Thailand 20250530
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Here is your Mekong Memo Thailand for this week.
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Headlines:
Regional Vision at ASEAN Summit
$15B Stimulus to Counter US Tariffs
Trade Talks Continue
Coalition Cracks Show as Partners Clash
Foreign Investment Spikes in Early 2025
Tourism in Crisis as Chinese Visitors Vanish
Border Tensions Flare Up
River Pollution Sparks Cross-Border Crisis
Economic Growth Stalls
Tech Giants Regulated with New Digital Law
Nominee Companies Under Scrutiny
Violence Surges in the Deep South
Legal Cases Tell of Human Rights Concerns
Rails, Roads, Google Traffic and Wind Power
New Regs for Air Passengers, E-Customers, IP Holders
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Regional Vision at ASEAN Summit
PM Paetongtarn Shinawatra has shared her government’s vision for Thailand's regional plans at the 46th ASEAN Summit in Malaysia. She says that priorities are on green finance, climate action, clean energy, and digital transition under the ASEAN Community Vision 2045. Thailand wants a Digital Economy Framework Agreement by 2025 while continuing to look inward for more ASEAN trade and small businesses support. She also addressed some of the more thorny issues of the day like US tariff policies and ASEAN unity. Thailand wants to see deeper integration in global supply chains, especially in advanced manufacturing like semiconductors. China remains the region's biggest trading partner with $770 billion in trade this year.
Read more: The Phuket News (Regional Development), The Star (Supply Chains)
$15B Stimulus to Counter US Tariffs
Thailand launched a $15 billion stimulus package and $115.5 billion budget to protect its export-driven economy from a US tariff smackdown. The plan includes infrastructure projects, support for SMEs, markets diversification support, and improvements to tourism. With exports comprising almost two thirds of national GDP and the US being Thailand's top export market ($55 billion in 2024), the country is staring down potential yearly losses of $7-8 billion from proposed 36% tariffs. The budget is up 0.7% while cutting the deficit to 4.3% of GDP, with growth expected to come in at between 2.3-3.3% for 2025-2026.
Read more: ASEAN Briefing (Stimulus Package), AG Brief (Budget Details)
Trade Talks Continue
Trade talks with the United States are moving forward within the 90-day timeline, with Thailand staying positive as a US court has ruled to block Trump's import tariffs. Thailand is in a tricky spot with a $45.6 billion trade surplus with the US but a $19.2 billion deficit with China. Diplomatic tensions with the US over the recent deportation of Uyghurs to China and the Paul Chambers academic persecution story complicate things. April exports were up 10.2% year-on-year, with US exports rising 23.8%, but tariffs, if enacted, could slam growth in late 2025.
Read more: Bangkok Post (Trade Challenges), Reuters (Export Growth), Bangkok Post (Ongoing Negotiations)
Coalition Cracks Show as Partners Clash
Tensions between Pheu Thai and Bhumjaithai continue to threaten government stability, with fights over Senate election vote-fixing, ministry posts, and budget disputes ongoing. Their "love-hate" relationship is showing strain as Bhumjaithai resists giving up the interior ministry job. The squabbling could lead to a dissolution of the House, but legal experts say dissolving Bhumjaithai would need convincing evidence. The shaky alliance is under added pressure from a vote-fixing probe, and former PM Thaksin is vocally insisting that the coalition is going to last for its full four-year term.
Read more: AG Brief (Coalition Clash), Bangkok Post (Government Stability), Bangkok Post (Thaksin Statement)
Foreign Investment Spikes in Early 2025
Foreign investment jumped dramatically with 363 foreign companies granted business permits, up 43% from last year. Total investment hit 57.86 billion baht ($1.76 billion), up 5%, allowing for the creation of 2,314 new Thai jobs. Japan led the scoreboard with 71 businesses investing 17.26 billion baht, followed by the US, Singapore, China, and Hong Kong. The Eastern Economic Corridor has drawn 108 companies that are working on EV infrastructure, manufacturing, tech services, and data centers. Casino resort investments could reach 200-300 billion baht per location, with 5-7 global operators including Wynn and MGM jockeying for position.
