Bank of Thailand Governor Highlights Challenges in Manufacturing and Banking Due to Rising Chinese Goods
The influx of Chinese goods has significantly affected Thailand's manufacturing growth and constrained loan expansion in the banking sector, according to the Bank of Thailand's chief.
Speaking at the 'Thailand Next Move 2025: Resiliency for an Uncertain World' seminar, Bank of Thailand governor Sethaput Suthiwartnarueput noted an increase in Chinese imports since 2014, with a marked surge since 2020 due to geopolitical and economic fragmentation.
From 2020 to 2023, Vietnam was the largest Southeast Asian importer of Chinese goods, followed by Thailand, which imported US$71.1 billion worth of goods in 2023.
Although domestic consumption in Thailand has grown, manufacturing growth has slowed, leading to a declining correlation between these two sectors.
Geoeconomic fragmentation has also adversely affected loan growth, particularly in auto lending.
Additionally, changes in US policies could further influence global trade and monetary policies.
The Bank of Thailand aims to enhance economic resilience, but stresses that monetary policy alone cannot achieve this.
A new debt restructuring scheme will be introduced to address Thailand's high household debt, building on existing financial aid programmes that have supported 6.1 million accounts, totaling 2.1 trillion baht.