Thailand is a success story of globalisation, and has benefited enormously from an open global economic order. The country’s rise to upper-middle income status has been fueled by inward investment and export industries. 

In April, the United States began to impose severe tariffs on a wide range of Chinese goods. China has responded in kind. Both sides are escalating the confrontation.

What are the implications for Thailand? Will the economy be hit by global market disruption? Or could it gain from diversion of trade and supply chains? Will there be other fallout? How might the Thai government manage these challenges?

This subject has far-reaching consequences for local and international businesses and it has been debated recently by four panelists chosen by the FCCT.

Where is this coming from ?

The main reason behind the US-China trade war is that the United States wants to reduce its trade deficits.

US President Donald Trump tweeted on 4 April 2018 that ‘[the United States has] a Trade Deficit of $500 Billion a year, with Intellectual Property Theft of another $300 Billion. We cannot let this continue!’.

We are not in a trade war with China, that war was lost many years ago by the foolish, or incompetent, people who represented the U.S. Now we have a Trade Deficit of $500 Billion a year, with Intellectual Property Theft of another $300 Billion. We cannot let this continue!

— Donald J. Trump (@realDonaldTrump) April 4, 2018

Since then Donald Trump has also tweeted more explicit reasons to consider that the trade with China is unfair and thus damaging US commercial interests. Like in a more recent tweet of September 9 :

If the U.S. sells a car into China, there is a tax of 25%. If China sells a car into the U.S., there is a tax of 2%. Does anybody think that is FAIR? The days of the U.S. being ripped-off by other nations is OVER!

— Donald J. Trump (@realDonaldTrump) September 9, 2018

Many US commentators think that the enormous imbalance of trade with China is tantamount to fueling US indebtedness to China, which they consider to be a huge vulnerability for the United States.

China also owns about a third of the US treasury bonds and could use this as a leverage if things goes wrong.

commented Kirida Bhaopichitr, Director of the Economic Intelligence Service (EIS) at the Thailand Development Research Institute (TDRI).

But the US trade deficit is not only the only concern of Donald Trump with China.

China ‘s raising influence and plan to become a tech power by 2025 is a direct threat to the United State leadership

says Kirida Bhaopichitr

By staging a trade war with China the United States also wants to hamper China’s progress toward being a high-tech superpower. The tariffs…

Source link : What are US-China Trade War Implications for Thailand ? by Olivier Languepin

The Belt and Road Initiative (BRI) promises to radically transform a vast swathe of the world’s trade and transport infrastructure, which will have a marked impact on how Asia does business with the world and vice versa.

While it is a relatively new idea, the BRI also harks back to medieval times, when the Silk Road flowed between East and West. The Silk Road was a series of trade routes criss-crossing the Asian landmass. Its more famous travellers included Marco Polo and Ibn Khaldun. During this time this trade flow was responsible for the transfer of goods, services and ideas across the globe.

The BRI seeks to update this idea to meet the demands of the 21st century, adding a maritime arm and a host of road and rail links. Previously referred to as One Belt, One Road, the infrastructure investment needed for the plan is estimated at $5trn by PwC.

In May 2017 China pledged an extra $113bn for the BRI, to be disbursed via the state-owned Silk Road Fund, set up in 2015 with $40bn of initial capital from the China Development Bank and the Export Import Bank of China.

In addition, the Asian Infrastructure Investment Bank (AIIB), with some $100bn in capital, and the New Development Bank, with $50bn, are financing the project from their respective bases in the cities of Beijing and Shanghai.

This funding is backing up a range of infrastructure projects, with the BRI also making clear provisions for partnerships, particularly with non-Chinese enterprises.

The benefits of this are considerable: foreign outfits can engage in major projects that enjoy Chinese government-backed guarantees, while also contributing their expertise and local knowledge to ensure project success, further reducing risk all around.

