CHINA’S THREAT TO THE ELECTRONIC INDUSTRY
CHINA’S THREAT TO THE ELECTRONIC INDUSTRY
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Certainly the Chinese are making an increasingly large share of the world’s electronics. Last year the Chinese produced about 110 billion US dollars worth of electronics goods, almost the same size as the entire Thai GDP. Compare that to 4 years ago, when Chinese production was only 37 billion dollars worth. This amazing increase in production (32 percent per year) is thought to endanger China’s direct competitors in Thailand, Malaysia and the Philippines. Exports from China have been increasing at the same lightning pace. Export growth in the 1990s has been averaging 25 percent a year, 2.5 times the world average. (The Thai average: 12 percent since 1994.)
FORECAST FOR THIS YEAR
Due to a slowdown in the electronics industry worldwide, current estimates are for electronics exports from China to increase by only 15 percent this year, while Thai electronics imports are thought likely to increase by 10 percent (BOT estimate), still benefiting from the cheaper baht. The demand for electronics components worldwide is thought to be nearly flat for at least the first half of this year, possibly expanding in the second half, according to predictions from World Semiconductor Trade Statistics, Inc., so local export predictions may still be optimistic. (Last year, Thailand experienced 15-20% export growth for electronics, while the world market for electronics components increased by about 35 percent)
ELECTRONICS ARE THAILAND’S MOST IMPORTANT EXPORT
Electronics are by far Thailand’s biggest export item making up a estimated 30 percent of total exports in 2000. Other ASEAN countries owe an even greater share of their exports to electronics – over 60 percent for countries such as the Philippines and Malaysia – and shocks to their economies will have knock-on effects on ours. But is China really so much better a place to build a computer?
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