Enhancing Competitive Advantage Of Thai Rice Exporters In The Chinese Market:a Comparison With Vietnam

This research was undertaken with the aim of comparing the competitive advantage of Thai and Vietnamese rice exporters in the Chinese rice import market, in order to provide suggestions to improve the competitive advantage of the Thai rice exporters. The main research question of this study is what factors contribute to the competitiveness of Thai rice exporters in the Chinese market? To answer this question, three sub-research questions are defined, including:1) Whether there is a competitive advantage of Thai rice exporters as compared to Vietnamese rice exporters in the Chinese market; 2) What factors are contributing to the competitiveness of Thai rice exports; and 3) How to improve the competitiveness of Thai rice exporters in the Chinese market?This study applies a mixture of primary and secondary research approaches to answer these research questions. A literature review was conducted with the secondary research, in order to determine how the research questions have already been explored and what research gap still remains. Using the theoretical framework based on the literature review, two paths of inquiry were chosen to answer the research questions. These included a set of qualitative interviews with two senior members of rice export firms and a government official, as well as a quantitative survey of 74 rice exporting firms in Thailand.The results indicated that two important facets of the problem of Thailand’s position in the Chinese rice export market as compared to its most important competitor at the international level, Vietnam. First, Thailand is not competitive in this market, particularly in the high quality segment where it dominates. Second, however, Thailand is gradually losing competitiveness in the Chinese market to Vietnam. There are undoubtedly many reasons for this, including higher labor costs and increased costs associated with logistics and transport, as well as comparatively discouraging and encouraging government policies toward the export market. Therefore, Thai government policy makers need to seriously consider revising or even discontinuing the paddy pledging program. The move to increase the price paid to farmers is laudable. However, it could eventually drive down production and eliminate the competitiveness of the Thai rice market.