During an enlightening seminar held at the illustrious Eastin Grand Hotel Phya Thai in the heart of Bangkok, Poonpong Naiyanapakorn, the esteemed director-general of Thailand’s Trade Policy and Strategy Office (TPSO) dissected and discussed the potential repercussions of “The Decoupling of Key Industries Between the United States and China for Thailand’s Trade Economy”. This seminar also saw delegates from the Thai Chamber of Commerce in China, the Thai Shipper’s Council, and VISUP Co. Ltd converging in a highly collaborative effort with Thammasat University.
Poonpong touched upon the fascinating subject of turning the tide in trade confrontations, explaining how actions such as the passing of the Chip and Science Act 2022 by the US came into play. This Act was a strategic move to incentivise the burgeoning of domestic semiconductor industries. This, along with passing the Inflation Reduction Act 2022, aimed at propelling the auto industry, have resulted in significant knock-on effects on the global economy.
According to Poonpong, these policies influenced economies worldwide, particularly those keen on luring investments and maintaining capital, especially those equipped with chip manufacturing units, vital in almost every product production process. He went on to stress the importance for Thailand to continually analyse, strategise and tap into these developments.
The outcome of the comprehensive study revealed the decreasing interdependence of the US and China in trade relationships. This decrease was primarily driven by the shrinking Chinese market share in the US. In response to this shift, the US turned towards Thailand and Vietnam, increasing imports from these nations in the 2021-2025 period, focusing on products such as air-conditioners, cameras, hard disc drives, light-emitting diodes, circuits, electronics, and automotive components.
Despite the swell in the US market, Thailand’s market share in China experienced only a gradual bump, trailing behind Vietnam and Malaysia reveals Poonpong. Thailand has fared well in terms of gains from the relocation of production bases from China, especially evident in the electronics and electrical appliances sector. Chinese investment in Thailand’s automotive sector, notably centring around rubber tyres and auto components, saw a significant surge.
Poonpong’s detailed insights into international investment trends uncover a reluctance among companies to invest in China—specifically in the key semiconductor industries, given the ongoing decoupling. However, the electronic components sector saw steady investment patterns due to China’s robust connections with partners.
In light of these shifts and dynamics, Poonpong emphasised that Thailand must strategise and ramp up production capacity, especially in labour readiness, to convert the decoupling opportunities into tangible advantages. He also suggested an urgent need to streamline regulations and devise new strategies to attract skilled expertise to work in Thailand as an effective way to foster foreign investment.
Wrapping up his enlightening discourse, Poonpong stated with conviction, “Ultimately, being able to keep a clear competitive upper hand, guided by policies that closely align with the country’s potential, is critical for sustainable development in the long run”.
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