It is worth looking forward to whether the textile and clothing industry can use Thailand to seize the ASEAN market share.

The textile and garment industry is one of Thailand’s export-oriented industries, covering all aspects of the entire industrial chain from fiber to garment production. Starting from the end of 2013, political problems began to appear in Thailand. The Thai Institute of Industry believes that the political situation The persistence of the problem has slowed down domestic consumption in Thailand, and small and medium-sized enterprises have encountered a lack of liquidity in their operations. In 2013, the production of Thai apparel, ready-made clothing, footwear, textiles, household goods and other enterprises decreased significantly. ​​
Thailand is one of the ASEAN members. 2015 is the deadline for ASEAN leaders to decide to establish the ASEAN Community. This decision seems to send a positive signal of development to Thailand, which has a superior central location among all ASEAN countries. In addition to its geographical advantages, Thailand also has a series of advantages such as logistics hub advantages, high degree of business freedom, and high degree of internationalization. Companies from various countries have focused on Thailand as a perfect springboard to enter the entire ASEAN region.
In recent years, with the China-ASEAN Free Trade Area fully launching zero tariffs on most products, China’s product exports to Thailand have continued to increase and have continued to seize Thailand’s market share in ASEAN. Therefore, whether Thailand’s textile industry can seize the opportunity established by the ASEAN Community It seems that the industry is looking forward to the opportunity to develop vigorously, or whether my country’s textile companies can use Thailand as a springboard to seize the ASEAN market share.
The Thai government helps companies expand trade
There are 4,500 textile and garment factories in Thailand, employing more than 1 million people, accounting for nearly 20% of the total manufacturing employment. The total GDP accounts for 17% of the entire Thailand, and the annual textile and garment export volume reaches more than 6 billion US dollars. , is Thailand’s second largest export industry. Thailand’s labor force has implemented a standard minimum daily wage policy of 300 baht per day, and labor-intensive industrial factories have accelerated their transfer to neighboring countries, resulting in a decrease in the number of new factories in industries such as textiles and apparel. Nataporn, Director of Thailand’s Factory Department, said that the reduction in production capacity of the original textile factories, coupled with the reduction in new factories, confirms the prospects for the decline in the development of the textile industry. In addition, the number of new factories for leather, household products, and chemical products is also declining.
In the first half of this year, the world economy gradually recovered, which also injected growth momentum into the development of Thailand’s textile and apparel industry. Luang Kameng, deputy director of the Foreign Trade Promotion Department of the Ministry of Industry of Thailand, revealed that clothing will be one of the important industries with strong growth in Thailand this year. Thailand’s large clothing companies have moved factories to neighboring countries to reduce labor costs and protect market share. It is estimated that this year will be a golden year for Thailand’s export clothing, with export value expected to grow by 5%. In addition, in May this year, the Thai government plans to set up a special fund with a minimum amount of 1 billion baht to help small and medium-sized enterprises that have begun to take shape to expand their trade scale in neighboring countries and strengthen their competitiveness in the advent of ASEAN economic integration. , including Thai operators with rich experience and a certain scale in the textile, clothing, leather and shoe industries. Chakdi Chakodi, deputy director of the Thailand Investment Promotion Board, said: “We hope to help small and medium-sized enterprises penetrate into the ASEAN market including Cambodia, Laos, Myanmar, Vietnam and Indonesia. Because these countries not only have low-cost labor resources , a huge market, and also enjoys the Generalized System of Preferences tariff.” Moreover, he said that Thailand will pay attention to the entire ASEAN market, because ASEAN is a large market with 600 million people. The ASEAN Economic Community will become a shortcut for Thailand to expand its business in the near future.
