Thailand seeks to curb sales of cheap Chinese products to shield local firms

Prime Minister Srettha Thavisin on Tuesday asked government agencies to step up actions to stop suspicious imports, including tougher inspection of licences and registrations, payments and quality control, Bangkok Post reported.

He expects stronger anti-dumping measures for both offline and online transactions by the end of this month.

Last month, the government expanded the 7% value-added tax to include all imported goods priced below THB1,500 ($42.91), which were previously exempt.

Thailand’s Commerce Ministry plans to limit the annual quantity and value of goods imported online, according to government spokesman Chai Wacharonke.

“There is an influx of imported products online at an abnormally high level,” he told reporters. “This is severely hitting our local producers, especially small and medium enterprises. We are not complacent about this.”

The influx of Chinese products has added to challenges facing Thailand’s stuttering economy, with recorded growth of just 1.5% in the first quarter and saw nearly 2,000 factory closures in the past year, according to Reuters.

Businesses are now calling for higher government subsidies to help boost local manufacturing.

Those that manufacture in Thailand and participate in state procurement bidding receive a 5% subsidy currently, giving them a slight advantage over foreign firms, but not enough to make a difference, said Kriengkrai Thiennukul, chairman of the Federation of Thai Industries.

“We need to lift this temporarily for 2-3 years from 5% to 20%,” he told Reuters in an interview. “This will be real money circulating in the system that could boost the economy significantly.”

The government needs to better protect local businesses in the long term, otherwise they will not survive “a tsunami” of cheap goods from China, Kriengkrai added.

Up to June this year, more than 660 factories, mainly from the SME sector, shut down in Thailand, an 86% increase compared to the same period last year, he said.

“We may be getting more investment from overseas in new industries,” he said. “But at the same time, Thai SMEs are closing down like falling leaves.”