The forecast is consistent with an increasing global shift whereby traditionally exportdriven emerging markets are becoming global trading hubs, decoupling their previous dependency on developed markets to become important engines of global economic growth in their own right.
China and India are major trading partners with most of their neighbouring countries – not least Thailand.
Substantial import growth in these two biggest Asian economies offers considerable opportunity for Thai companies to grow their international business,” said Juthamas Ruangvanish, senior vice president of Global Trade and Receivables Finance, HSBC Thailand.
China’s growth in imports will overtake the value of its exports over the next five years, with growth rates of 5.1 per cent and 4.7 per cent respectively. This is because demand for imported goods and commodities will continue to grow, whilst demand for exports to developed markets will decline. At the same time, India will serve as Asia’s fastestgrowing exporter/importer with annualised rates averaging 5 per cent and 7 per cent respectively. Specifically, China is important to Thailand as exports in the first five months represented 12 per cent of Thailand’s total exports, and have become greater than Thai exports to the EU. China’s substantial import growth will act as a major catalyst to boost Thai exports during the second half of this year.
Thailand’s import growth reflects a similar trend, due mainly to reconstruction efforts resulting from last year’s record floods as well as new investment. According to Ministry of Commerce data, Thai exports for the first five months this year totalled Bt2.85 trillion, edging up 0.8 per cent, while imports totalled Bt3.19 trillion, up 14 per cent over the same period last year. Thai exports in May alone totalled Bt641.14 billion, up 10.7 per cent year on year, while imports totalled Bt703.03 billion, up 21.4 per cent year on year.
“With its exportdriven economy, we remain confident that Thailand is on track for a nearterm robust recovery. There is an increasing trend among major Thai companies to make use of their production bases in neighbouring countries, shift production to valueadded products, or focus attention on improving efficiency. In so doing, they are able to meet the challenges presented by increasing costs and competition for international trade,” Juthamas added.
HSBC’s Global Connections reveals 10 of AsiaPacific’s top 15 trading partners are from countries within the region, with the trend expected to gain momentum until 2026. Nine of China’s 15 largest import partners, and six of its fastestgrowing partners up to 2016, also come from AsiaPacific. Similarly, the six fastestgrowing export destinations for India up to 2016 are in either Asia or the Middle East.
Brazil appears in the top 10 highgrowth export destinations for every AsiaPacific market in the forecast. In the next five years, Brazil is expected to become AsiaPacific’s fastestgrowing export partner and second fastestgrowing import partner, with annualised growth rates of 10 per cent and 9 per cent respectively. Specifically, Brazilian exports of iron ore to China are forecast to increase by 11 per cent annually up to 2016. The report also shows that Latin America’s top five fastestgrowing import partners up to 2016 are India, China, Thailand, Indonesia and Singapore.
Automobiles have been identified as a key global growth sector. In Asia, imports of cars are predicted to grow at 6 per cent annually up to 2016. Supporting this growth, Chinese car imports are predicted to expand 12 per cent annually up to 2016, mirroring its demographic wealth trends. India is the region’s fastestgrowing car exporter, with an annual growth forecast of 13 per cent. HSBC forecast the 10.05 per cent growth rate annually up to 2016 for Thailand’s vehicle exports, while the annual car accessory export growth is estimated at 7.38 per cent. Imports of engine from Japan are forecast to increase by 6.86 per cent.
Alongside its strong production base, Thailand has buoyant commodity and infrastructure sectors.
Exports to China of vulcanised and nonvulcanised rubber, and raw rubber gum, are forecast to increase annually by 15.99 per cent and 7.31 per cent respectively up to 2016. Thailand itself imports iron and steel to support its own rapid infrastructure development and the Trade Forecast predicts Thailand’s role in supplying resources to the AsiaPacific region is growing in momentum. Additionally, Thailand’s consumer electronics sector is substantial, increasingly innovative and successfully adding value to products. In order to take advantage of the opportunities this sector offers for international trade, businesses need to grow at around 5 per cent annually over the next five years.