​Thai businesses are not ready yet
Although the Thai government and related associations have made continuous efforts to promote the development of small and medium-sized enterprises in Thailand, seize the opportunity of the establishment of the ASEAN Community next year, and expand overseas trade, however, Atta, director of the International Trade Research Center of the University of Thailand Chamber of Commerce, said that according to recent According to a survey by , about 63.1% of 512,000 small and medium-sized manufacturers and exporters expect that they will not have time to adjust for the arrival of the ASEAN Economic Community, which means they may miss out on fierce competition from neighboring countries Chance.
The survey is titled “How Thai Exporters and Manufacturers Adjust to the ASEAN Economic Community”. The survey targets include 1,000 Thai exporters and manufacturers that produce 19 products including textiles and clothing. And in last year’s survey, about 43.7% of small and medium-sized enterprises and exporters had not made any preparations for the upcoming ASEAN Economic Community, while 42.2% of enterprises indicated that they were still in the process of adjustment. 53% of businesses pointed out that they lack knowledge about ASEAN Economic Community trade agreements and market access. He called on the government to set up an agency to help small and medium-sized enterprises invest overseas, establish Thai product distribution centers and Thai manufacturing associations in neighboring countries, build a distribution network for Thai products, and encourage small and medium-sized enterprises to produce or establish distribution bases in neighboring countries.
Chinese enterprises must improve their competitiveness to seize the market
In recent years, trade exchanges between China and Thailand have become increasingly frequent. Data from the Economic and Commercial Counselor’s Office of the Chinese Ambassador to Thailand show that in 2013, the total trade value between Thailand and China reached US$64.965 billion, accounting for 13.6% of Thailand’s total trade value, boosting China’s For the first time, it surpassed Japan to become Thailand’s largest trading partner. Especially after the China-ASEAN Free Trade Area fully launched zero tariffs on most products, Chinese products took this opportunity to quickly flood into the Thai market.In 2014, the average growth rate of Thailand’s total import value from China was as high as 22.9%. Many Chinese companies are also optimistic about their development in Thailand. For example, at the end of 2013, the Thailand Industrial Park Management Committee planned to establish a special small and medium-sized enterprise industrial park to support the growth of small and medium-sized enterprises and promote the investment of small and medium-sized enterprises in neighboring countries such as Indonesia, Vietnam, Myanmar, etc. . Chinese investors believe that Thailand is very suitable as a base for export products, and Chinese companies can take this opportunity to “take the curve” to enter Southeast Asian and South Asian countries, so that their products and services can have a broader market.
In addition, it is understood that in the ASEAN market, Chinese products have seized part of the market share of Thai products, and some foreign investors have transferred their production bases in Thailand to other ASEAN countries, which will bring greater benefits to Thai operators targeting ASEAN markets. challenges. The entry of Chinese products has led to increased competition, especially for China’s products that can meet the urbanization needs of ASEAN countries, including electronic products, textiles and clothing, etc. Thailand’s similar products may lose their price advantage.
So, what problems will China face when expanding its exports of textiles to Thailand and ASEAN? Zhao Shulan, an associate researcher at the Yunnan Academy of Social Sciences, said in an interview with reporters: “Thailand is a country with relatively good economic development in the ASEAN region. If Chinese companies can successfully enter the Thai market, it will definitely provide useful reference for entering the markets of other ASEAN countries.” Zhao Shulan He said that Thailand’s textile industry has certain development advantages. For example, Thailand’s textile industry has formed a large-scale supply chain model, and the quality and added value of textile products have greater room for expansion. In order to improve the competitiveness of its own textiles, the Thai government has facilitated the expansion of Thai textile exports in terms of market environment and policies. At the same time, Thailand’s textile industry also faces many challenges. For example, Thailand’s supply of textile raw materials is mainly imported, which has become a restriction for its future textile development; the rise in labor costs has also brought challenges to Thailand’s textiles; the appreciation of the Thai baht will also affect product competition. force. “Taking the opportunity of the establishment of the ASEAN Community, the biggest problem that my country’s textiles will encounter in expanding exports to the Thai market and the ASEAN market may be the competitiveness of its own products.” Zhao Shulan said.