Doors open to China

Such partnerships with third-party countries can also help open doors in China itself, by helping to establish good working relationships, which are at the heart of doing business in a market that can be difficult to navigate.

For China, the BRI builds on the outward momentum of its foreign policy, which started with the Go Out policy of the late 1990s. The increase in overseas trade and investment is boosting Beijing’s drive to internationalise its currency and find new markets to maintain growth momentum and use up excess capacity at home.

The BRI addresses a major need for improvement in Eurasia’s infrastructure

This is critical if economic growth is to move many of the supercontinent’s countries out of the low- and middle-income traps. In February 2017 the Asia Development Bank estimated that this would need $22.6trn in the lead-up to 2030, which could rise to a possible $26trn if climate change is taken into account.

The BRI, and the AIIB in particular, are thus seen…

Source link : China’s Belt and Road Initiative to reshape routes in Thailand by Oxford Business Group

Rising international demand will likely see Thailand come close to equalling last year’s record for rice exports, with strong sales supporting higher rural incomes and contributing to broader economic growth, though success could bring its own challenges.

In mid-August the Ministry of Commerce’s Department of Foreign Trade (DFT) announced that it expected outbound rice shipments to reach 11m tonnes this year – a 1.5-tonne increase over estimations issued earlier in the year – on the back of rising demand and a weaker baht.

Adul Chotinisakorn, director-general of the DFT, said sales had risen significantly across all international markets, particularly in Indonesia (679%), Malaysia (53%) and the Philippines (25%), and that the country had exported a total of 6.7m tonnes as of August 8.

Negotiations with China for the sale of an additional 1m tonnes of rice are also set to begin at the end of August, further boosting export expectations.

In total, overseas shipments are expected to account for more than half of Thailand’s rice harvest this year. Output is currently estimated at around 21m tonnes, according to the US Department of Agriculture’s Foreign Agricultural Service.

Earnings set to rise alongside exports

The improved outlook could make 2018 the second year running that Thailand has exported record volumes of rice.

Last year it shipped 11.48m tonnes of the cash crop, exceeding its previous high of 10.96m tonnes in 2014. The industry is also expected to generate higher revenues this year. As of early August, total sales had reached $3.4bn – a 9.8% increase year-on-year – putting the industry squarely on track to surpass last year’s sales total of $5.1bn.

Reducing the previous government’s stockpile

In addition to rising international demand and a more competitive currency, the stronger sales performance is also due in part to the government’s successful reduction of its 18.7m tonnes of stockpiled grain built up by the previous administration’s subsidised buying programme.

Supported by reduced output from its competitors due to drought conditions caused by the El Niño phenomenon of 2015-16, the government was able to release a substantial portion of its stored rice over 2016 and 2017 so that by mid-March this year only 2m tonnes remained.

Higher farm incomes raise economic prospects

The reduction of the government’s rice inventory and the increase in export sales has supported a steady rise in farm incomes in recent months, according to a report issued at the end of June by the Kasikorn Research Centre.

Second-quarter income rose by 8.7% in April, peaked at 10.3% in May and grew 7.9% in June, the report found.

This strong performance took half-yearly farm income…

Source link : Demand and new variety supports Thailand’s rice exports and earnings by Boris Sullivan

Uoolu, the leading platform for the cross-border real estate transaction in China, along with hundreds of prestigious media, release the “Uoolu 2018 Ten Countries on Belt and Road Property Investment Data Report”.

“Belt and Road Initiative” was proposed by the Chinese government in 2013 in order to strengthen the relationship with surrounding Asian countries. Since then, we’ve seen frequent activities between China and the Asian countries from the perspective of property investments.

In the report, Uoolu selects eight countries in Southeast Asia and two countries in the Middle East as the researched markets based on Cooperative Development Index, which assesses the investment risk in the Belt and Road Initiative.

The ten countries are ranked by different criteria such as housing price growth rate and price-to-rent ration. The intelligence offers as an indicator of ten countries on Belt and Road and highlights the significant and accessible property markets, also the demographics of Chinese investors.

