Must-see : Why Thailand could make a mistake by betting on China

The recovery. A big word in Asia… When the US and Europe are walking like old men… Asia seems to be ahead.

Look at exports figures from Thailand : recovery indeed ! But thanks to only one factor : China.

China displays arrogant GDP growth figures… There is a sense of optimism when you listen to the thai government. Afterall, it’s intellectually comfortable. Let Big Brother pulls the whole region ! The differences of scale are so huge than Thailand can only profit from China’s growth…

The Prime Minister is not afraid to pull out of his hat nice GDP growth forecasts :

The Thai economy may expand by as much as 4.7% this year as exports, tourism and private investment have shown clear signs of steady recovery over the past three or four months, says Prime Minister Abhisit Vejjajiva. (Bangkok Post)

Optimism, or wishful thinking  ? Why we should worry ?

Well. First because oil consumption doesn’t really reflect such optimism. And make no mistake there is no Green Economy whatsoever in Thailand.

GDP growth in Thailand is directly correlated to oil, gasoline, diesel fuel consumption.

Second, because of China. If you bet your arse on one country, then the least you can do is to try assessing the situation in this country.

And that’s precisely what the thai leaders don’t do. Or are afraid to do.

It’s easy to find several red alarms about the state of the chinese economy. People start to talk about credit bubble with frightening figures about lending, about real estate bubble with insane prices (compared to incomes) and empty cities, shopping malls etc.

But for us China seems so far away… And we shall never repeat enough this truth : China is absolutely not a “normal” country, a partner within the WTO for instance, a fair player, a democracy in the western sense…

Here is a must see work. A slideshow made by a portfolio manager.


20 slides, not 200 pages, that cover a wide array of issues. And that will give you a sense  of… emergency.

If China goes down, the consequences are crystal clear : Thailand will fall too.

Now, you can pray.

3 Responses to “Must-see : Why Thailand could make a mistake by betting on China”

  1. 1 Pricilla 14 February 2010 at 8:25 pm

    Agree, betting on China alone is not a well thought out long term strategy. Australia is also doing the same thing, the correlations are interesting, two inept governments with no plan for the future bar accumulating debt, both hoping the Chinese growth will continue so as to claim good economic management from any positive GDP numbers.

    Both should be happy to cash in when it is there, however if China goes down then so do they. Idiots with no economic credentials pandering to interest groups with no idea where to position themselves for the future.

    Thailand of course is like the whimp in the schoolyard, just makes friends with who ever seems the biggest, future military ties will operate the same way. The US and Europe will remain basket cases until reform and debt reduction is forced upon them, but again too many greedy interest groups used to sucking the public teat resisting the needed pain.

  2. 2 whoopla 15 February 2010 at 4:40 am

    I thought the Black Swan had visited us already. Now we have her mother coming to stay?

  3. 3 Pricilla 15 February 2010 at 5:49 pm

    Whoopla, you may well be right about those green shoots and happy days ahead and I may well be proven full of it. There are no certainties. only opinions and educated guesses until time runs its course. By the way I don’t have bunker in Arizona stocked with ammo and canned food!

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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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