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    Thai business stories

    Choosing cheap Chinese Products over Thai jobs

    By needchange, Created on: 17/10/2010, Last updated on: 24/11/2015

    ยป Everyone knows the story of what has been happening in the US in terms of the trade deficit with China. If you go to Walmart, almost every product sold there comes from China. Walmart is America's biggest retailer if I'm correct. The trend is the same at many other retailers around the country. So...

    • Eric commented : I do believed that the China trend is slowly changing both from external pressures as well as internal pressures. We know that economics play a big role with cheaper labour costs, under-value Yuan and compromising costs to quality. However past few years have seen headline news on toxic milk, non-compliance construction materials and lead filled toys and consumers are starting to ask questions and obviously buying less. To China's government credit, they have started to tightened regulations and reining in the offenders with very serious punishments. Wages in China are starting to creep upwards especially along the coastal provinces and inland manufacturers which have cheaper labour costs will have to factor the high transportation costs to export. The Yuan has also appreciated from RMB8+ to 6+ against the greenback in last 5 years and more countries are making noise and forcing the Yuan to strengthen; perhaps not very soon but certainly in the near future.China needs a strong Yuan to increase its domestic consumption so it need not depend too much on the export sector. In short, China will not be a low and cheap production base in next 5 years. Chinese manufacturers knows that and are feeling the upward cost pressures and are either moving to the inland west or move to cheaper locations like Vietnam, Cambodia or Laos. In fact, these countries will be more of a threat to Thailand then China in the near future for low cost products.

    • needchange commented : It would not be a bad thing if in fact things turned around and China wasn't a location for cheap goods. With such a massive population and a government that can do anything and allow anything in the name of the nation, I surely doubt that China is going to give up market share. It hasn't even got started yet in terms of 'capitalism.' All nations have the desire to better their own nation. In Thailand's case, where 15% of the population is ChineseThai and still has strong cultural and traditional connections to China and that 15% controls most of the power and wealth in Thailand, it will be a challenge for those in Thailand who wish all Thais to take a more pro-Thai stance on business. The feedline of cheap Chinese products has been running for over a century. Breaking this supplyline will only happen when the Thais doing business with China choose helping Thais over quick profits. The business relationship with China weakens the voice of all Thais. If you look at the US-China or US Saudi relationships, it's clear to see that once a dependance on the goods supplied by these countries was established the US lost power in its own decision-making. Not being able to influence these two foreign nations and instead being submissive to them has been one of the side effects of doing too much business with these nations. The US has little power over getting a deal on currency rates now that so many US companies are making money only by importing from China. It's like the drug user who becomes a slave of his supplier. The story with Saudi Arabia goes much further. It's obvious that the US has become protector of its supplier and so has gotten mixed up in foreign wars and in paying for them. So you have to ask how beneficial are these business relationship to the nation as a whole? They do benefit the importers (Walmart and oil companies) but the people are losing jobs and losing their power in terms of choosing the nations destiny.

    • 48 replies, 211,938 views

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