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In recent postings throughout the internet, speculation regarding the future of Southeast Asian economics abound. Meanwhile, further analysis of the Thai economy in particular is rife. In a recent article on Forbes’ official website evidence has been cited which would appear to point to the possibility that Thailand may experience an economic bubble burst akin to the crash of 1997. Various Thai government officials as well as Thai businesspersons were quoted as saying that certain aspects of the Thai economy are troubling. Notably, inflows of foreign capital specifically targeting the Thai property market as well as signs that Thai people are engaged in what could be described as conspicuous consumption are leading some experts to believe that Thailand could be headed for a new economic downturn.

Concurrently, the article went on to note that Thailand, ever susceptible to negative economic consequences arising from nations which maintain significant trade relationships with the Kingdom, may see problems in export sectors resulting from decreased demand in both China and the other nations which comprise the Association of Southeast Asian Nations (ASEAN). Should there be an economic problem in one of these countries then there could be a sort of negative ripple effect in the export sector in Thailand.

The points made in the article are compelling and certainly there may be cause for concern that the Thai economy may be placed in a difficult position in the future, especially if Thailand’s main export markets experience an economic downturn. However, the situation may not be as dire as some are predicting. Instead, this blogger would argue that Thailand’s economy may be simply in something of a state of flux due to changes in the ASEAN region and China. The dynamics of global economics are changing. American monetary policy along with economic problems in Europe have caused many to look toward Asia as a beacon of possible future growth.

In a recent article on the official website of Bloomberg it was noted that there appears to be a “boom” of sorts occurring in the Eastern province of Rayong and the region of Northeast Thailand known as Isan. As automobile manufacturing has increased in Rayong, so too has the purchasing power of residents of that province. Meanwhile, Isan is experiencing an upsurge economically as a result of increased domestic income and also concomitant demand for consumer goods from the local population. All of this news comes closely upon the heels of announcements that Thailand, Laos, and China will one day be connected via a high speed rail system. In fact, China has recently noted their commitment to that project and Thai officials have asked China to assist in the design of a rail system between Bangkok and Udon Thani (a city of 400,000 which sits close to the border and capital of Laos). There is an argument that should this rail system go into place the resulting economic boon to Thailand, particularly Northeast Thailand, could be tremendous as there could be a substantial increase in trade and tourism from China via this rail link. Moreover, Thailand could see itself becoming the entrepot for trade between South China and the rest of the ASEAN jurisdictions.

Presently, it is difficult to say whether Thailand will continue a trend of uninterrupted prosperity. However, there is strong evidence to suggest that increased economic integration with ASEAN as well as new, less logistically difficult, trade opportunities with China could usher in an era of prosperity and counter some of the negative factors currently worrying experts analyzing the current state of the Thai economy.

Tags: ASEAN, ASEAN-China business, ASEAN-Thailand Business, ASsociation of Southeast ASian Nations, Business in ASEAN, China, high speed rail Thailand, Isan, Laos, Rayong, Thai economy, Thai-China business, Thailand, Thailand Economy
Posted in ASEAN Business, China Business, Thailand Business | No Comments »

China’s Premier, Li Keqiang is set to make an official trip to Thailand between the 11th and 13th of  this month. The Premier will be present in the Kingdom of Thailand as a guest of the Royal Thai Government. This visit will be the first time the Premier of China has visited Thailand since taking up office. During his stay the Premier is slated to meet with Prime Minister Yingluck Shinawatra in an effort to seek methods of improving the Thailand-China Comprehensive Strategic Cooperative Partnership through mutually beneficial cooperative endeavors.

Apparently, the official representatives of the Peoples’ Republic of China and the Kingdom of Thailand are also poised to sign various agreements exclusively pertaining to the Sino-Thai relationship. These agreements will deal with matters such as investment between the two nations, development of infrastructure, technology, education, and energy to name just a few areas which will be covered. As of the time of this writing, Thailand is the coordinator for relations between the Peoples’ Republic of China and the Association of Southeast Asian Nations (ASEAN) and in that capacity it appears likely that the Thai PM and the Chinese Premier will discuss matters relating to the ASEAN-China Strategic Partnership.

Meanwhile, in related news Transport Minister Chadchart Sittipunt has recently made comments regarding the linkage of the Kingdom of Thailand, Laos, and China via high speed rail systems as well as other transportation initiatives under the aegis of the Thailand 2020 program. It would appear that plans are being implemented to construct a high speed railroad linking Bangkok to Nong Khai, the Northeastern Thai province bordering Viantiane, Laos. Construction of such a railway is expected to begin in the latter half of 2014. Upon completion of the project travelers will be able to make the trip between Bangkok and Nong Khai in approximately 3 hours. The system will then link up with Yunnan, China via Laos. Furthermore, enhanced roadworks are expected to be constructed, including new four-lane roadways, in order to streamline transportation both within Thailand as well as in Laos and China.

Clearly, these efforts are likely to fundamentally change the landscape of Northern Thailand both physically and economically. The linking of Northern Thailand, Laos, and Southern China will have a significant impact upon the economies of all three jurisdictions while simultaneously changing the way in which business is currently being conducted in this region. These developments are occurring as the ASEAN countries prepare for the coming integration of the ASEAN Economic Community (AEC) and it stands to reason that further cooperation between Thailand and China bilaterally and China and ASEAN multilaterally will see economic benefits not only for Thailand, but for the other ASEAN jurisdictions as well.

Tags: AEC, ASEAN, ASEAN Economic Community, ASEAN-China Strategic Partnership, ASsociation of Southeast ASian Nations, high speed rail Thailand, Li Keqiang, Premier of China, Prime Minister of Thailand, Thailand 2020, Thailand 2020 program, Thailand-China Comprehensive Strategic Cooperative Partnership, Transport Minister Chadchart Sittipunt, Yingluck Shinawatra
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