Amporn Swatsuk owns a "Tubtim Siam" pomelo farm in southern Nakhon Si Thammarat province that has been hobbled by the protracted Covid-19 outbreak. For more than two years, the amount of fruit exported from the farm with geographical indication certification has dipped significantly.
"Prior to the pandemic, we regularly exported a large volume of our produce. There were times when we even ran out of stock because of strong demand," Mrs Amporn told the Bangkok Post.
The Swatsuk farm used to export an average of 3,000-4,000 pomelos per shipment to its foreign partners, Chinese middlemen who mainly sent their products to Hong Kong and mainland China. The volume has plunged to 300-500 pomelos per shipment during the Covid-19 outbreaks.
"Our revenue dropped 60% during that period," said Pranam Swatsuk, co-owner of the farm.
As of January, the farm has so far exported one shipment of 600-700 pomelos as revenue recovered by only 10% ever since the pandemic. "Currently we earn mainly from domestic sales, not exports," she said.
The outlook for exports does not look promising this year, said SCB Economic Intelligence Centre (EIC), citing the slowdown in the global economy amid increasing uncertainties, namely newly imposed trade tariffs from key trading partners such as Europe and India.
"An increase in hotel room rates should be expected after China announced the border reopening." — Thanet Lertchittikhun, Heir, Chiang Mai hotel
SCB EIC expects the value of exports to expand by only 1.2% this year.
For shipments to China, the road ahead appears rocky as experts predict that the Chinese economy would see slow growth in the coming years.
A report by Atradius, an Amsterdam-based credit insurance company, indicated China's GDP growth has been slowing since 2011. From an average of 7.9% between 2011 and 2015, growth dipped to 5.7% in the following five years.
During 2021 to 2025, the average growth of Chinese GDP is put at 5% and is projected to decline further to 4% by 2030 after which economic growth would become even more sluggish.
The decline in the Chinese economy over the past two years has been largely attributed to the pandemic and the enforcement of Beijing's zero-Covid policy, the study noted. Compared to other countries in East and Southeast Asia, China's growth lagged behind in 2022 due to stringent Covid measures.
Although the Chinese government has recently lifted travel restrictions, economic activities may not fully recover during the first phase of the policy relaxation. Atradius expects new infections in China to rise sharply, especially in the first quarter, causing short-term negative impact on confidence and consumer spending.
Amporn Swatsuk, owner of 'Tubtim Siam' pomelo farm in Nakhon Si Thammarat province.
According to Kasikorn Research Center (K-Research), China's GDP is expected to expand by 4.4% in 2023, which is lower than the pre-pandemic level. Factors such as the real estate crisis will continue to put downward pressure on the growth.
Home prices in China have dropped continuously. As of December last year, real estate prices contracted by 1.5% from 2021.
Chinese real estate firms currently have outstanding debts of US$238 billion, accounting for 0.8% of GDP, owed to both domestic and international debtors. The figure, despite being lower than in 2022, remains at a high level.
The beleaguered sector will continue to be a major risk factor affecting consumer confidence and spending, as more than 70% of Chinese households have accumulated wealth in the form of investment in real estate, according to K-Research.
In the long term, an ageing population, a human capital mismatch and low productivity growth, aggravated by measures to control private business are among the factors that have impacted China's GDP growth, according to the report by Atradius.
However, the reopening of China's borders will help boost the economy, with the recovery expecting to begin from the second quarter as private consumption will start picking up.
SCB EIC targets Thailand to welcome at least 4 million Chinese tourists this year after Beijing recently eased its zero-Covid policy.
Thanet Lertchittikhun, an heir of a Chiang Mai-based hotel, said an increase in hotel room rates should be expected after China announced the border reopening.
"Revenue, which dropped to only 10% during the Covid-19 outbreak, began to improve only recently. Most customers staying at the hotel are foreigners," Mr Thanet revealed.
According to Trip.com, Thailand is among the top five destinations among Chinese tourists. The increase in tourism revenue and private consumption would help the Thai economy to expand by 3.4% this year, said SCB EIC.
