Wednesday, December 17, 2008

China dumping a new concern

Electrical producers seek safeguards

The electronics and electrical industry is worried about a new side-effect of the global recession: the possible dumping into Thailand of cheap goods from China.

Executives say that Chinese producers will need to find somewhere else to drain out excess inventories as demand slows in importing countries.

''Actually, our domestic market trend is on the decline, but our market's protection may be relatively poor compared to other countries, so we have potential to be a target for their low-quality stockpiles,'' said Katiya Greigarn, chairman of the Electrical, Electronics and Allied Industry Club of the Federation of Thai Industries.

Given the poor economic and business climate both at home and abroad, he said, Thai trade regulators needed to speed up measures to block the influx of cheap goods from overseas.

''When the export markets are all sinking, we need domestic sales to help absorb our production output and continue operating,'' said Mr Katiya.

The global economic crisis has already affected the industry as its exports this year are estimated to have grown by 5-6% to 1.6 trillion baht, lower than the target of 1.65 trillion or 10% growth set earlier.

Mr Katiya also said that electronics import growth this year had outpaced exports, with a value expected to reach 1.2 trillion baht, up 10% from last year.

Next year, the sector projects zero growth in shipments. More than 90% of Thai electronic goods are exported.

He said hard-disk drive shipments, integrated circuits (IC) and telecommunication product parts would continue to perform well next year, but some sectors such as household appliances and parts would do poorly.

He pointed out the market for Thail producers this year had changed a lot as Asean and Chinese markets have emerged as the main clients, ahead of the US, Europe and Japan.

As well, price-cutting will definitely be seen in the year to come. Therefore, Mr Katiya advised business operators to be prepared to adjust strategies and manage inventory better.

Amid all the bad news, the industry still sees some upside as the stronger yen against the dollar and euro in recent months would help make Thailand's investment costs more attractive, while Thai exports will have more competitive prices over Japanese's goods.

Kanit Muangkrachang, the vice-president of Thai Toshiba Electric Industries, agreed with concerns over dumping of Chinese goods, saying the government needed to introduce measures to control them.

No comments: