Competitiveness and complementarity of agricultural products between Thailand and China on a short-term basis

Abstract

China and Thailand belong to Regional Comprehensive Economic Partnership countries, and agricultural trade is vital to Thailand’s economy. Competition in agricultural trade between countries is fierce. Therefore, it is crucial to understand the advantages and disadvantages of agricultural trade between Thailand and China. Complementarity and competitiveness of international business show the benefits and drawbacks of cross-border exports and the trend of future exports. This study uses quantitative techniques to analyze the agricultural trade between Thailand and China. It employed four methods, including the calculations of the Grubel-Lloyd index, revealed comparative advantage index (RCA), trade intensity index (TII), and trade complementarity index (TCI). The result of method 1 indicates that Thailand’s agricultural trade has a more substantial competitive advantage (three years average RCA = 1.69 > 1.25) than China (three years average RCA = 0.37 < 0.8) from 2017 to 2019; they are complementary in specific categories of agricultural products. The result of method 2 indicates that items 03, 07, 13, and 14 of China’s exports and Thailand’s imports have strong complementarity. Items 10, 11, 17, and 19 of Thailand’s exports and China’s imports have strong complementarity. The result of method 3 indicates that the positive factor on bilateral trade flow is significant. The result of method 4 indicates that items 06, 07, 12, 19, 20, and 21 have advantages in intra-industry trade, and items 09, 10, 13, and 18 have advantages in inter-industry trade. The paper has important implications for Thailand’s government to formulate relevant trade policies to enhance its agricultural export competitiveness, which is also conducive to developing bilateral agricultural trade.