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Mr. Poonpong Naiyanapakorn, Director-General of the Thai Trade Strategy and Policy Office (TPSO), stated that the economic downturn in China is affecting the Thai economy, particularly tourism. The Thai tourism industry is impacted because Chinese tourists account for approximately 28% of the country's total international visitors. In 2019, 11.1 million Chinese tourists visited Thailand, generating 530 billion baht in revenue. However, in the first half of 2023, only 1.4 million Chinese tourists visited Thailand, indicating a significant decline, according to the Bangkok Post.
Previously, the number of Chinese tourists visiting Thailand was predicted to increase rapidly after the country reopened. However, this growth has not materialized as China is currently struggling with economic problems...
Chinese tourists in traditional Thai attire pose for photos at Wat Arun temple.
According to the Tourism Authority of Thailand (TAT), the Chinese tourist market to Thailand is relatively slow, making it difficult to achieve the target of 5 million visitors this year, even though the figure has been reduced from the 7 million target set at the beginning of the year.
Sisadiwat Cheewarattanaporn, President of the Travel Agents Association of Thailand (ATTA), said the tourism industry is preparing an urgent proposal to the government. This proposal includes waiving visa fees for Chinese tourists for a period of three months.
This proposal is the result of comparing the competition in the Chinese tourism market with countries like Thailand and Malaysia, where visa processing takes only 1-3 days and costs 200 yuan per application. As a result, Chinese tour groups have changed their plans and are now visiting Malaysia instead of Thailand, according to Khaosod.
Mr. Sisadiwat believes that the market for Chinese group tourists is expected to gradually recover if Thailand adjusts its policies in a timely manner, possibly by 2024. TAT has set a target of attracting 7-8 million Chinese tourists and a total of 25.8 million foreign tourists this year.
However, Thailand may not achieve its target amid lower-than-expected numbers of tourists from China. On Bloomberg, RHB Bank's senior economist Barnabas Gan noted that the number of Chinese tourists to Thailand in 2023 could fall slightly below 5 million, less than the 7 million the Thai government had hoped for.
He believes that the slowdown in China's economy in the second half of 2023 will reduce demand for outbound tourism.
Tourists visit the floating market in Damnoen Saduak.
According to Thailand's Ministry of Commerce, tourism and exports of chemical products and plastic resins are expected to decline due to the slowdown in the Chinese economy. The liquidity crisis in China's real estate sector is a major concern for the economy, hindering its recovery after Beijing lifted strict measures to control the spread of Covid-19.
Real estate companies in China primarily rely on large amounts of borrowed capital to finance massive projects, creating a risk of a real estate bubble.
Given the enormous scale of the real estate sector, which contributes approximately 29% of China's GDP, its troubles will have far-reaching consequences for the country's economy. In the second quarter of this year, the economy only grew by 0.8% compared to the first quarter.
This has impacted people's finances, as approximately 70% of urban residents invest in real estate for income and investment purposes. The sharp drop in property prices has resulted in significant financial losses. The decline in real estate prices has also affected the labor market, as the construction industry provides over 62 million primary jobs...
