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1 Mar 2011

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Higher Commodity Prices: Supporting Thailand-China Trade in 2011 (Business Brief No.3053)

It is expected that the recent upswing in commodity prices, buoyed by a weak USD, as well as falling crop production globally due to erratic weather conditions and exorbitant crude oil prices (that have underscored the importance of alternative energy sources) may help bolster major Thai exports to China in 2011.
Among the major export categories sent to China are cassava products, rubber and related items. The ASEAN-China Free Trade Agreement (ACFTA), which facilitates imports and exports of 90 percent of all the products we trade with China by allowing duty-free status on them since January 1, 2010, will be a key factor helping to bolster Thai exports to China this year. Although China has revised downward their GDP growth target to 7 percent for the 2011-2015 period, from the 7.5 percent growth achieved during 2006-2010, it is expected that China's economy will continue to surge forward in 2011 with a growth rate exceeding their 7 percent target despite weak demand in the G-3 economies (US, EU and Japan) due high unemployment rates.
Given this, KResearch expects that Thailand's exports to China in 2011 may see 10-15 percent growth YoY, while our imports from China may grow 12-15 percent YoY.

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