Countries are the same as companies. When the product structure is single and a trade deficit is formed, there will be a fiscal deficit, and then capital investment will continue to be needed to make up for the project deficit.
This method is actually not wrong, but it should have two prerequisites. One is whether it can ensure the continuous inflow of foreign capital, that is, it requires continuous investment of foreign capital. The other is that after the inflow of foreign capital, the country's export capacity should be improved, thereby reducing future project deficit.
It is a pity that the Thai government has only achieved the first point. Foreign investment from island countries and other countries continues to flow in, but the country's export capacity is getting lower and lower.
For example, the main product exported by Thailand is electronic products. Many electronic components imported by China are purchased from Southeast Asian countries such as Thailand.
But since last year, the global demand for electronic products has dropped sharply. China's growth alone cannot drive Thailand's exports of electronic products. As a result, Thailand's export growth rate has dropped to 3%, while the trade deficit It is as high as 8.3%.
In other words, even though Thailand's exports seem to be booming, in fact it is still losing money.
Most of the electronic product factories that Thailand mainly exports are invested and built by island countries. Because Thailand has low land prices, abundant labor, and low wages and consumption levels, it seems that Thailand has become a world-class electronic component manufacturer. Big countries are actually OEMs for electronic product companies such as island countries.
Even with so much investment, many projects in Thailand still suffer from deficits year after year. It seems that GDP is growing like crazy, but in fact not much money has been made at all. Most of the money has been made by foreign investors, especially island countries.
Sony, Songxia, and even AIWA and Sixth Sense all have factories in Thailand. Not only are the factory construction costs low and the operating costs low, there are also various preferential policies for foreign investment.
The more factories there are, the greater the demand for workers, and workers' wages will naturally increase. Workers' wages in Thailand have increased more than ten times in ten years. When workers' wages are high, labor-intensive industries will lose their international competitiveness.
The production of shoes, clothes and other products that Thailand originally mainly exported has been continuously reduced, and those factories have also closed down.
These data and information were all collected by Feng Yu. This also gave Feng Yu a deep understanding of why Thailand's financial crisis broke out so quickly.
If you look at Thailand's fiscal deficit, the per capita debt amount exceeds US$1,500, but Thai people are still living a very comfortable life. European high-end perfumes, famous wines, luxury cars, luxury watches and other luxury goods are imported in large quantities. People seem to be rich, so don't they just pursue enjoyment
From the fact that Thailand is the third largest importer of Mercedes-Benz cars in the world, we can see how proud the Thai people are at this time. Fu Guangzheng once wanted to help sell Songjiang cars to Thailand, but Thai dealers didn't like it at all. Only imported luxury cars can be sold in Thailand. The mid- to low-end car market has been completely occupied by the island's cars.
Thai people are very satisfied with life and think that their country is developing very well. They even look down on China because their per capita income is far higher than that of China.
One is to enjoy having money, and the other is to invest in the stock market. Everyone is very enthusiastic about the stock market. Whether they are teachers, workers, drivers, or even women who stay at home full time, they all started to speculate in the stock market. Because the stock market has been rising, they all think that even fools can make money.
Bank deposits are getting less and less, so everyone is taking out their money and investing it in the stock market. What's even more crazy is that they take loans from banks and invest them in the stock market. They think that they can make a lot of money from the stock market after paying back the interest.
The more representative ones are securities companies and financial companies. They can lend a large amount of money from banks and even manipulate the stock prices of some stocks to make money to some extent.
There are more and more loans and less and less deposits. Banks can only raise loan interest rates, but this cannot stop people from taking loans. The annual interest rate is as high as 17%? It doesn’t matter, it’s a loan!
Use it to speculate in real estate and stocks, and you can make money back in a few months! This is not investment, it is clearly speculation!
The loan interest is too high, and some industrial companies cannot afford to repay the interest. Conventional industries are severely restricted, resulting in fewer and fewer types of Thai export products.
If a normal country has money, should it invest in some basic things, such as... education? But as for Thailand, their wealth is an illusion. They have a fiscal deficit. Where do they get the money to invest in education
It can be said that Thailand's education and technological level are far inferior to other countries in Asia, and they are far behind China's. It is currently ranked last in Asia.
Without science and technology and engineers, heavy industry and high-tech industries cannot develop. Without any strong country, heavy industry and high-tech industries are backward. Therefore, Thailand's economy is prosperous on the surface, but it is not a strong country at all.
To put it simply, Thailand cannot reach the sky or the ground. High-tech industries cannot grow, and traditional industries have lost their competitiveness. Trade deficits are inevitable, and fiscal deficits are getting bigger and bigger.
Could it be that the Thai government doesn’t see these problems at all
Of course it's impossible, they saw it, but they didn't have a particularly good solution. The trade deficit is getting bigger and bigger, and the Thai baht itself is facing depreciation pressure. But once the baht depreciates, Thailand will lose even more.
There is no other way. The Thai government can only intervene secretly to ensure the stability of the foreign exchange market. When the government of a country has to intervene in the foreign exchange market, it is enough to indicate that there are serious problems in the country's financial market and the economy!
And this was also noticed by Soros and others. Before they took action with all their strength, the Thai government had to intervene. After they took action with all their strength, could the Thai government still be able to resist
The Bank of Thailand cannot get out the money at all because there are too many bad debts and bad debts.
A large part of these bad debts are caused by bank managers who relax their relatives and friends. These managers also believe that they will definitely make money by borrowing money from banks to speculate in stocks and real estate.
Everyone else is making money, so of course you can't treat your own people badly. It doesn't matter if you don't have enough mortgage, can you still lose money and not be able to pay it back
There are three people in the family. Each person has to pay for two apartments, right? It doesn't matter if you can't live in that much, anyway, this house is not for living, it is for speculation. Wait a year or two, sell it after the price rises, and you can earn an extra house.
Another important point is that the currency value of the Thai baht is seriously overvalued. If it were not for the fixed exchange rate, the Thai baht would have devalued long ago.
Various reasons have led to the financial crisis in Thailand, which is inevitable. Even without the intervention of Soros and others, a financial crisis will break out in Thailand. It's just that the entry of Soros and Feng Yu made the financial crisis break out earlier and more violently!
(End of chapter)