Economic Relations and Opportunities Between China and Thailand – Thailand Business News

China and Thailand maintain strong trade ties, with 2023 bilateral trade reaching $126.3 billion. China is Thailand’s largest trading partner and foreign investor, especially in electric vehicles and manufacturing.

Key Points

• China is Thailand’s largest trading partner, with bilateral trade reaching $126.3 billion in 2023. China primarily exports capital and intermediate goods, while Thailand’s exports, mainly agricultural products, heavily rely on China, accounting for over 40% of its exports.
• Chinese investments in Thailand are significant, with approximately 1,000 Chinese enterprises and about $7 billion invested in various sectors, particularly electric vehicles and digital economy initiatives. Both countries have a strategic cooperation partnership, enhancing economic collaboration.
• The 2024 visa waiver for Chinese tourists aims to rejuvenate Thailand’s tourism, which contributes about 12% to its GDP. Despite a trade deficit of $25 billion with China, Thailand actively seeks to strengthen ties, including support for the Belt and Road Initiative and potential BRICS membership.

In recent years, the economic partnership between China and Thailand has strengthened significantly, positioning China as Thailand’s largest trading partner and Thailand as China’s third-largest trading partner within ASEAN. The bilateral trade volume soared to USD 126.28 billion in 2023, with Thailand relying heavily on China for agricultural exports, which constitute over 40% of its production. Conversely, around 80% of China’s exports to Thailand comprise capital and intermediate goods, highlighting the interdependence in manufacturing sectors.

China has also emerged as the predominant foreign investor in Thailand, with nearly 1,000 Chinese enterprises operating within its borders. Recent data reveals that 588 investment projects, totaling USD 7 billion, primarily target modern manufacturing industries, including electric vehicles (EV), digital technology, and renewable energy. This aligns with the comprehensive strategic cooperation partnership established in 2013, which has allowed both nations to advance in various sectors, particularly as Thailand seeks to emerge as a hub for electric vehicle production in Southeast Asia.

Diplomatic relations between the two countries, initiated in 1975, continue to flourish, driven by mutual needs in trade, tourism, and cultural exchange. Thailand’s commitment to China’s Belt and Road Initiative (BRI) underscores its strategy to boost economic cooperation. In a bid to revitalize its tourism sector, which accounts for approximately 12% of GDP, the Thai government has signed agreements to waive visa requirements for Chinese visitors.

Despite a growing trade volume, Thailand faces a persistent trade deficit with China, totaling USD 25 billion in 2023. This trade deficit is projected to continue, reflecting the structural imbalance in imports and exports. Additionally, new protective measures such as proposed VAT on low-priced Chinese goods indicate Thailand’s attempts to safeguard local industries. The ongoing engagement in regional trade agreements, such as the ASEAN-China Free Trade Agreement and the Regional Comprehensive Economic Partnership (RCEP), further emphasizes both nations’ commitment to enhancing economic ties while navigating complex geopolitical landscapes.