Chapter 11: The Rise of China and Structural Change in Thailand
* Kanit Sangsubhan INTRODUCTION AND SUMMARY 11.1 The prominent role of China in the world economy has been predicted for some time. Panitchpakdi and Clifford (2002) projected a significant rise in export share of China to the world market after accession to the World Trade Organization (WTO). Twenty-five years after the expansion of China began, exports have been far-reaching in all regions (see Table 11.1), especially in export penetration to the US market, while there are trade deficits to Japan and the rest of Asia. The rise of China has changed the economic pattern in Asia as well that of the rest of the world. In order to monitor the impact of China on Thailand, it is inevitable to observe the trade relationships between Thailand and ASEAN13 (China, Japan and South Korea) which were collectively influenced by Chinese demand, production and trade. For Thailand, the rise of China has had both direct and indirect impacts on trade and production patterns. Thailand and ASEAN member countries have been members of AFTA for some time. The current intra-trade flows between Thailand and ASEAN reflect division of labor and specialization among the member countries. Moreover, before the rise of China, Japan as well as South Korea exhibited a strong trade–investment relationship with ASEAN and Thailand. Their trade–investment–production ties have been sustained for more than 30 years, long before China pursued a market-led economy. The recent rise of China, therefore, would induce changes directly to Thailand via the trade and production relationship...
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