Game over for thai exports : chinese exports declined in november, first time in 7 years

It was the “missing sign” we were waiting for…

China’s exports fell for the first time in seven years as a world recession slashed demand, adding pressure for more measures to sustain growth in the world’s fourth-biggest economy.

Exports declined 2.2 percent in November from a year earlier after gaining 19.2 percent in October, the customs bureau said in a statement on its Web site today. (Bloomberg)

After Japan, and many other countries (read here)… It’s game over. There is no way thailand’s exports can continue to grow, on a year on year basis with such a string of bad news on the worldwide trade front.

The “peak exports” was indeed reached last july. And we won’t see it again before a long time…

And I remind you that it was the only remaining growth engine for the country (even though it stalled already during Q3, read my special report on GDP…).

So the forecast is easy : the contribution of exports for GDP growth on Q3 was ZERO… we have to brace ourselves for a NEGATIVE contribution on the coming quarters. Therefore, what could save the growth ? Government spendings ? Inventories (like they did on Q3) ?

Anyway,  the first figures for exports in november will be released around december 20-22.

But there is no escape : the game is over.

Abhisit and his “Frankenstein Coalition” are going to (try) to rule the country at the precise moment when Thailand is entering in a… recession (or zero growth at the best).

Thaksin can smile like the Cheshire Cat, behind, even though he lost a battle : the Democrats are going to ridicule themselves on the economic front.

The timing couldn’t have been worse for their little political heist.


China is urging its troubled state-owned airlines to cancel or defer new aircraft purchases amid the global economic turmoil — a move that could hurt American and European aircraft makers.

Airlines are also being urged not to renew leases for aircraft rented from foreign firms and to ground or sell some planes, according to an announcement seen Wednesday on the Web site of industry regulator the Civil Aviation Administration of China.

Chinese carriers have been squeezed by high oil prices and falling passenger and cargo revenues. State-owned airlines had total losses of about 4.2 billion yuan ($615 million) in the first 10 months of this year, according to the government. (AP)

Cause and effect… Western companies suffer… Therefore China suffers (less exports)… Therefore other western companies suffer (China reduces its imports)… No escape. A country can not pretend to be “insulated” from the crisis. Thailand tried (among others). They are proved wrong.

15 Responses to “Game over for thai exports : chinese exports declined in november, first time in 7 years”

  1. 1 Bedwyr 10 December 2008 at 10:21 am

    Game over indeed. Still, it is comforting to know that the world-wide recession won’t touch Thailand. Thailand is ‘insulated. By HMK or some used tampons no doubt.

    In the meantime, this ought to help: From the Bangkok Post.

    Former prime minister Chavalit Yongchaiyudh left monkhood on Wednesday after he ordained at a temple in the northern province of Chiang Mai 20 days ago.

    Gen Chavalit said he is happy that the good deeds he has done could help solve national crisis.

    He also said he is willing to give advice in forming a new government to those who come to him.“.

    Yep, it’s true. To solve the political crisis, the succession crisis, the economic crisis, all that is required is to find some senile old fart who is delusional enough to think he still has some credibility, shave all his hair off, put him in a monk’s robe and sent the stupid old git off to contemplate his navel for a few weeks. After which, everyone can beat a path to his door to seek advice – for all the world like he wasn’t probably the most incompetent PM Thailand has ever seen.

    Yep, that ought to do it.

    Jesus Christ, God help us all.


  2. 2 ThaiCrisis 10 December 2008 at 10:24 am

    I couldn’t agree more with you about the Chavalit Benny Hill Circus… The guy just came out from his (spiritual) “retreat”… to offer his services to the new government ! Amazing indeed.

  3. 3 chinesethai 10 December 2008 at 10:58 am

    But there are conflicting reports too.

    While factories are closing…..

    Nike Thailand are hiring 1,000 more workers.

    Thailand’s Apparel Assoc said yesterday that the industry currently needs some 100,000 workers.

  4. 4 ThaiCrisis 10 December 2008 at 11:24 am

    The news about Nike doesn’t weight much in regard to the bad news from China.
    As for the estimations of the textile industry, again I would be cautious. They might rely on old sales projections. And here, old can mean… just one month. The situation is evolving very, very quickly.
    And many of those people were wrong, constantly, in their forecasts and projections. They are slow to react.

