A man walks on Sathon Road with the Mahanakhon building in the background. Economists have suggested Thailand bolster its economy while lessening its reliance on China. JIRAPORN KUHAKAN
Thailand must strengthen its domestic economy and explore new export destinations to offset China's slower growth, says a source at the Finance Ministry.
The diminished pace of the world's second-largest economy and Thailand's second-biggest trade partner after the US is not expected to be short-lived, thus Thailand should strengthen its economy and seek new export markets in a bid to lessen the impact of China's transition, said the source, who requested anonymity.
China's economy is likely to grow by 6.7% this year, below last year's 6.8%, after constant growth of 6.7% for three quarters in a row.
The giant nation's economic growth is down sharply from the breakneck pace of more than 10% over the past three decades as it rebalances away from heavy industry and towards high-value services and domestic consumption for sustainable growth.
The World Bank has forecast GDP growth to average 5.5% a year until 2030.
The source said Thailand is fortunate to have high-risk buffers, with foreign reserves of US$180.5 billion as of September and a low ratio of public debt to GDP of 42.6%.
Moreover, rapid economic growth in Cambodia, Laos, Myanmar and Vietnam (CLMV) have helped offset the damage from China's slowdown, the source said.
The CLMV market has played a greater role in Thai shipments, accounting for 10.4% of the country's export value versus 11% for China.
In the long term, Thailand must move towards its 10 targeted industries to create an S-shaped growth curve, the source said.
The S-curve economy is categorised as existing industry (first S-curve) and future industry (new S-curve). The first comprises five industrial clusters: next-generation automotive, smart electronics, quality tourism, agriculture/biotechnology and food processing.
The new S-curve consists of robotics, aviation/logistics, biofuels/biochemicals, digital economy and medical hub.
The source said that the 10 targeted industry operators with a combined investment of 150 billion baht or 43% of the total Board of Investment's applications this year have already sought for investment incentives.
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