Mon Sep 23 22:44:00 UTC 2024: ## China’s Deflationary Impact Spreads Globally, Affecting Thailand: NESDC
**Bangkok, Thailand** – China’s ongoing economic restructuring, marked by a burst real estate bubble and a shift towards high-tech production, is resulting in a global deflationary trend, according to Thailand’s National Economic and Social Development Council (NESDC).
Supavud Saicheua, NESDC chairman, highlighted the impact of China’s economic policies on Thailand during a recent seminar. He explained that while China’s domestic consumption remains low at 0.5%, its production of goods for global markets remains high, leading to a surplus that floods partner countries.
“China is exporting deflation globally,” Mr. Saicheua said. “This affects Thailand, as we are a small country inevitably affected by geopolitical problems.”
He suggested that Thailand should position itself as a connector for Chinese goods, drawing parallels to Hungary’s role as a conduit for Chinese products into Europe.
The NESDC also pointed out China’s dependence on imported food, with its population consuming 20% of global food production while only 9% of its land is arable. This presents an opportunity for Thailand, a major food producer and a significant agricultural exporter to China.
Regarding the upcoming US elections, Mr. Saicheua emphasized that regardless of the outcome, Thailand will be impacted. A victory for Donald Trump could lead to intensified protectionist policies, while a US budget deficit exceeding 6% of GDP and projected debt increase from $28 trillion to $50 trillion in the next decade will likely result in sustained high interest rates in the US.
Danucha Pichayanan, NESDC secretary-general, outlined the opportunities presented by Thailand’s geopolitical challenges. He advocated for attracting foreign investment to transform the country into a high-value economy, utilizing advanced technology and skilled labor to accelerate development. He also emphasized the importance of building energy security to position Thailand as the region’s energy hub.
In conclusion, the NESDC acknowledges the global economic impact of China’s deflationary policies, particularly on Thailand. However, it emphasizes the potential for Thailand to capitalize on the situation by positioning itself as a key connector for Chinese goods and a significant food exporter, while navigating the complex geopolitical landscape surrounding the US-China rivalry.
First Piper 