - การค้าขาย

transport : moving people or things from one place to another - การขนส่ง

unruly : difficult to control - ยากที่จะควบคุมได้

upset : to cause to be very worried, angry or sad about something   - ทำให้วิตกกังวล ทำให้หงุดหงิด

value : how much something is worth in money or other goods for which it can be exchanged - มูลค่า

vast majority : much more than half -

vessel : a boat or ship - เรือ

vulnerable : easily damaged or harmed - ซึ่งถูกทำลายได้ง่าย

waterway (noun): a river, canal, etc. along which boats can travel - ทางน้ำ เช่น แม่น้ำ คลอง

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