Surprisingly, the primary investors in overseas property are aged between 30 to 49 years old and are mostly from the new industries. Investors come from IT, and the Internet business accounts for 31%, who are keen to mobile technology and open to new services.

The new affluent generation has exhibited a short decision-making cycle. 43.56% of the Chinese investors only take a week to decide on a property investment, and 67% invest between US$ 70,000 to $150,000 takes up to 67%.

The report also reveals that Thailand, the Philippines, The United Arab Emirates, and Vietnam are the major markets today and receive the most attention from Chinese investors.

Uoolu Website: www.uoolu.com

The post Thailand Tops Belt and Road Property Investment Data report appeared first on Thailand Business News.

Source link : Thailand Tops Belt and Road Property Investment Data report by Daniel Lorenzzo

The University of the Thai Chamber of Commerce (UTCC) forecast the Thai economy will grow by 4.5-5% throughout this year and Krungthai Bank (KTB) has maintained Thailand’s economic growth forecast for this year at 4.5 percent.

BOT Governor Veerathai Santiprabhob said that, according to the National Economic and Social Development Board, the Thai economy in the second quarter of 2018 expanded by 4.6%, bringing overall growth for the first half of the year to 4.8%. The figures align with forecasts issued by the central bank.

UTCC’s Center for Economic and Business Forecasting (CEBF) Director Thanawat Ponvichai said the Thai economy throughout this year has shown signs of a good recovery, given better public awareness and better distribution of incomes, with the growth in the first half of 2018 accounting for 4.8% due to the better performing export sector which is likely to achieve 8% growth throughout this year.

Veerathai revealed that the upcoming meeting of the BOT’s Monetary Policy Committee in September will consider revising the 2018 GDP estimate, which was previously forecast in June at 4.4%.

The growth in the first and second quarters was attributed to the recovering tourism sector which helped boost the economic growth in many provinces, while the increased farm product prices brought more incomes to the farmers.

The economic growth for the latter half of 2018 is expected by no less than 4.2%, according to the UTCC, with the likelihood of the growth extending to 4.5-5% if the export sector performs well, the global economy continues to recover, the number of tourists increases, farm product prices increase, and the government speeds up the disbursement of funds for the implementation of its projects.

The CEBF chief said the current flooding does not seriously affect tourism and industrial areas or the national economy as a whole and will not develop into a big risk factor.

He added many factors need to be closely monitored, including the global economic situation, the trade war between the United States and China, the Turkish currency crisis, and the inflated oil prices.

KTB maintains Thai economic growth projection at 4.5%

Krungthai Bank (KTB) has maintained Thailand’s economic growth forecast for this year at 4.5 percent.

The Senior Vice President of KTB, Dr. Phacharaphot Nuntramas, said on Tuesday that the Thai economy is expected to maintain growth momentum in the second half of 2018.

Dr. Phacharaphot said the agricultural sector grew very well in the first six months of this year, thanks to suitable weather conditions, which may be a temporary factor.

He said the non-agricultural economy…

Source link : UTCC and KTB forecasts 4.5% GDP growth throughout 2018 by Boris Sullivan

Fintech is a new financial industry that applies technology to improve financial activities, with key areas being the automation of insurance, trading and risk management.

Between 2005 and 2015, global investment in fintech increased by more than 2200%, from $930m to some $22bn.

Fintech’s potential remains big. From the demand side across much of south-east Asia, the unmet need for basic banking services is significant. KPMG reports that only 27% of the region’s 600 million inhabitants had a bank account in 2016.

From the supply side, a new wave of start-ups is increasingly ‘disaggregating’ global banks. Milken Institute’s Centre for Financial Markets reports that much of the venture capital in Asia has flowed into China, particularly among a handful of large tech companies. Yet other countries also are seeking to position themselves as fintech hubs.

