Thailand’s trade deficit with China rises 59.31% on import surge
A chamber survey highlights concern over imports outpacing exports and urges Chinese companies investing in Thailand to use more locally sourced raw materials and components.
- In the first seven months of 2026, Thailand's trade deficit with China widened by 59.31% to a total of $55.13 billion.
- The growing deficit was caused by a 38.49% surge in imports from China, which significantly outpaced the 9.17% growth in Thai exports to the country.
- A primary driver of the import increase was a sharp rise in electrical machinery and components, which grew by 83% and are used for investment and manufacturing goods for export.
- Businesses attribute the import surge to factors including China's excess production capacity making goods cheaper, geopolitical issues redirecting Chinese exports, and the need for machinery for growing Chinese investment in Thailand.
Narongsak Putthapornmongkol, president of the Thai-Chinese Chamber of Commerce, released the findings of the chamber’s confidence index survey for the fourth quarter of 2026. Conducted from August 18 to August 20, the survey covered 503 respondents and found that 46.2% expected Thailand’s economy to grow by 1.5-2% this year, while 37.8% forecast growth of 2-2.5%. The results pointed to an outlook below the government’s midpoint forecast of 2.2%.
The Office of the National Economic and Social Development Council (NESDC) reported that the Thai economy expanded by 1.9% in the second quarter of 2026, slowing from 2.8% in the same quarter a year earlier. Private investment across the technology, digital and new-industry sectors, together with exports of technology products and electronic components, were key drivers.
However, imports of equipment and components used to manufacture goods and support investment in digital industries increased sharply, leaving Thailand with a continuing trade deficit since the first quarter of this year.
In the first half of 2026, exports rose by 18%, but imports increased by 38%, leaving Thailand with a trade deficit of about 12 billion dollars. This compared with a surplus of 15.4 billion dollars in the same period of 2025. The deficit was attributed to higher transport and energy costs, imports of components used to manufacture export goods and imports supporting investment in digital industries.
However, 47.8% of respondents considered the widening deficit acceptable because the imports were intended for investment and the production of goods for export. Another 28.1% believed the deficit had risen to a worrying level.
Thailand-China trade exceeds 100 billion dollars in seven months
Narongsak said the trade deficit with China warranted close attention. Thailand-China trade was worth 108.804 billion dollars in the first seven months of 2026, up 29.89%. Thai exports to China reached 26.837 billion dollars, an increase of 9.17%, while imports from China rose by 38.49%. This left Thailand with a bilateral trade deficit of 55.13 billion dollars, up 59.31%. Imports of electrical machinery and components increased sharply to 19.373 billion dollars, around 83% higher than in the same period a year earlier.
The survey found that 27.4% of respondents attributed the increase in Chinese imports to China’s excess production capacity, which made its goods cheaper and better able to gain ground in the Thai market. Another 21.5% linked the rise to geopolitical issues between China and the United States, which led China to export more goods to Asian markets.
A further 18.5% believed that part of the increase in imports from China reflected the use of Thailand as a transit route to the United States, or transhipment. Meanwhile, 17.2% attributed it to growing Chinese investment in Thailand and the resulting need to import machinery and raw materials from China.
Businesses urge local-content requirements for Chinese investment
Narongsak said Chinese investment in Thailand was increasing, particularly in artificial intelligence, data centres and electric vehicles. Industries likely to attract more Chinese investment in the future included large-scale infrastructure construction, agriculture and food processing, digital services and clean energy.
However, businesses believed that promoting Chinese investment should generate more domestic value. They therefore prioritised a policy requiring Chinese companies investing in Thailand to increase their use of domestic raw materials and components, or local content.
This requirement was considered particularly important for the electric vehicle and electronics industries. It was given higher priority than combining Chinese technology with raw materials from Thailand’s agricultural sector or providing Thai SMEs with access to Chinese e-commerce platforms.
Survey shows 37% expect 33-35 million foreign arrivals
From the beginning of 2026 through the first week of August, Thailand received 19.2 million foreign tourists, against the full-year target of 35 million. The survey found that 37% expected the annual total to reach 33-35 million, while 28.4% expected it to remain below 33 million.
Domestic travel totalled 123.5 million person-trips, against the full-year target of 206 million. Of those surveyed, 37.1% considered the Thai Travel Plus measure fairly necessary to support the tourism sector, while 26.5% considered it essential because foreign tourist arrivals had yet to recover fully. The survey therefore concluded that about one-third of businesses regarded the measure as necessary to provide short-term economic support as foreign tourist numbers slowed.
AI, digital economy and new industries key to long-term growth
For longer-term growth, Narongsak said government policy focused on investment in five areas: industrial upgrading and new investment; artificial intelligence and the digital economy; the transition to a green economy; developing Thailand into a regional financial services hub; and strengthening the country as a base for advanced medical manufacturing and innovation.
When respondents were asked to select two priorities considered necessary for Thailand’s long-term economic development and which should be achieved within three years, they chose artificial intelligence and the digital economy, along with industrial upgrading and new investment, as the two most important areas.
At the same time, Chinese investment remained an important opportunity for Thailand, but businesses wanted the government to set conditions ensuring that it generated more domestic value, particularly through greater local content in the electric vehicle and electronics industries. They also wanted this approach to be accompanied by faster development of artificial intelligence, the digital economy and new industries to strengthen Thailand’s long-term economic potential.
“Overall, the survey reflects continuing concern among Thai-Chinese businesses about Thailand’s economic growth in 2026, particularly pressure from imports expanding faster than exports and the trade deficit with China continuing to widen,” Narongsak said.