  5. 5 FDL 10 December 2008 at 11:30 am

    The Democrats steered Thailand out of the 1997 financial crisis and Thaksin took full credit because the Democrats was slow to stimulate the Thai economy. Maybe this time the Democrats have learned their lesson and would tear a page or two from Thaksin’s self-promotion tricks.

  6. 6 ThaiCrisis 10 December 2008 at 11:38 am

    Sure. Hence the “friendly advise” of Newin (“spoil Issan”)

    The problem is : we might have a scale difference… And a difference of nature.

    it was a good idea in 97 to “stimulate” the economy (and easy to do so).

    But 2008 seems (already) quite a different crisis. Look at the long list of countries already throwing money like there is no tomorrow in “plans”, “boost”, “stimulus”, “rescue packages” and other lunacies etc…

    For what result ? NIL.

    The crisis is deepening. It’s not news anymore : it’s Niagara Falls on a daily basis. It’s even difficult to follow… Just this morning, after the news about China, it came from France : industrial production felt again in october (-2.7 % compared to september !). From august to october, it’s a fall of 4,1 % compared to the same period 2007…

    It’s unprecedented… Since 1981… When they started to compile the stats…

    Have you noticed ? Every day now we get news with the word “unprecedented”… I think we should be humble and take this word… to the letter : AKA no link with the past. AKA : fasten your seatbelt. AKA we are in deep poo poo 😉

    Now, in Thailand, can we trust the Democrats to come with new and efficient tools to curb this crisis ? Here, I would certainly laugh. Loudly.

  7. 7 James 10 December 2008 at 12:50 pm

    Just before the Asian domino hits the dusty surface, watch as the wind kicks up dust. Next year is going to be ug-lee. No wonder investors are dumping all their money into U.S. bonds for zero interest, they have an idea of what the world will look like when Asia folds.

  8. 8 chinesethai 10 December 2008 at 1:31 pm

    I agree 50% with FDL and 50% with TC.

    In 1997, banks, businesses and middle class were overwhelmingly leveraged. Many of them later vanished. While the farmers had low debt load. We exported our way out of the crisis.

    In 2008, business owners and middle class who have survived the 1997 crisis hoard a lot of cash reserve for rainy days. (Again this is the same old Sufficiency Economy much derided by some western economists during the Sep 19 coup.) Despite having to endure some pains, they will ride out of crisis. While the lower middle class to the poor upcountry and in the city are loaded with piles of household debts as a result of Thaksinomics, which encouraged spending spree to create high GDP growth rate. Many of them have lost ties with their farm life.

    How could the Democrats, if their government is functional, fix the problem?

  9. 9 fall 10 December 2008 at 3:02 pm

    China is urging its troubled state-owned airlines to cancel or defer new aircraft purchases…
    Who say state-owned are only good for cesspool of corruption and nepotism, eh?
    Cant wait to see Thai Airways Q4 report this year…

    Let’s see if it would take a global recession for the Chinese to adjust their RMB…

  10. 10 chinesethai 11 December 2008 at 3:13 am

    I do not believe that the impact on China’s social stability will be as severe as most western analysts predict. Chinese migrants can still go back to plow their farms, which still belong to them. Life in the countryside does not recognize the difference between weekdays and weekend.

  11. 11 ray 11 December 2008 at 3:49 am

    i agree with ct in the ” sufficient economy”.. it is common sense. live with-in yr means. also u are right about the banks and middle class this time. they learnt from the fiasco of 1997. today or yesterday the banks announced they will cut lending rates by .5% but cut deposit rates by .75 to 1%..
    the textile/garment induastry in thailand is a sunset industry. all orders have been going to china for over 7 years now. even thai retailers are importing from china.

    if more countries in the west practised ” sufficient economy ” they would not be in this mess. also right now the savings in the western countries are at record lows and credit cards debt is record high. with unemployment rising at this rate next year the banks in usa will face credit card debt defaults which will make 700 billion bailout seem like peanuts.
    i live in samui and when tourism is down the people from isan go back home to do farming and in high season they come back. it works well for them, and i think next year the agriculture sector will keep thailand export figures respectable not automobiles,not garments,not jewellery and not even tourism.
    as for democrats coming in at this time i thinks its great. because as james said countries all over the world are throwing billions into the economy but to no avail. what the govt. needs to do is cut spending, no bailout for failed business, zero income taxes for people making less than 100,000 baht a month, pour money into the infrastructure and most importantly completely free education. the lowest tuition fees is atleat 30000 baht per year. thas a fortune for poor people. if they can save that money and spend else where that will stimulate the economy from the bottom up. and people in isaan( pro-thaksin) will fall in love with abisit.

