BANGKOK, Jan 12 — Thai authorities are closely monitoring trade between China and Thailand following a sharp fall in global oil prices. China has increased its oil consumption tax to prevent over-supply of certain products, said Nuntawan Sakuntanaga, director-general of the International Trade Promotion Department.
She said Beijing has released a report on the effects on trade after the decline in global oil prices which pose both advantages and disadvantages.
Advantages include lower production and logistics costs, stimulating spending and household consumption, and benefiting China’s auto industry, according to the report.
On negative side, Thailand must monitor closely key Thai exports related to oil such as chemical products, plastic resins and tourism which could be affected indirectly as when revenue earned by oil exporting countries falls, forcing a declining demand for goods and travel, said Ms Nuntawan.
She said production costs and import costs which are projected to decline would help lower inflation, enabling consumers to have more money and also more purchasing power.
But manufacturing firms which benefit prices might produce goods much more than the demand causing volatility in goods prices.
Realising the impact which might occur, the Chinese government has lowered the oil consumption tax, she said.
The decline in global oil prices would impact Chinese economic development in the long-term, especially those supporting alternative energy development and are friendly to the environment, said Ms Nuntawan.
Businesses related to oil processing in China would also be affected as they would see lower revenues, she said, adding that China will have to try to prevent entrepreneurs from relocating production bases and implementing policy for a new form of alternative energy for use in the future. (MCOT online news)
