The move follows the continued expansion of Chinese exports and policy measures described as "less tight than expected".

In the first three months of 2007, China's estimated gross domestic product grew by 11.1 per cent and its exports swelled by 27.8 per cent, according to the Beijing government.

Last year, its estimated GDP grew by 10.7 per cent to 20.94 trillion yuan (US$2.74 trillion). At yesterday's onshore rate of Bt34.64 for US$1, that makes the economy worth Bt94.91 trillion - more than 13 times larger than the Thai economy.

If China is to expand by 10 per cent this year, that means its GDP will rise to about Bt104 trillion.

In Thailand last year, all economic opinion was bullish for local GDP growth of at least 5 per cent in 2007. But since early this year, both the projection and sentiment have fallen. The latest figures from the Fiscal Policy Office now show a low-end-of-range prediction of just 3.8-per-cent growth. That means our GDP, which stood at about Bt7 trillion last year, will expand only marginally and fail to breach the Bt8-trillion threshold.

The news comes as a sombre reckoning for all Thais.

Fundamentally, the economy is growing in line with the rest of the world, as reflected by the near 20-per-cent growth in first-quarter exports. However, the economic pain of the baht's appreciation is clear when that growth is expressed in baht terms - at only 6.26 per cent.

Hurting the economy more is the fluctuating price of oil. In the bullish view of late 2006, average crude oil prices were officially expected to remain below $60 a barrel, but they're between $60 and $65.

However, the Thai economy has been wounded most by political turmoil, which has discouraged both investment and consumer spending.

Yesterday's Constitution Tribunal judgements on electoral fraud by political parties provided an extreme example of this. Fear of the outcome led to predictions of many possible scenarios. News reports suggested that dissenters would organise protests and, as police and the Army moved to prevent angry gatherings, there came fear of another coup.

News reports also led us to believe locals were so afraid of violence that they began stocking up on goods ahead of the rulings. Many countries issued warnings to their citizens in Thailand. In this kind of frenzy, it would be surprising for any large-scale company to embark on investment plans - and consumers can hardly be blamed for holding on to their hard-earned cash.

After opening up to the world about two decades ago, China is now growing aggressively and moving towards becoming the world's No-1 economy.

Having adopted democracy 75 years ago, Thailand's advancement has slowed abruptly since the heady 1986-1996 period, when it led the world in economic growth.

Who is to blame? It's probably a case of our population being much smaller than China's and our natural resources much less plentiful.

achara_d@nationgroup.com