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Bangkok (People's Daily) - Thailand's Office of Small and Medium Enterprises Promotion (OSMEP) has recently signed an MOU with the Bank of China (BOCT) to provide benefits for Thai SMEs who are the members of OSMEP.
The cooperation aims to sharpen the competitive edge for Thai SMEs penetrating the Chinese market, and to foster collaborations in all aspects including business matching activities between Thai-Chinese entrepreneurs.
Dr. Veerapong Malai, director general of the OSMEP revealed that though the situation of COVID-19 in Thailand is under control, the challenges are still very much present. The country is now facing an economic downturn resulting from the coronavirus outbreak.
It is expected that the economy is likely to gradually recover only in the second half of 2020, where stimulus packages from the government and the increased consumption in the private sector have played a vital factor in this recovery.
Thailand is set to welcome some tourists in October this year. Nonetheless, the economy of the Micro, Small and Medium-sized Enterprises (MSME) is expected to drop significantly compared to the previous estimate from the OSMEP's GDP.
The forecast, which is calculated by the MSME IO Table and Macro Model, is anticipated to shrink 9.5 percent from the previous 7.858 trillion-baht estimation to 7.113 trillion baht, as a result of the decreased consumption in both public and private sectors. In addition, the domestic consumption has continued to decelerate and has not yet exceeded its potential.
Meanwhile, in the first seven months of 2020 the MSME's main export markets have continued to decline in most markets where only the US market remains positive with a 19.9 percent expansion. The key MSME exported products are fresh fruit (+13.4 percent), electrical equipment and components (+10.6 percent), automotive and auto parts (+6.0 percent). On the contrary, the sector that remains on a downward trend is the gem and jewelry which has subsided by 48.1 percent.
The first seven months of 2020, MSME's exports to China is worth $2.585 billion accounting for 16.9 percent of the total MSME exports, making China MSME no.1 trade counterpart.
With a 2.7 percent drop of growth rate due to the coronavirus outbreak which originated in China at the beginning of this year. Notably, MSME's important export products to the Chinese market is fruit, China is Thailand’s largest export market, accounting for 75 percent of the total value of MSME exports to the Chinese market. Despite the COVID-19 situation, fruit exported from Thailand continues to enjoy a constant growth.
MSME exported $1.31 billion of agricultural products to China, accounting for 50.7 percent (up from 44.5 percent in the same period of 2019) of total exports to China with a 10.8 percent. expansion rate -- 84.5 percent were unprocessed agricultural products, including fruit, fish and meat; 14.5 percent were processed agricultural products including sugar, grain products; processed vegetables, making China the pivotal export market for Thailand. Consequently, the Office of Small and Medium Enterprises Promotion has accelerated the cooperation with China at all levels in order to help pave the way for SME entrepreneurs to expand their trading and entry into the Chinese market.
Recently, the OSMEP has signed a memorandum of understanding with the Bank of China (Thai) Public Company, a wholly-owned subsidiary of Bank of China (Hong Kong) Limited. BOCT is one of the most important commercial banking groups in Hong Kong and is the affiliate of Bank of China (Parent Bank) -- China’s most international and diversified bank.
With offices in 62 countries worldwide, Bank of China consists of a global network of entrepreneurs covering various regions such as South America, Africa, Europe, Australia and ASEAN. The Bank of China Group, established for more than a century, offers one of the most comprehensive financial services.
Hence, the synergy between OSMEP and BOCT, will therefore, significantly help create a more conductive environment for business and economy, and at the same time enhance trade opportunities for Thai SMEs to entry global marketplace. In addition, it will also strengthen the trade relations between the two organizations and help nurture the potential of Thai and Chinese enterprises.
The MOU not only aims to encourage SME operators, but also to promote the economic growth of the two countries through information exchange. Significantly, the project consists of SME promotion activities ranging from seminars and activities to sharpen the competitive edge of SMEs, the provision of financial services and products to members of OSMEP with special discounts and privileges.
“In this partnering, BOCT will provide special privileges both in terms of financial services with special discounts and privileges to members of OSMEP, those that have passed quality checks and being certified according to each region and designated country. This cooperation with BOCT will further accelerate the opportunity for Thai products to gain access in the Chinese market,” said Malai.
In addition, the collaboration also includes an enhancement of business relations between Thailand and China as well as an encouragement of information exchange both on an economic scale and SME scale, such as trade shows, seminars, business delegations, business matching, and online meetings, joint-meetings and business meeting events, to name but a few. All activities are tailored to strengthen relationships between members of the two agencies. This cooperation will help empower business capabilities to thrive during this economic recession.