The novel coronavirus pneumonia virus has been spreading in Southeast Asia for nearly five years. The epidemic in Southeast Asia has been increasing since July. The epidemic situation in Southeast Asian countries such as Malaysia, Vietnam, Thailand, Indonesia and Philippines has reached the critical point. Disrupting the global supply of rubber gloves, semiconductors, sports utility vehicles and other commodities poses a very serious threat to the recovery of the local economy.
It is understood that at present, manufacturing factories in Southeast Asian countries are generally facing the dilemma of “five shortages”. As an important part of the Asian market, the growing epidemic in Southeast Asian countries has led to chaos in the Asian market, and may even distort the global supply chain and face the nightmare of supply chain interruption.
Malaysia
The latest wave of epidemic in Malaysia began to break out after entering July. Since July, the newly confirmed cases and new deaths in Malaysia have increased exponentially; It is reported that although Malaysia closed the city as early as June 1, from the later status quo, the closure did not play much effective role. At present, the closure period of Malaysia is being extended wirelessly; It is reported that Malaysia has decided to gradually restart production when the number of confirmed cases is about 4000 a day, but at present, it seems that the restart of production in Malaysia is far away.
In the semiconductor market, Southeast Asian semiconductors account for 27% of the global semiconductor packaging and testing market, of which Malaysia accounts for almost half of the whole Southeast Asian market, and Malaysia’s semiconductor market share is 13% of the whole Southeast Asian region. Therefore, Malaysia is known as the “important town of semiconductor packaging and testing” and the seventh largest exporter of semiconductor products in the world.
Affected by the epidemic, the Malaysian government has indefinitely extended the national action control, making the global passive component (MLCC) market face the challenge of supply interruption. Wang Shoutai, chairman of the Malaysian Semiconductor Industry Association, said that “after some factories were infected, they were forced to shut down.”
Vietnam?
The outbreak of this round of epidemic has also brought Vietnam to the most critical state. At present, the closure period of Hanoi, the capital of Vietnam, has been extended to August 22, while Ho Chi Minh City, the hardest hit area, has maintained social isolation until September 15.
As early as early August, the Vietnamese government maintained the blockade on 19 cities and provinces in southern Vietnam and strictly restricted travel. The long-term closure of 19 provinces and cities in Vietnam had a very serious impact on the production and supply of Vietnam. In this way, even though many export enterprises in Vietnam have received orders in the third quarter of 2021 or the whole year of 2021, the factories have to stop operation because the epidemic is out of control.
In Vietnam, the blockade principles of regional enterprises are “three places” and “two points and one line”, in which “three places” refers to “local production, local eating and local rest”“ “Two points and one line” means that enterprises pick up workers between construction sites and dormitories to avoid factory workers’ contact with the outside world and affect production.
In Vietnam, shoes and clothing and textiles are the main components of the manufacturing industry. It is reported that about 90% of Ho Chi Minh’s factories manufacturing textiles, shoes, bags, electronic products and wood products were forced to stop production because they could not meet the above requirements of “three places” and “two points and one line”.
Nike’s sports shoe manufacturing plant in Vietnam has almost stopped production, and may even face the risk of out of stock; Moreover, in Vietnam, even those large enterprises and factories can only support for a period of time, and small enterprises can only close down. It is reported that more and more small enterprises close down in Vietnam.
The blockade of a large number of provinces and cities in Vietnam has led to the shutdown of factories, the closure of warehouses and the neglect of imported goods, which has seriously congested the ports in southern Vietnam. Among them, Kailai port, the largest port in Ho Chi Minh City, has a backlog of more than 100000 TEUs; In addition, the two largest ports in Vietnam, Kailai port terminal and Xingang gaimei international terminal, have suspended receiving some containers since August 5.
Thailand
The highest level epidemic control area in Thailand began to expand from 13 to 29 provinces in early August; In August 16th, the novel coronavirus pneumonia management center of Thailand government announced that the measures to control the epidemic and control of the 29 cities in the highest level of the whole country, including the capital of Thailand, were extended to August 31st.
Employees continue to work at home. Enterprises with more than 50 employees must prepare internal isolation places, and enterprises with more than 100 employees implement closed management.
This year, the Thai baht has become the worst performing currency in emerging markets in Asia, and even cast a shadow on the procurement of Thai importers. So far, the Thai baht has depreciated by 11%.
Indonesia
Indonesia is now the center of COVID-19 in Asia. By the year August 4th, the number of deaths of Indonesian COVID-19 has exceeded 100 thousand, becoming the second Asian countries that have accumulated more than 100 thousand deaths after India.
Due to the continuous extension of epidemic prevention restrictions in Indonesia, most of the assistance to stimulate the economy has not been released in place, which makes tens of millions of small companies in Indonesia facing the risk of bankruptcy. It is reported that more than 30 million small and micro enterprises in Indonesia have closed down due to the epidemic.
In addition, some associations in Indonesia are calling for anti-dumping against Chinese products. Most of Indonesia’s steel products are imported from China. At present, Indonesia steel production association has proposed anti-dumping measures against Chinese imported steel, including hot-rolled steel, steel plate, cold-rolled steel, wire rod, bar, profile and so on, to the central government of Indonesia, but the Indonesian government has not yet agreed.
Since August 1, Indonesia has implemented the new cross-border e-commerce policy, which has also had a great impact on Chinese exporters.
the Philippines
In the new round of epidemic outbreak in Southeast Asia, the Philippines is the second country to break out after Indonesia. It is reported that at present, the delta mutant strain has spread almost throughout the Philippines. On August 6, Manila, the capital of the Philippines, was re closed. At the same time, Manila Metropolitan area with a domestic population of more than 13 million is full of checkpoints to ensure that only people engaged in necessary work can take to the streets.
According to the Philippine epidemic prevention guidelines, after the blockade, the necessary livelihood industries, enterprises and workers can carry out normal operation and work, and only one family member can go out to purchase daily necessities and food.
The outbreak of the epidemic in Southeast Asia has led to a large number of shutdown and even direct closure of factories in Southeast Asia, increasing the risk of global supply chain interruption. American media said, “American consumers may soon find that local shelves are empty.”
In this way, China has become the best choice for order transfer for countries and purchasers relying on Southeast Asia. It is reported that many Southeast Asian orders have returned to China. However, the return of orders and gathering in China are constantly pushing up China’s export freight, and China’s products with thin profits and low value have lost shipping space.
The total exports of Southeast Asian countries account for 5.7% of the total global exports. The paralysis of manufacturing industry in Southeast Asia has also had a very significant impact on larger economies such as the United States and China, especially electronic product industries such as semiconductors. It is reported that 38% of China’s data processing equipment and electronic products and 29% of China’s telecommunications equipment products are imported from Indonesia, Malaysia, the Philippines, Thailand and Vietnam; The United States imports 50% of its semiconductor products from these five countries.
Post time: Aug-27-2021