The Commerce Ministry plans to limit the amount and value of goods imported online each year, government spokesman Chai Wacharonke said. Neither Srettha nor Chai referred to China, but groups such as Thai Industries and the Thai Chamber of Commerce have said local producers are suffering from competition from Chinese goods.
“There is an unusually high influx of imported products on the internet,” government spokesman Chai Wacharonke told reporters after a cabinet meeting. “This is hitting our local producers, especially SMEs, hard. We are not complacent about this.”
While China has come under criticism for importing cheap goods over the years since it rose to become a manufacturing powerhouse decades ago, its exports have recently come under increased scrutiny as countries grapple with growing trade deficits and factory closures.
Indonesia, Malaysia and Vietnam have also increased their vigilance against Chinese imports in recent months, for example by reviewing their anti-dumping policies, launching investigations and reintroducing tariffs. The measures affect steel, textiles, plastics, leather, rubber, wood and – recently – even consumer goods.
The influx of Chinese products is compounding the challenges facing Thailand’s ailing economy. The country’s economy is the second-largest in Southeast Asia, growing by just 1.5 percent in the first quarter and closing nearly 2,000 factories last year.
Small and medium-sized enterprises were hit particularly hard: less than half of the 3.2 million SMEs in Thailand have access to loans from financial institutions.
Those that manufacture in Thailand and participate in government tenders currently receive a five percent subsidy, giving them a slight advantage over foreign firms but not enough to make a difference, says Kriengkrai Thiennukul, chairman of the Federation of Thai Industries (FTI).
“We need to temporarily raise this rate from five to 20 percent for two to three years,” he said.
“This will put real money circulating in the system, which could significantly stimulate the economy.”
The subsidy system introduced last year has helped local SMEs secure a 15 percent market share in government tenders and has so far brought them 102 billion baht ($2.9 billion), said Kriengkrai, whose association represents more than 16,000 private firms and lobbies the government on their behalf.
The FTI’s goal is to increase its market share to 30 to 50 percent this year, he added.
The government must better protect local companies in the long term, otherwise they will not be able to survive a “tsunami” of cheap goods from China, said Kriengkrai.
Online shopping platform Temu, owned by China’s PDD Holdings Inc., recently entered Thailand, raising concerns about its impact. Other popular e-retailers in Thailand include Alibaba Group Holding Ltd.’s Lazada and Sea Ltd.’s Shopee.
“We need to take measures to support our SMEs so that they can adapt and compete in the market both offline and online,” Srettha said in a briefing, referring to small and medium enterprises.
Nevertheless, the government will try to “find a balance” between protecting local businesses and complying with international trade agreements, Chai said.
