The Bank of Thailand (BoT) is supporting the idea that Thai businesses trade with China in China’s currency, the yuan, as it could help them lowering these forex risks and simultaneously assist them in expanding their business, according to Chantavarn Sucharitakul, assistant to the BoT governor.
Ms Chantawan told participants at a Bangkok seminar that the BoT has persuaded the Thai private sector to increase its trade and investment with China in the yuan currency following encouragement from Beijing.
While there might be “some limitations” in the beginning, the large size of China’s economy and international trade along with support given by financial institutions, the use of the yuan could help lower costs and at the same time reducing forex risks, she said.
Currently, bilateral trade between China and Thailand amounts to 14 per cent of Thailand’s total exports, and China is Thailand’s number one trading partner.
Meanwhile, Richard Duncan, chief economist at Singapore’s Blackhorse Asset Management, a seminar participant, told journalists that implementing the ASEAN Economic Community (AEC), scheduled for the end of 2015, would help the bargaining power of ASEAN members.
Intra-ASEAN trade and investment could grow further and help ease the impact of a sluggish global economy, said Mr Duncan, adding that it is projected that the world economy would remain in recession for another one or two years.
China’s economy has been the major driving force for Asian economy in the past, but it probably would take some time for its economy to help global economy to get out of recession, Mr Duncan added.