Amid China’s dumping practices, Thailand has been inundated with cheap goods flooding its market, hurting the interests of local manufacturers. In response, the Thai government is planning to restrict the online sale of foreign goods.
Due to the increasing impact faced by local producers in Thailand, in recent months, online sales of foreign goods (especially cheap imports from China) have faced the strictest scrutiny.
On Tuesday, August 13th, Thai Prime Minister Srettha Thavisin called on government agencies to step up measures to prevent suspicious imports, including strengthening permit and registration checks, payments, and quality control.
Thavisin stated during the cabinet meeting that he hopes to see stronger anti-dumping measures for offline and online transactions by the end of this month.
Government spokesperson Chai Wacharonke mentioned that the Ministry of Commerce plans to limit the quantity and value of online imports annually. While Thavisin and Chai did not specifically mention China, organizations such as the Thai Chambers of Commerce and Industry have indicated that local producers are struggling due to competition with Chinese goods.
“The influx of imported products online is unusually high,” Chai told reporters after the cabinet meeting. “This situation severely impacts our local producers, especially small and medium-sized enterprises.”
Since July 5th this year, Thailand has started imposing value-added tax on imports below 1,500 Thai baht (approximately $42.65).
The recent trend of China’s expansion of cheap goods overseas inevitably harks back to the late 1990s and early 21st century, known as the ‘China shock’ experienced by the U.S. and the global economy. Hence, the current impact being termed as ‘China Shock 2.0′.
On May 16th, U.S. President Biden’s National Economic Adviser, Lael Brainard, emphasized the challenges posed by China’s industrial overcapacity. She noted that China is employing similar tactics as before, flooding global markets with “artificially low-priced export products” by investing in severely excessive industrial capacity to drive its growth.
It’s not just the U.S. remaining cautious of Chinese export dumping; in recent months, Indonesia, Malaysia, and Vietnam have also heightened vigilance on Chinese imports, implementing scrutiny through anti-dumping policies, launching investigations, and reinstating tariffs. The crackdown covers various sectors including steel, textiles, plastics, leather, rubber, timber, and even consumer goods.
According to local newspaper Thansettakij, Thailand has been hit particularly hard by the dumping impact, with over 3,500 factories closing in the past three and a half years.
Brainard condemned China’s disregard for rules. “China’s industrial capacity and exports in certain industries are now so large that it could impair the viability of investments in the U.S. and other countries. In fact, many of our partners worldwide have voiced similar concerns about the impact on their own industrial sectors.”
Last month, Chinese e-commerce giant PDD Holdings’ subsidiary Temu entered the Thai market. As reported by the Bangkok Post, Thai authorities are enhancing supervision over the low-cost shopping website Temu to protect local businesses from the impact of discounted, direct-selling Chinese products.
The Prime Minister has instructed the Ministry of Digital Economy and Society, the Revenue Department, and the police to ensure that Temu complies with local laws and pays appropriate taxes.
On August 13th, Thai Deputy Prime Minister and Minister of Commerce Phumtham Wechayachai stated that the entry of such a competitive platform has sounded the alarm for Thai small and medium enterprises, urging them to quickly adapt to survive in the new environment.
The Thai Ministry of Commerce also discussed measures to levy appropriate e-commerce taxes on international platforms. This is aimed at creating a level playing field for local businesses and safeguarding the domestic economy from potential harm.
According to industry consultancy firm Momentum Works, the Thai e-commerce market was valued at around $19 billion last year, showing a 34.1% year-on-year growth, making it the second-largest market in Southeast Asia after Indonesia.