New Chinese mall a threat: Thai traders

[Admin]

New Chinese mall a threat: Thai traders 
Bangkok Post: 20 Jan 2011
Chinese mall 'a threat'
Small firms and markets challenged

The entry of a Chinese mega-mall has raised huge concerns that cheaper goods and strong financial support from China will hurt small Thai businesses throughout the supply chain from manufacturing to wholesale centres and community shops.

China City Complex, a 45-billion-baht investment by the Yunnan-based state enterprise Ashima Yunnan Cultural Industry Group, was launched with great fanfare on Tuesday. It will include Thai-China International Products City, Thailand's biggest wholesale centre for consumer and lifestyle goods, with 2 million square metres of retail space on Bang Na-Trat Road. Its first phase will open in October next year.

A huge influx of cheaper Chinese goods could defeat local producers, especially Thai SMEs with weak financial status, said Manapol Poosomboon, a vice-chairman of the Federation of Thai Industries.

"Chinese manufacturers have large economies of scale of their production and thus lower production costs per unit than Thai small enterprises," he said.

As well, he said, the Thai government lacked effective measures to control the quality of imported goods.

Thailand has no permanent distribution centre for local SME products on the scale of the Thai-China International Products City.

"I am afraid that cheaper Chinese products will be legally imported to Thailand once the Bang Na centre is opened, together with Chinese sellers. Currently, Chinese imports are brought in by Thai traders," he said. "This will definitely allow them to gain a higher market share in domestic market."

There is also no guarantee that the Chinese developer would offer cheaper space for Thai enterprises as it promised on Tuesday, and conditions for selecting Thai vendors were not clear, said Mr Manapol.

"This is definitely going to be another disaster for Thai retailers which have suffered from a large invasion of western retail giants like Tesco Lotus," he said.

Suchai Pornsirikul, chairman of the Thai Textile Merchants Association, added: "We don't mind foreign investment, but more study is needed to measure its actual benefits to local businesses, consumers and the country.

"Worse prospects are anticipated if [Chinese traders] are allowed to import products and use Thailand as a distribution centre without proper inspection. Thailand's image could be hurt."

Mr Suchai's association dates back to 1961 when it was founded by a group of traders at the Sampheng wholesale market in Bangkok.

The Thai Textile Industry Federation, which represents seven textile and garment industries, will meet today to discuss the impact of the project.

An industry source said there was a report that the Indonesian government had turned down a similar proposal by Ashima Yunnan Cultural Industry Group, which resulted in the Chinese investor shifting to Thailand.

Vallop Vitanakorn, vice-chairman of an FTI committee on industrial development, forecast an immediate impact on the Thai garment sector since local producers would rather source Chinese materials.

However, the impact could be much broader and cover a whole range of consumer products including gifts, household items, electrical appliances, leather, footwear and food.

Local products with established brands will also face competition from Chinese brands.

"Given Chinese marketing techniques, I would question our ability to compete within the next three to five years," said Mr Vallop.

But the export sector could see some upside as producers would have a wider range of materials.

Jirabool Vittayasing, secretary-general of the Thai Lifestyle Products Federation, expects the Chinese complex will dominate the domestic market.

"Many shoppers would turn away from local wholesale centres such as Platinum, Sampheng or Baiyoke, but would rather go to the new mall to hunt for cheaper goods, and then Thai wholesalers will be hurt and die off," he said.As well, lifestyle products could be copied more quickly, posing a further threat, he said.

Mr Jirabool urged the government to consider some non-tariff barrier measures to help protect local industries. And if some Chinese products from the distribution centre are sold locally, they should pay taxes just as Thai products do.

http://www.bangkokpost.com/business/marketing/217254/chinese-mall-a-threat

[redrover]

They need to get over it, as the Chinese run the world now.

[Admin]

China Trade Complex Feared to Hurt Thai Businesses
Tan Network 2011-03-28

The Federation of Thai Industries and the National Human Rights Commission believe small and medium enterprises will be adversely affected by the development of the China City Complex project in Bangkok.

The Federation of Thai Industries, the National Human Rights Commission, and the National Economic and Social Advisory Council held a seminar on the impact of the opening of the China City Complex on Thai SMEs.

The project is currently under construction on Bang Na-Trad Road in Bangkok.

Vice chairman of the Federation of Thai Industries, or FTI, Tharit Sorat said the development of China City Complex project should be supported if Thai operators are allowed to sell or distribute Thai products there.

He is against the idea that the complex will be used solely as an export hub for China.

Tharit further said that the opening of the complex could badly affect Thai manufacturers of furniture, leather, fashion goods, gifts, souvenirs, household products and shoes as well as Thai logistics operators and those who import goods from China.

The FTI vice chairman questioned the government's strong support for the project when it could hurt Thai trade.

He called on the government to help Thai businesses deal with any repercussion if a large influx of foreign capital pushes the Thai baht higher.

President of Thailand Trade Representatives, Kiat Sitthiamorn, however, asked Thai businesses not to worry about foreign investments coming in from China, assuring that the government has clear-cut rules to protect Thai businesses.

Meanwhile, chairperson of the National Human Rights Commission, Ummara Pongsapit, said China City Complex will enable more low-cost Chinese products to enter the Thai market.

This means a number of Thai companies could be forced out of business, leading to massive unemployment.

She suggested a public hearing be conducted before the project goes ahead.

In response to global concerns over food safety and contamination, the FTI vice chairman called on the Food and Drug Administration, the Thai Industrial Standards Institute, the Immigration Bureau and the Customs Department to strictly inspect imported products to ensure their safety standards.

[nookiebear]

Fair competition is good for the consumer