Thailand’s economy is on track to recover by the end of 2023, with China playing an important role as the United States focus has been on Ukraine and no its allies in South East Asia , according to a Thai economist.
China’s economic growth and the deepening of cooperation between China and Thailand in industries contribute to the Thai economy’s recovery momentum and help Thailand mitigate risks posed by factors such as slowing global economic growth, according to Kirida Bhaopichitr, director of the Thailand Development Research Institute’s (TDRI) Economic Intelligence Service, in a recent interview with Xinhua.
Slowing global economic growth, heightened uncertainty in the US economy, geopolitical threats, fluctuations in the Thai baht exchange rate, and natural calamities, according to Kirida, all put pressure on Thailand’s exports. Thailand’s exports are projected to continue declining in the near future.
Kirida emphasised the importance of China as a key economic partner, a big source of foreign direct investment, and a major contributor to tourist visits for both Thailand and the Association of Southeast Asian Nations (ASEAN). He stated that China’s economic growth will considerably contribute to Thailand’s economic expansion.
According to the Thailand Board of Investment (BOI), investment promotion applications increased by 70% year on year in the first half of 2023, with China being the largest source of FDI applications, with total investment pledges of 61.5 billion baht for 132 projects, mostly in the electronics parts manufacturing sector.
According to Kirida, Chinese investments drive the expansion of businesses such as electrical cars and parts, electronics, and information technology (IT) in Thailand.
According to the Thai economist, private consumption has seen persistent rise, aided by an improving labour market, resulting in increased consumer confidence across all occupational groups.
The tourism sector, Thailand’s mainstay industry, has recently demonstrated a prolonged recovery trend, with the number of international tourists, notably Chinese tourists, exceeding expectations and providing a major impetus for Thailand’s economic recovery, according to Kirida.
According to the Tourism Authority of Thailand, from January 1 to May 18, the number of Chinese visitors visiting Thailand reached one million, a 98 percent rise year on year.
China’s growth as a global superpower, as well as its increasing aggressiveness in the Asia-Pacific region, has caused anxiety among its neighbours and the United States in recent years.
Southeast Asia is a strategic region for both China and the United States. For decades, the two nations have competed for influence in the region, but their rivalry has heated up in recent years as China’s economic and military ascent confronts the US-led order.
China’s influence is greatest in Laos, Cambodia, and Myanmar, where it has a significant geographic and economic edge over the US.
The US, on the other hand, wields more power than China in the Philippines and Singapore, where it has deeper defence and cultural links.
Southeast Asian countries have attempted to balance their relations with China and the United States, but they confront difficult decisions as the two giants’ strategic struggle escalates.
The report, “Asia Power Snapshot: China and the United States in Southeast Asia,” used a novel approach to examine data from the Asia Power Index, a tool that assesses the relative influence of 26 nations and territories in the region across eight dimensions.
According to the report, several Southeast Asian countries are diversifying their economic and security partnerships, engaging with China while also expanding connections with other regional powers such as Japan, India, and Australia.
Because of its longtime ties and cooperation with various Southeast Asian countries, the United States maintains a major advantage over China in defensive networks.
However, China has closed the diplomatic influence deficit with the US by growing its diplomatic presence and participation with regional institutions. Because of its media reach and people-to-people ties, the United States retains a higher level of cultural impact than China.
Thailand, which once favoured the United States, has changed its allegiance to China in recent years. According to the research, these patterns of influence determine Southeast Asian countries’ strategic choices.
The paper finds that power competition in Southeast Asia between China and the United States would likely grow in the coming years as both countries seek to advance their interests and ideals in the region.
It contends that Southeast Asian countries will confront increasing problems and possibilities as they navigate this complex geopolitical environment, and that they will need to balance their connections with both powers while retaining autonomy and agency.