  12. 12 ThaiCrisis 11 December 2008 at 6:46 am

    Ray,watch out with thoses grand ideas about agriculture.

    You can say that agriculture has the advantage to keep a large number of people occupied. But you certainly can’t say that agriculture is going to save thai exports.

    Check this chart….

    As for what should do the Democrats…
    -Income tax : already exempted until 150 000 THB per year.

    -Cut spendings : they won’t. They use exactly the same dictionary than TRT/PPP : “stimulus”. Unfortunatly, coffers are already empty (PPP did spend and did offer gifts) and the recession is coming (taxes collection are going down on the first 2 months of fiscal year, october and november).

    -Infrastructure : again, the text book. But again, show me the money… Since 2005, the bozos politicians are toying with “Mega Projects”… Started under Thaksin… 3 years already… And not much accomplished. Financing ? They have (apparently) a loan from the japanese. But absolutly not for the total amount.
    Peruse my special category :
    It’s astonishing…

    -Real free education : now that’s a key point. They all say that it’s a key point, but they do nothing about it. But the task is huge, scaled to the stakes.

  13. 13 chinesethai 11 December 2008 at 7:57 am


    “But you certainly can’t say that agriculture is going to save thai exports.”

    Noooooo, I believe Mr.Ray did not mean that agriculture is going to save Thai exports. In fact, nothing is going to save the exports because the demand is completely external. Usually, businesses will adapt themselves to the changing environment.

    What Mr.Ray means is probably for everyone from business to the grassroot not to depend too much on those greedy politicians’ populist programs, megaprojects, fiscal stimulus and the world markets. It is individual responsibility to balance individual income+savings with spending and investment. So if we have a great government or external markets performing well, that’s great. But if we have a bad and corrupt one or none at all (like today), then we are the survivors.

    For farmers, their priority is to save their farmland and keep it “sustainably” fertile and unpolluted. Then find a sustainable way to improve productivity.

    It’s impossible for individual to be 100% insulated from the crisis but it is possible to neutralize the impact in worst case scenario. It’s best to implement it on a sunshine day for the arrival of the rainy days.

    This is the key to “Sufficiency Economy” that has always been ridiculed by west-leaning economists for years as socialist, marxist, obstructing modernization etc.

  14. 14 ray 11 December 2008 at 12:13 pm

    tc, i dont mean agriculture will save thai exports but it will make up a bigger percentage.why? because when economy is in the dumps, tourism is down,and factories and service industries fire people the epople go back home to farming. nearly all taxi driver are from isaan and they will head back to the village.

    i think the exports in other sectors will fall more closer to 10%. i think this year already it is falling that much but the numbers coming out of the govt. say otherwise and i dont believe it.

    all the good things that has been happening to thailand over the past 4 years is not because of the politicians but INSPITE of them. so i believe the thai business sector is very very resilient. we had coup and since then we did not have a performing govt.

    as for thailand it has been surviving quite fine. now with low fuel prices now people all over the world and breathe a sigh of relief. but in 2009 i believe there will be hyper-inflation due to trillions of dollars various govts are throwing at the economy, and then all agriculture products prices will soar and i believe if we have an “ok” ( a good govt. will be asking too much)) govt we can take advantage of the situation.

    as for “sufficient economy” it is basically being fiscally conservative. its certainy not backward.socialist? look at usa. the govt now owns banks and now they will be running the auto business. so much for capitalism!!!

  15. 15 ray 11 December 2008 at 12:16 pm

    as for education. abisit will be education minister as well. so i do believe things in that sector will be better. when u listen to abisit he makes lots of sense and he is intelligent. no pie in the sky scheme.

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Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.

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