A country is the same as a company. When a country's product structure is the same, there will be a trade deficit, and there will be a financial deficit. After that, the country will need to invest more money to make up for the deficit.
In fact, this method could not be said to be wrong, but there should be two prerequisites. One was to ensure the continuous inflow of foreign capital, which required continuous foreign capital investment. The other was to increase the country's export capacity after the inflow of foreign capital, thereby reducing the future project deficit.
But the Thai Government only managed to achieve the first condition. Japan and other countries' foreign funds are entering Thailand, but Thailand's export capacity is getting lower.
For example, Thailand's main exports are electronic products. Many of Hua Xia's electronic components are bought from Thailand and other Southeast Asian countries.
But since last year, the global demand for electronic products had dropped. Just Hua Xia's growth cannot boost Thailand's electronic products exports. This resulted in Thailand's export growth rate dropping to 3%, and the trade deficit is 8.3%.
That means Thailand's exports might seem to be doing well, but it is still losing money.
Most of Thailand's electronic factories are invested by Japan. This is because Thailand's land is cheap, and there are plenty of workers. Thailand's wages and living standards are low, and it seems like Thailand has become a world-class electronic component manufacturing country. But it is actually a contract factory for Japanese and other electronics companies.
Even with so many investments, many of Thailand's projects are still in the red every year. Thailand's GDP might seem to be increasing rapidly, but it is not making much money. Most of the profits are taken away by foreign investors, especially Japan.
Sony, Panasonic, and even Aiwa and the Sixth Sense have factories in Thailand. Not only the factories cost is low, but the operations cost is also low. There are also all sorts of preferential policies for foreign investors.
When there are more factories, the demand for workers will increase, and the workers' wages will increase. Thailand's workers' wages had increased by more than ten times in the past ten years. When the workers' wages increase, the labor-intensive industries will lose their competitiveness.
Thailand's exports of shoes, clothes, and other products are decreasing, and those factories close down.
Feng Yu had gotten his men to collect all these data and information. This also let Feng Yu understand why Thailand's financial crisis happened so fast.
Thailand's financial deficit is more than 1,500 USD per capita, but the Thais are still living a good life. European high-end perfume, famous wine, famous cars, famous watches and other luxury goods were imported in large quantities. People seemed to be rich, but it was just a pursuit of enjoyment.
From the fact that Thailand was the third largest importer of Mercedes-Benz cars in the world, one could see how proud the Thais were at this time. Fu Guangzheng had wanted to help to sell Songjiang Motors vehicles to Thailand, but the Thai dealers were not interested. Only imported luxury cars can be sold in Thailand. The middle and low-end car market was dominated by Japanese cars.
The Thais were very satisfied with their lives and felt that their country was doing well. They even looked down on Hua Xia because their average income was much higher than Hua Xia.
With money, one is to enjoy life, and the other is to invest in the stock market. Everyone is crazy about the stock market. Teachers, workers, drivers, and even women who stayed at home all started to invest in stocks. This was because the stock market had been rising, and everyone thought that even a fool could make money by investing in stocks.
The amount of money in the bank is decreasing, and everyone is withdrawing their money to invest in the stock market. Some people even took loans from the banks to invest in the stock market. They felt the money they made from the stock market can be repaid after the interest.
Securities companies and finance companies are more representative. They can borrow a large sum of money from the bank and even manipulate the share prices to make money.
As the number of loans increased, the deposits in the bank decreased. The banks can only raise the interest rates, but this does not stop people from taking loans. The annual interest rate is 17%? It's fine. Take the loans!
You can use the money to speculate in properties and stocks, and you can earn it back in a few months! This is not investment. This is speculation!
The interest from the loans is too high, and some companies cannot afford to pay the interest. Thailand's normal industries are severely restricted, and Thailand's exports to other countries are decreasing.
Normally, when a country has money, they will invest in basic things like … … education. But Thailand's money is an illusion. They have a deficit in their finances, and where do they get the money to invest in education?
Thailand's education and technology standards are not as good as other countries in Asia. They are still far behind Hua Xia. Currently, Thailand is ranked last in Asia.
Without technology and engineers, their heavy industries and high-tech industries will not be able to develop. No country is strong, and their heavy industries and high-tech industries are lagging behind. That's why Thailand might look prosperous on the surface, but it is not considered a strong country.
Simply put, Thailand is stuck between a rock and a hard place. Their high-tech industries cannot increase, and their traditional industries lost their competitiveness. Their trade deficit is unavoidable, and their fiscal deficit is getting bigger.
Can't the Thai Government see these problems?
Of course not. The Thai Government can see these problems, but they do not have any solutions. The trade deficit is getting bigger, and Thai Baht is facing pressure to depreciate. But if Thai Baht depreciates, Thailand will suffer more losses.
The Thai Government has no choice but to intervene in the dark to ensure the stability of the Forex market. When a country's government has to intervene in the Forex market, it means the country's financial market and economy are facing serious problems!
Soros and the rest had noticed this. They had not even used their full strength, and the Thai Government is already forced to intervene. What can the Thai Government do after the Thai Government intervenes?
Thailand's banks also do not have enough money as they have too many bad debts.
Most of these bad debts are from the banks' managers. They had borrowed money from their relatives and friends. These managers also felt borrowing money from the banks to invest in stocks and properties is a way to make money.
Everyone else is making money, and the banks cannot treat their own people badly. It's fine if they do not have enough collateral, but they can't afford the losses.
There are three people in their family, and each of them should have at least two apartments. It's fine if they can't afford so many apartments. Anyway, these apartments are not for them to live in. They are for speculating. After one to two years, the prices will rise, and they can sell the apartments to make money.
Another important point is Thai Baht is overvalued. If Thailand had not adopted fixed exchange rates, Thai Baht would have depreciated a long time ago.
Due to all sorts of reasons, Thailand's financial crisis is unavoidable. Even without Soros and the rest's intervention, Thailand will still have a financial crisis. But Soros, Feng Yu, and Feng Yu's intervention had caused the financial crisis to erupt earlier and more violently!
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