The Straits Times reported that multimillion-dollar investments were reported in 2017 in Hong Kong (in digital wallet operator TNG FinTech Group), in India (in online lending platform Capital Float) and in South Korea’s second largest cryptocurrency exchange, Korbit.

Source link

The post Fintech hold massive potential for Asian businesses appeared first on Thailand Business News.

Source link : Fintech hold massive potential for Asian businesses by Headline Editor

Developers and buyers all want to know the impact on the property market of the 197-kilometre mass transit lines under construction in Bangkok.

These new infrastructure developments, in addition to the 110km of existing mass transit lines, will improve access to and from inner city areas and link midtown areas.

This will affect the property market, especially the residential market. The popularity of each line can be seen from its ridership, as well as the number and prices of residential units along the line. These factors show not all lines are equal.

Currently, the BTS Light Green Line, with 750,000 passengers per day, has seen the most developments of residential, office, retail, and hotel properties.

It is followed by the MRT Blue Line, with 350,000 passengers per day, where developments have been concentrated along Ratchadaphisek road.

For the MRT Purple Line, many condominiums were launched during its construction with high expectations. However, with currently only 51,000 passengers per day, it will be less attractive for developers to invest further in projects along the line until the passenger numbers improve.

Residential developers are also acquiring land plots before the completion of the new lines under construction. Speculative residential property buyers are willing to purchase soon after construction starts on the lines.

End-user buyers who represent real demand only make decisions when they see there is significant progress on the lines and the projects they are planning to buy can be completed about the same time the line becomes operational. Many end users need the line to be operating before they decide to live in the property.

How mass transit moves condominium market | Bangkok Post: business

The post How mass transit reshapes Bangkok’s property market appeared first on Thailand Business News.

Source link : How mass transit reshapes Bangkok’s property market by Daniel Lorenzzo

Officials within Thailand and Vietnam are now pushing for regulations to be established with regards to ICOS.

Especially as lawmakers in Vietnam are trying to ensure businesses are not able to participate in activity related to cryptocurrencies until there are clear regulations. Thailand officials are also ready to give similar guidance to the public within their country.

In fact, South Asia in general is now seen as a location whereby there is a lot of activity to be found in regards to initiating regulation around cryptocurrencies.

In 2018 Vietnam saw state officials request that businesses suspend any crypto related activity until a regulatory framework is established. This includes activity such as consultancy, issuing of cryptocurrency and brokerage.

They have also issued a warning to potential cryptocurrency investors, using a lack a regulation as a risk factor that needs to be taken into consideration.

Just before this request was made by state officials a deputy director at the Ministry of Justice in Vietnam said that the anonymous nature of cryptocurrency transactions made them potential dangerous and open to criminal activity.

A warning to cryptocurrency investors

Officials in Thailand stated that a recent study on investment capital in ICOs showed that 95% of these ventures will actually fail, but the 5% that didn’t fail were seen to be very profitable. The Thailand Security and Exchange Commission believe that high risk, high failure rate investments such as these need oversight from the Government.

Thailand has recently seen a cryptocurrency exchange named Jibex open its doors within the country. To start with only five cryptocurrencies will be supported; bitcoin, bitcoin cash, ether, Litecoin and ripple, with more expected to be added in the future. A wallet supporting these currencies is also offered by the exchange.

There are many who would hope that it would lead to the country embracing cryptocurrencies in other aspects of the economy and maybe may even help bring about change in gambling legislation.

As it is well known that the crypto world makes transactions secure and fast, whilst being cost effective; which may help alleviate concerns officials may have with gaming. This would be great news for SBOBET and other popular online gaming sites, but we can only wait and see what the future holds.

Vietnam has seen the introduction of the Kenniex cryptocurrency exchange, in Ho Chi Minh City and is the first live cryptocurrency exchange in the country. Bitcoin can be converted into VND or VND into bitcoin via the…

Source link : Cryptocurrency in Thailand and Vietnam by Pr News