Hundreds Of Textile Factories In Vietnam Shut Down

      Under the impact of a new wave of new coronal pneumonia, India and some Southeast Asian countries suffered heavy losses. Now, Vietnam is lost. In the past week, hundreds of new pneumonia cases have been diagnosed in Vietnam every day. Judging from the numerical value, it seems that the epidemic situation is still under control. However, for Vietnam, the significance of this number is very different.

 

        This is the first large-scale outbreak of new pneumonia in Vietnam since the global outbreak in 2020. At present, the epidemic is still accelerating in northern Vietnam.

 

        Urgent! After India, there was an outbreak in Vietnam

 

        Previously, the number of new cases diagnosed in Vietnam every day was about 150, but the number of confirmed cases in recent years is rising. According to the Ministry of health, as of 6:00 on May 26, there were 5931 confirmed cases of new crown pneumonia in Vietnam, including 4442 cases of local cases and 1489 cases of imported cases. At present, the epidemic has spread to more than 30 areas in 63 provinces and cities of Vietnam, including Hanoi, the capital. It is worth noting that at the end of April, nearly 2800 people in Vietnam had been infected with the new crown, including hundreds of artificial people. Due to the concentration of outbreak infection clusters, two provinces in northern Vietnam have become the "epicenter" of a new wave of epidemic, and the risk of infection is also increasing. In order to curb the continuous spread of the epidemic, Hanoi, Haiyang, Beining, Danang and other places in Vietnam have also introduced emergency prevention and control measures to prohibit crowd gathering activities; In addition, Vietnam has expanded the blockade measures in the industrialized areas in the north. In addition to the rapid spread of the epidemic in dense places, another factor is the low coverage rate of new coronal vaccine.

 

        Vietnam's deputy prime minister said at the end of April that it was necessary to make preparations for dealing with 30000 people infected with the new coronavirus in Vietnam. In addition, it is also required to strengthen the management of isolation sites, strengthen the import of vaccines and accelerate the development and production of vaccines in Vietnam. Vietnam has almost completely closed its border since March 2020, allowing only citizens and a small number of foreign experts to enter Vietnam. Upon arrival, Vietnam needs to be isolated in hotels or designated places. Data show that in Vietnam, with a total population of about 96 million people, about 1 million doses of new coronavirus vaccine have been vaccinated in its territory, but only nearly 30000 people have completed two doses of vaccination. Therefore, in order to speed up the supply and vaccination of vaccines, Vietnam plans to produce the new coronal vaccine of Russian satellite V this year. Recently, Vietnam's Ministry of finance also said that it would set up a fund of 25.2 trillion dong (1.1 billion US dollars) to purchase 150 million doses of new crown vaccine for its citizens.

 

        The World Health Organization's chief representative in Vietnam, KIDONG Park, said the prevention and control of the disease in Vietnam will enter a critical stage in the next few weeks against the background of the complex and severe new crown pneumonia epidemic in Vietnam.

 

        Many industrial parks are temporarily closed, and the industry is seriously affected!

 

        With the rapid spread of the epidemic, Vietnam's industrial supply chain and production chain were seriously hindered. Vietnam's "Customs online" website reported on May 24, 2021 that in order to ensure the progress of Vietnam's textile production and export, Vietnam Textile Association (vitas) recently proposed in writing that Vietnam's prime minister and the Ministry of health should assist Vietnam's textile enterprises to purchase and vaccinate the new crown vaccine by themselves. Vietnam Textile Association pointed out that Vietnam's textile industry has more than 3 million employees, and many enterprises have tens of thousands of workers. It is estimated that the export volume will reach 40 billion US dollars in 2021. Under the complex situation of Xinguan epidemic, there are great risks in the operation and production of the factory. If the enterprise is shut down and isolated for 14-21 days due to the epidemic, the annual production plan is almost broken. At present, many enterprises have export orders in their hands, even full orders in the whole year. If they can't complete the orders on time, they may have to pay a large amount of liquidated damages or be cancelled. At that time, Vietnam's textile industry may lose billions of dollars. Enterprises will face the risk of closing down or bankruptcy, and a large number of workers will face the plight of unemployment and loss of income sources.

 

        Therefore, the Vietnam textile association suggested that the government and the Ministry of health should give priority to the vaccination of large-scale textile enterprises with intensive workers in the epidemic area. At the same time, it also suggested that the government should organize vaccine sources in various ways, and give priority to the textile enterprises to promote the vaccination work as soon as possible through social purchase. In addition to Vietnam's textile industry, the current situation of Vietnam's electronic industry chain is also in danger. According to the official letter No. 680 issued by the Vietnamese government on ensuring the safety of Xinguan epidemic prevention and control in the industrial zone, there are 300 industrial parks and 70000 factories in Vietnam. Many companies, such as Samsung, Lixun precision, Foxconn and Haineng Industrial Co., Ltd., have suspended local production, and some of their businesses have also been affected. Beining Province, where Samsung Electronics production base is located, has begun to implement curfews and other travel restrictions; The Samsung plant in Beijiang city was also suspended because more than 40 employees tested positive. Data show that Vietnam, as Samsung's largest overseas production base, has invested more than 17 billion US dollars (about 120 billion yuan) and established four subsidiaries.

 

        In addition, Bajiang Province in northern Vietnam has temporarily closed four industrial parks, namely Yunzhong, Guangzhou, tingzhan and Shuangxi Neihuang. In total, hundreds of factories have suspended production and more than 130000 employees have been affected.

 

        How big is the impact?

 

        A few days ago, the world bank said in its macroeconomic report on Vietnam that since the end of April 2021, the outbreak of an epidemic in Vietnam forced Vietnam to introduce measures such as epidemic prevention and control, which will have a serious impact on Vietnam's domestic economic activities, especially in the fields of tourism, transportation and retail.

 

        In recent years, a large number of manufacturing enterprises have begun to set up factories in Vietnam. In addition to those from the United States, Japan and South Korea, various labor-intensive enterprises in China, such as textile, manufacturing and electronics, have also passed by.

 

        In addition to the lower labor cost, there are also a series of attractive policies in Vietnam. For example, enterprises with an investment of 300 million US dollars, annual sales of 500 million US dollars, or providing more than 3000 jobs, begin to implement the special preferential policy of "four exemptions and nine half reductions", that is, four-year tax exemption and nine-year half tax collection

 

        Until April this year, Vietnam's trade performance remained strong. According to the data, in the first four months of this year, Vietnam's import and export of goods amounted to US $206.51 billion, up 29.5% year on year. Among them, the export volume reached 103.9 billion US dollars, a year-on-year increase of 28.3%, and the import volume was 102.6 billion US dollars, with a year-on-year growth of 30.8%. The trade surplus in the first four months was about 1.29 billion US dollars.

 

        But since May, the supply chain and production chain have been seriously hindered by the epidemic factors, and Vietnam's economy may enter a turning point. In addition, it is also worth noting that the impact of this round of epidemic may lead to the departure of Vietnamese industries, and it will be difficult to return to Vietnam in a short period of time. In the current global environment of shortage of parts and components, it has undoubtedly exacerbated the collective panic of the industrial chain.

 

        Baoyin investment believes that this round of outbreaks in India and Vietnam has a positive impact on China's exports and the RMB exchange rate, and the impact may last until next year. On the face of it, epidemics in other countries will lead to the transfer of some orders to China, thus benefiting China's exports. However, if we only consider the order transfer, the impact of the epidemic situation in other countries on China's exports and RMB will be short-term. The deep-seated impact of the epidemic situation should be understood from the perspective of industrial chain transfer, and the impact in this respect will be more far-reaching.