Jun. 23--QINGDAO, CHINA -- The Thai government is ramping up direct trade through Qingdao, one of China's main ports, in a bid to increase Thai shipments to north and northeastern China.

The government plans to set up a Thai Trade Centre in Qingdao in the near future, as part of the plan to boost Thailand's trade throughout Shandong province, said Deputy Commerce Minister Alongkorn Ponlaboot during his three-day trade mission to Qingdao and Tianjin which started last Saturday.

The mission also aims to rebuild Chinese visitors' confidence in Thailand.

Three memoranda of understanding have been signed on the visit. These include province-to-province trade co-operation between the China Council for the Promotion of International Trade, Qingdao sub-council and Chiang Mai Chamber of Commerce; and a US$17-million trade deal between Thai Hua Rubber Plc, a rubber producer and exporter, and Qingdao Three-Six-Nine International Trade Co.

Qingdao, the world's seventh biggest city, is a distribution base for Shandong province, a major industrial production centre with China's second largest gross regional product, and an economy growing more than 10 percent per year.

Qingdao is China's fifth largest importer of Thai products, mainly rubber, with shipments worth more than US$2 billion (about 70 billion baht) a year.

Qingdao is China's tyre manufacturing hub, accounting for over 35 percent of the country's rubber imports from Thailand, said Thanakorn Seriburi, chairman of Thailand-China Business Council.

The province-to-province deal would help expand trade, particularly for Thailand's handicraft and home furnishing products, food, and service business, said Narong Kongprasert, chairman of the Chiang Mai Chamber of Commerce.

"The Thai government needs a new trade strategy to open new trade lanes mainly through direct trade enabling Thai products to get to each province of China," said Mr Alongkorn. "Apart from direct marketing, the government is also committed to promoting match-making between Chinese importers and Thai farmers, notably for fruit, to cut out the middle men and raise farmers' income."

Investors from Qingdao are likely to invest more in Thailand, particularly its textile and garment business and food industry, due to its position as the second largest Asean economy and a possible gateway to Asean, said Chu Lian Yu, deputy chief of the Qingdao sub-region council of the China Council for Promotion of International Trade.

Penetrating China's markets is a top priority for the Commerce Ministry. The government wants to expand trade between Thailand and China to $50 billion from $36 billion in 2008, under the agreement on expanding and deepening bilateral economic and trade co-operation between Thailand and China, due to be signed by the Thai commerce minister and her Chinese counterpart tomorrow.

Thai Prime Minister Abhisit Vejjajiva is also scheduled to visit China from tomorrow to Saturday.

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