At present, the development of the COVID-19 epidemic has attracted global attention, and China’s economic trend has also become an issue of particular concern to people in addition to the development of the epidemic. ASEAN has just been promoted to China’s second largest trading partner in 2019, and the textile and apparel industries of many of these countries have very close ties with China. So far, what impact has the epidemic had on China-ASEAN competition and cooperation in related fields?
Vietnam:
Insufficient imported raw materials from China have caused production difficulties
Textiles are Vietnam’s third largest export commodity after smartphones and electronic products, but they are highly dependent on supplies from China. of raw and auxiliary materials to operate. Since the outbreak of the new coronavirus in China, Vietnam’s textile and apparel supply chain has been severely affected. Starting from the second quarter of this year, Vietnam’s textile and apparel industry will face a severe shortage of raw materials and auxiliary materials.
Vu Duc Giang, chairman of the Vietnam Textile and Apparel Association (VITAS), said that the current raw and auxiliary materials of local Vietnamese companies are only enough to maintain production until the end of March. If they still cannot obtain enough imports from China, Japan and South Korea in March, Many companies will face a serious shortage of raw materials and auxiliary materials starting from April, and many textile and clothing manufacturing companies are afraid that they will be left without rice.
Vu Duc Giang said that 55% to 60% of the supply of raw and auxiliary materials for Vietnam’s textile industry comes from China, especially clothing raw and auxiliary materials, yarns, fabrics, etc. are mainly imported from China. According to Vietnamese media reports, due to the closure of Chinese factories due to the epidemic, Vietnamese textile and footwear manufacturers have difficulty importing raw materials from China. Some factory raw material stocks have been used up, some can last for a few months, and some can only last for a few months. The Vietnam Textile and Garment Association recommends that manufacturing companies turn to other sources of imports, but the reality is that apart from China, Vietnamese companies have a very narrow choice of imported raw materials.
In order to cope with the shortage of raw and auxiliary materials caused by the delay in resumption of work in Chinese factories, the Vietnam Textile and Apparel Association organized a business delegation to India to seek raw and auxiliary materials. When Gao Guoxing, Deputy Minister of Industry and Trade of Vietnam, met with Vadawan, Deputy Minister of Industry and Commerce of India, he also proposed that India consider solving Vietnam’s difficulties in the source of textile materials. But this is only a temporary measure for Vietnam to deal with the delay in resumption of operations in Chinese factories. If Vietnam wants to get rid of its dependence on China for raw materials and auxiliary materials, it will take a long time.
Myanmar:
Shortages of raw materials in garment factories reduce working hours
U Myint Soe, chairman of the Myanmar Garment Industry Merchants Association, said that due to the impact of the new coronavirus pneumonia epidemic, the clothing fabrics required by Myanmar’s garment factories cannot be supplied normally. Therefore, the garment factories have experienced a shortage of raw materials and their production work has been affected. .
Wu Minsuo explained that due to the epidemic, factories producing clothing fabrics in China cannot operate normally and there is a shortage of clothing fabrics. Therefore, Myanmar cannot normally import clothing fabrics from China, which has also affected the production work of Myanmar’s garment industry. About 90% of the clothing fabrics in Myanmar’s garment industry are imported from China, with only 10% imported from Indonesia, South Korea and Vietnam.
U Min Soe said that not only Myanmar is facing a shortage of raw materials, but the whole world is facing it. For example, most car companies in the world are facing shortages of parts and raw materials as most of China’s production industry is unable to operate normally.
Some businessmen in the garment industry said that about 10% of Myanmar’s population is employed in the garment industry. After the Chinese New Year holiday, due to the difficulty in importing clothing fabrics from China, production work cannot proceed normally. Therefore, garment factories Working hours had to be reduced and workers were given holidays on Saturdays and Sundays.
Cambodia:
The government introduces a “tax-free holiday”
Recently, Cambodian Prime Minister Hun Sen stated through a live TV program on February 24 that due to the impact of the COVID-19 epidemic on the Cambodian economy, the government has decided to adopt a new policy of “tax-free holiday” for some domestic companies and factories for six months to one year.
Hun Sen said that the COVID-19 epidemic has affected Cambodia’s tourism industry and garment manufacturing industry, and some garment factories have also been affected by the withdrawal of some tariff preferences by the European Union. The government has formulated a number of measures to support related domestic industries. Hun Sen said that some factories and enterprises in Cambodia can enjoy a “tax-free holiday” from six months to one year. The specific period will depend on the degree of impact on the factory, and the Ministry of Finance and Economy will evaluate the actual situation of the factory.
China and ASEAN:
The impact on the overall trade pattern may not be obvious
Dr. Li Hao, a researcher at the China-ASEAN Regional Development Collaborative Innovation Center, said that the epidemic will lead to a decline in China-ASEAN import and export trade. “Because of the epidemic, China’s consumption has slowed down sharply, and sluggish demand will inevitably affect ASEAN countries that are highly dependent on foreign trade. From the perspective of the value chain, China is still the main supplier in the region. The current epidemic has caused China’s domestic supply capacity to decline, which in turn has led to conflicts with ASEAN The import trade of raw materials and intermediate products has weakened. Thailand, Malaysia, the Philippines, etc. are all countries with high supply chain correlation in the region, and will be relatively more affected.” Li Hao believes that for Guangxi, Yunnan, etc. Border trade in border provinces and regions with ASEAN countries will also be severely impacted.
Currently, border trade at the Muse Port between China and Myanmar has come to a standstill, with daily direct trade losses estimated at more than 14 million US dollars.
However, Li Hao also pointed out the impact of the epidemic on investment and industryThe impact may not be obvious. “Delays in manufacturing production due to quarantine measures and other situations will increase pressure on the regional supply chain and increase costs in the short term. However, as the epidemic eases and is lifted, the production system in the entire Asia-Pacific region can quickly return to normal. Therefore, I personally judge that it is unlikely that the industrial chain shift expected by some Western countries will occur.”
In this regard, the latest research report released by the ASEAN, China, Japan and South Korea Macroeconomic Research Office (AMRO) predicts that although The COVID-19 epidemic will have an impact on the economy and financial markets of this region. But everything is temporary.
China’s proportion of economic contribution to the region and the world has been increasing in recent years. It is the main economic growth leader among the “ASEAN 10+3” (the ten ASEAN countries + China, Japan and South Korea). Regional economic integration and supply chain cooperation are becoming increasingly close, and growth dividends are shared with all countries. Undoubtedly, the new epidemic at this time will also have a spillover effect on economic growth and financial markets in Asia. The report believes that the impact of the epidemic is still short-term, and the manufacturing capacity catch-up may quickly make up for the losses in the first quarter. With the arrival of the turning point of the epidemic, a “V-shaped reversal” can be expected. </p
