Thai economy faces upheaval due to cheap Chinese imports

Workers assemble a car inside BYD's first electric vehicle factory in Southeast Asia in Rayong, Thailand, on July 4. (Photo: Reuters)

Hanoi (VNA) – When Chinese electric vehicle maker BYD opened its first Southeast Asian factory in Thailand earlier this month, the country basked in the limelight and won praise for its industrial vision.

What, however, received less attention was an announcement by another big automobile manufacturer - Suzuki Motor, just a few weeks earlier that it will shutter a Thai factory that produced as many as 60,000 cars a year.

The Japanese automaker's move mirrors those by scores of other companies in Southeast Asia's second-biggest economy which is bearing the brunt of cheap imports from China and a slide in industrial competitiveness due to factors including rising energy prices and an ageing workforce.

Thailand has witnessed nearly 2,000 factory closures last year, upending its manufacturing sector that contributes nearly a quarter of its gross domestic product (GDP).

The manufacturing sector's woes have left Prime Minister Srettha Thavisin, who took power last year, struggling to fulfil his promise of bringing average annual GDP growth to 5% over his four-year term, up from 1.73% in the past decade.

The factory closures between July 2023 and June 2024 increased 40% from the preceding 12 months, according to the latest Department of Industrial Works data that has not been previously reported.

As a result, job losses jumped by 80% during the same period, with more than 51,500 workers left without work, the data shows.

Starting this month, Thailand is collecting a 7% value-added tax on cheap imported goods priced less than 1,500 THB (41 USD), mostly from China, but such products are still exempted from customs duties./.

VNA