The Food and Drug Administration (FDA) and police inspected 11 supermarkets and drugstores selling cheap imported goods in Bangkok earlier this month. The search found more than 1,600 imported items, such as instant noodles, drinks, vitamins, and medical supplies, that did not have the required FDA seals.
The inspection raised many eyebrows. Cheap imported products, mostly from China, have made inroads for years without attracting the government's attention.
The inspections are part of control measures prescribed last month by the Srettha government and responsible ministries to deal with an influx of dirt-cheap goods.
The government has had to wake up after the Chinese-run online marketplace Temu began operating in Thailand at the end of last month.
Two years after its launch, the app now operates in over 70 countries, gaining sizable market shares in the US and other big markets as it offers direct access to manufacturers in China.
Temu's popularity comes from its cheap prices -- 90% discounts on some items -- and effective marketing. For consumers unhappy with the goods purchased on its site, Temu offers 90 days to return them.
Owned by Chinese giant PDD Holdings, some have described it as "Amazon on steroids".
For local competitors, this new online platform is feared to be another wrecking ball that could harm local SMEs, factories, and jobs already under the pressure of an ailing economy.
Governments worldwide prescribe various measures against cheap imports from China. These vary from drastic measures such as the US's trade sanctions to non-trade barriers such as environmental and human rights conditions and tax measures.
Since last month, Thailand has had a 7% value-added tax on imported items priced below 1,500 baht, but it has stopped short of going further, as per Indonesia, which has raised import duties to 200% on a range of imported goods, including textiles, footwear, clothing, and cosmetics, to protect local industries.
Amidst all this, China is not just a major trade partner but a pengyou -- a friend.
China's friendship with Thailand is highly valuable and must be cherished.
However, it is time for the Thai government to be clinical in studying economic data and the reality on the ground.
Before Temu's arrival, China had been selling more goods to Thailand. In the first six months of 2024, imports from China increased by 7.12% year-on-year, amounting to over US$37.6 billion (about 1.33 trillion baht).
This has resulted in a trade deficit with China of $20 billion (about 720 billion baht), up 15.66% year-on-year.
The deficit can be wider and deeper if we factor in proxy businesses in tourism and fruit exports that have mushroomed across the country.
The question is not whether quality control measures that the government uses in dealing with the likes of Temu are sufficient or workable.
The bigger question is what can be done to stem the feared economic damage of such a system, which will contribute to the kingdom's already worrying economic situation.
It is only hoped that the government and policymakers will devise proportionate measures to deal with the matter.