China trade may end the regional crisis blues

China trade may end the regional crisis blues

By Edward Neilan

BANGKOK (JP): China trade may be the engine of recovery for
Southeast Asia's devastated economies, still reeling from what
they see as Western-imposed globalization formulas.

Start with Thailand. The population here has eased over 60
million in the last year. Many new workers are involved in making
low-end electrical items, computers and related parts.

The housing industry in China is immense and expanding with a
scarcity of middle-income housing. Since urban incomes in China
have been growing at about 20 percent annually since 1990, it
means there is a demand for household furnishings which domestic
production cannot satisfy.

Yit-fan Wong, chief economist for Southeast Asia of Standard-
Chartered Bank, says Thailand will benefit from China's need to
furnish new homes with imports of Thai electrical appliances.

China produces all such items but supply is uneven.

"For example, within the electrical appliances category there
is an over-supply washing machines but not air conditioners.
Washing machine parts may be available locally but a critical
motor part has to be imported."

Wong says these "gaps and nitches" also exist in computer-
related products.

Last year Thailand's largest sales to China were agricultural
products such as rubber, rice and shrimp. sold through Chinatown
as they have been for hundreds of years. The volume of these
exports is increasing.

In 1958, when a boy reporter from Los Angeles first visited
Bangkok, the bistro Chez Eve on Chinatown's New Road (it was
"new" in 1858) was said to be the only air conditioned night club
within 1,000 miles.

And it boasted the best hamburgers between Hong Kong and
Singapore. So much for Western cultural commentary on a part of
Bangkok that abuts the Royal Palace in all of its grandeur.

Besides agricultural products, the wise men of Chinatown have
led development of mechanized agricultural equipment, which has a
growing market in China.

The Bangkok Chinatown link to Silicon Valley is strong, with
computers and parts comprising the second largest export sector
to China last year.

It is not unusual to see a bright young Stanford or San Jose
State graduate working in the head office of a Chinatown computer
assembly factory.

Programming in Chinese is another promising field.

Thailand's petrochemicals are suffering from a severe glut in
the region but again China may come to the rescue. China has cut
back its own expansion plans for petrochemicals, having found it
is cheaper to import.

Finally, Thailand's automobile industry may not export a lot
of cars to China but it should still benefit from exporting auto
parts, according to Wong.

If one of the main stories I encountered here was the
expectations of China as a market for Thai products -- including
Thai-made Japanese products -- the other is the depth of
resentment against the West for its "help" in solving the so-
called "Asian financial crisis."

Handing over Thailand's sovereignty will not solve the present
crisis says Amarin Khoman, president of the Thai Star Group of
Companies.

"We cannot afford the luxury of slavishly following disastrous
doctrines which only serve the interests of foreign creditors and
speculators, who take without giving," Khoman said. "There has to
be an alternative to the current evils of market-driven
globalized doctrines that reward only the creditors at the
expense of debtors and innocents alike."

He is one of a number of businessmen who feel strongly that
the International Monetary Fund's (IMF) admission that it made
"mistakes" in proposing and overseeing draconian economic
prescriptions have hardly been comforting to Thailand.

Khoman does more than point his finger at outsiders. "We must
conscientiously adopt the rule of law and enforce it. We must
seriously fight corruption and the increasing narcotics problem
by providing the necessary funding and legal clout to the
concerned agencies."

Khoman and others worry that unless the country addresses the
issues concerning farmers and the rural poor, there is the risk
of alienating the entire population and accelerating social
upheaval.

The writer is a Tokyo-based analyst of Northeast Asian affairs
and a media fellow at the Hoover Institution, Stanford
University.