Read more: Khaosod English (Foreign Investment), AG Brief (Casino Investment)
Tourism in Crisis as Chinese Visitors Vanish
The tourism sector is on the brink of disaster as Chinese arrivals have crashed far below pre-pandemic levels, dropping from 11 million throughout 2019 to about 10,000 monthly in 2025. More than half of potential Chinese tourists say that they see Thailand as unsafe. Group tours have fallen from 40% to 20% of Chinese visitors. Q1 saw 1.3 million Chinese tourists, but Thai package sales dropped 70%; Japan has become the preferred destination. Total international arrivals fell 1.75% to 13.4 million, forcing tourism authorities to cut forecasts from 38 to 37 million visitors for the year. The industry, which makes up 12% of GDP, is beset with infrastructure problems, safety concerns, and fierce regional competition.
Read more: Travel Daily News (Chinese Tourism Crisis), Pattaya Mail (Solutions Strategy), Travel and Tour World (Tourism Performance)
Border Tensions Flare Up
China-Thailand military ties have become tighter along with new agreements for better communication and joint exercises, as China becomes Thailand's main arms supplier. Border tensions rose with Myanmar as Thai F-16 jets intercepted a Myanmar aircraft bombing near the Thai border, forcing 377 Myanmar refugees to find shelter. A deadly clash between Thai and Cambodian forces has also killed one Cambodian soldier, forcing calls for diplomatic solutions from both leaders on both sides of the fence.
Read more: Bangkok Post (China Cooperation), Asian News Network (Myanmar Border), Al Jazeera (Cambodia Clash)
River Pollution Sparks Cross-Border Crisis
Thailand has begun talks with Myanmar and China about severe arsenic pollution in the Kok River that flows through major northern population centers Chiang Rai and Chiang Mai. The contamination is the result of from gold mining by seven Chinese companies in Myanmar's Shan State, an area controlled by the United Wa State Army. Arsenic levels breached safety standards, forcing health warnings. The river has turned orange in some places from toxic rare earth extraction operations and Thailand wants diplomatic talks, possible legal action, and technical fixes like sediment traps to beat this crisis threatening public health and local economies.
Read more: Khaosod English (Diplomatic Response), SCMP (Environmental Impact)
Economic Growth Stalls
Thailand's economy grew 3.1% year-on-year in Q1 2025, pushed forward by improved trade and public investment, but full-year forecasts were cut from 2.8% to 1.8%. Tourism, the last growth engine, is now shrinking with numbers down 6.9-8.8% from February to April, the first tourism decline in five years. The housing market is under pressure with mortgage rejection rates above 50%, and car sales have fallen 4.8%. Consumer confidence dropped to 55.4 as the economy suffers high household debt, weak consumption, and potential bond market instability. Bank lending across the board has dropped 1.3%.
Read more: Kasikorn Research (GDP Growth), Bangkok Post (Economic Challenges), Bangkok Post (Consumer Spending)
Tech Giants Regulated with New Digital Law
The Platform Economy Act has been put together in an attempt to regulate a $50 billion digital economy, placing much-needed oversight on tech giants while also trying to be supportive of innovation. The law requires all international platforms to have Thai representatives, and has even more stringent rules for platforms that make more than a billion baht or which have more than 6 million monthly users. Chinese giant Tencent is working on palm biometric payments, reportedly tied up with MFEC and True IDC in a test with Siam Commercial Bank, The Mall Group, and 7-Eleven. The Big Data Institute has created a national data bank that supports a Data Integration and Intelligence Platform that will hopefully connect disparate data sources for better policy planning.
Read more: Legal Business Online (Platform Regulation), Electronic Payments International (Palm Payments), Bangkok Post (Data Platform)
Nominee Companies Under Scrutiny
The Commerce Ministry has (again) started a crackdown on 46,000 suspected foreign-owned companies that use Thai nominees, with provincial governors leading nationwide inspections that are expected to take 3-6 months. A new bill is being contemplated which will classify nominee activity as a financial crime, which would allow the Anti-Money Laundering Office to seize assets (there’s no mention of due process). Recent enforcement actions have resulted in the prosecution of 820 nominee businesses between September and January, with damages estimated at 12.4 billion baht. The Federation of Thai Industries is becoming more vocal about its concerns about (fascinating) foreign "zero-dollar" factories, with nearly 87% of surveyed executives believing these operations hurt Thai industry while adding little economic value.
Read more: Bangkok Post (Nominee Crackdown), Bangkok Post (Zero-Dollar Factories)
Violence Surges in the Deep South
Violence has spiked in Thailand's Deep South with 18 deaths and 50 injuries recorded in 57 incidents during the month of April alone. Army Chief General Pana has ordered his troops to improve the protection of civilians in the wake of increased attacks by the Barisan Revolusi Nasional (BRN) insurgent group. The violence is coming during a time of stalled peace talks between the Thai government and insurgents. Deputy PM Phumtham will visit the southern provinces to try and wrangle a peace plan that combines security with economic development.
Read more: Asian News Network (Military Response), Human Rights Watch (Civilian Attacks), Bangkok Post (Peace Initiative)
Legal Cases Tell of Human Rights Concerns
Former PM Thaksin is facing a Supreme Court probe into the extended hospital stay on his arrival back to Thailand. Paul Chambers appears to be out of the woods for the moment as the Attorney General has dropped royal defamation charges against the academic for lack of evidence, although he did already lose his job at Naresuan University and has left Thailand. The Lawyers Council is looking into the alleged torture and death of Myanmar national Aung Ko Ko by Thai soldiers near the border, with UN Special Rapporteurs reportedly seriously concerned about the case. Thai lawyer Arnon Nampa, serving a 22-year sentence for lese majeste, has received the 2024 Front Line Defenders Award for Human Rights Defenders at Risk.
Read more: Bangkok Post (Thaksin Investigation), Prachatai English (Academic Charges), The Thaiger (Human Rights Award)
Rails, Roads, Google Traffic and Wind Power
Thailand wants to be a hub in the Singapore-Kunming Rail Link that will eventually connect eight Southeast Asian countries and China. The Rail Transport Department is building out double-track expansions to improve efficiency as everyone moves towards better regional economic integration. The Southern Land Bridge Project is going to be delayed; a draft bill is expected in July. Bangkok has partnered with Google on an AI-powered traffic management system that uses artificial intelligence and Big Data to analyze real-time traffic and adjust signals dynamically (keenly awaiting the results). Wind Energy Holding plans to nearly triple capacity from 700 to 2,000 megawatts by 2037, requiring a 65-billion-baht investment through an IPO.
Read more: Bangkok Post (Rail Network), Bangkok Post (AI Traffic), Bangkok Post (Wind Power)
New Regs for Air Passengers, E-Customers, IP Holders
The Civil Aviation Authority introduced flight compensation rules requiring airlines to pay 1,500-4,500 baht for delays longer than 5 hours and similar amounts in case of cancellations. The FDA announced a partnership with Lazada and Shopee to regulate health product sales, removing nearly 10,000 non-compliant listings and taking legal action against 134 sellers. The government approved new IP enforcement frameworks with the US Trade Representative Office as it works towards getting Thailand off the USTR watchlist.
Read more: Travel News (Flight Compensation), Tilleke (Health Products), Tilleke (EU Trade), Vietnam Plus (IP Rights)
That’s it for this week, thanks for reading!
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I only came across the story of the Chinese actor being kidnapped, last week. Fascinating that, that could have such impact on tourism.
The 'Tourism in Crisis' memo is poorly written and confusing. It jumps around, the numbers are weird and inconsistent. I read it a few times to get uncluttered but it's just poorly written overall.