This is the first large-scale outbreak in Vietnam since the global outbreak of the new coronavirus in 2020. The epidemic is still spreading rapidly in northern Vietnam.
1 Emergency! After India, the epidemic broke out in Vietnam
Previously, the number of confirmed cases of COVID-19 in Vietnam was around 150 per day, but the number of confirmed cases has been rising recently. According to the Ministry of Health of Vietnam, as of 6:00 on May 26, Vietnam had a total of 5,931 confirmed cases of COVID-19, including 4,442 local cases and 1,489 imported cases. At present, the epidemic has spread to more than 30 regions among 63 provinces and cities in Vietnam, including the capital Hanoi.
Source: World Real-time Statistics
It is worth noting that at the end of April, a total of nearly 2,800 people in Vietnam had been infected with the new crown. These include hundreds of workers. Due to the concentration of outbreak infection clusters, the two northern provinces of Vietnam have become the “epicenter” of the new wave of epidemics, and the risk of infection is also increasing.
In order to curb the continued spread of the epidemic, Vietnam’s capital Hanoi, Hai Duong Province, Bac Ninh Province, Da Nang City and other places have also introduced emergency prevention and control measures to prohibit crowd gatherings activities; in addition, Vietnam has also expanded blockade measures in the northern industrialized region.
In addition to the rapid spread in densely populated places, another factor that has caused this round of epidemic to be out of control is the low vaccination rate of the new crown vaccine.
Vietnam’s Deputy Prime Minister stated at the end of April that preparations should be made to deal with 30,000 people in Vietnam being infected with the new coronavirus. In addition, it is also required to strengthen the management of isolation places, strengthen vaccine imports, and accelerate the development and production of vaccines in Vietnam.
Vietnam has almost completely closed its borders since March 2020. Only citizens and a few foreign experts are allowed to enter Vietnam, and they need to stay in a hotel after arrival. Or quarantine in designated places.
Data show that in Vietnam, with a total population of about 96 million people, about 1 million doses of the new crown vaccine have been administered, but only nearly 30,000 people have completed two doses. Vaccination.
Therefore, in order to speed up vaccine supply and vaccination, Vietnam plans to produce the Russian Sputnik V COVID-19 vaccine this year. A few days ago, Vietnam’s Ministry of Finance also stated that it will set up a VND25.2 trillion (US$1.1 billion) fund to purchase 150 million doses of the new crown vaccine for its citizens.
Kidong Park, chief representative of the World Health Organization in Vietnam, said that against the backdrop of the complex and severe COVID-19 epidemic in Vietnam, Vietnam’s epidemic prevention and control will enter a critical stage in the next few weeks. stage.
2 Collapse! Many industrial parks have been temporarily closed, and the industry has been severely affected
The epidemic has accelerated its spread, and with it, Vietnam’s industrial supply chain and production chain have been severely hampered.
Vietnam’s “Customs Online” website reported on May 24, 2021 that in order to ensure the progress of Vietnam’s textile production and export, the Vietnam Textile Association (VITAS) recently recommended in writing that the Prime Minister of Vietnam and the Ministry of Health assist Vietnamese textile companies purchase and vaccinate against COVID-19 on their own.
The Vietnam Textile Association pointed out that Vietnam’s textile industry employs more than 3 million people, and many companies have tens of thousands of workers. Exports are expected to reach US$40 billion in 2021. Under the current complex situation of the COVID-19 epidemic, there are huge risks in factory operations and production.
If the company is suspended or quarantined due to the epidemic 14- On the 21st, the full-year production plan was almost broken. At present, many companies have export orders in hand, and even the orders are fully booked throughout the year. If they cannot complete the orders on time, they may have to pay large liquidated damages or have their orders cancelled. By then, the Vietnamese textile industry may lose billions of dollars, and companies may face closure or bankruptcy. risks, and a large number of workers face the dilemma of losing their jobs and their source of income.
Therefore, the Vietnam Textile Association recommends that the government and the Ministry of Health give priority to vaccinating large-scale textile companies with dense workers in the epidemic areas. It also recommends that the government organize vaccine supplies through multiple parties and give priority to textile companies through Social purchasing methods will promote vaccination as soon as possible.
In addition to Vietnam’s textile industry, the current situation of Vietnam’s electronics industry chain is also full of crises. According to the official letter No. 680 issued by the Vietnamese government on ensuring the safety of the new crown epidemic prevention and control in industrial zones, Vietnam There are 300 industrial parks and 70,000 factories nationwide.
Many companies such as Samsung, Luxshare Precision, Foxconn, and Haineng Industrial have suspended local production, and some companies’ businesses have also been affected.
Source: Public information, incomplete compilation of flash memory market ChinaFlashMarket
Bac Ninh Province, where Samsung Electronics’ production base is located, has begun to implement curfews and Other travel restrictions; the Samsung factory in Bac Giang City also suspended operations after more than 40 employees tested positive. Data shows that Vietnam, as Samsung’s largest overseas production base, has invested more than 17 billion U.S. dollars so far (People’s(approximately more than 120 billion yuan), and established four subsidiaries.
In addition, Ba Giang Province in northern Vietnam has also temporarily closed four industrial parks: Van Trung, Quangzhou, Dinh Chan and Sungai-Naihuang, with a total of hundreds of factories suspended. Production, more than 130,000 employees are affected.
3 Panic! How big is the impact?
A few days ago, the World Bank stated in a macroeconomic report on Vietnam that since the end of April 2021, the outbreak of the epidemic in Vietnam has forced Vietnam to introduce epidemic prevention and control measures, which will have a negative impact on Vietnam’s domestic economy. activities, especially in tourism, transportation and retail sectors.
In recent years, a large number of manufacturing companies have begun to set up factories in Vietnam. In addition to American, Japanese and Korean companies, various labor-intensive Chinese companies in textile, manufacturing, electronics, etc. They also ran over.
The reason behind this is that in addition to its lower labor costs, there are also a series of attraction policies in Vietnam. For example, for investments reaching US$300 million, or annual Enterprises with sales reaching 500 million U.S. dollars or providing more than 3,000 jobs will begin to implement the special discount of “four exemptions and nine half reductions”, that is, tax exemption for four years and only half tax for nine years…
Until April this year, Vietnam’s trade performance was still strong. Data show that in the first four months of this year, Vietnam’s merchandise import and export volume reached approximately US$206.51 billion, a year-on-year increase of 29.5%. Among them, the export value reached US$103.9 billion, a year-on-year increase of 28.3%, and the import value was US$102.6 billion, a year-on-year increase of 30.8%. The trade surplus in the first four months was approximately US$1.29 billion.
However, since May, due to the constraints of the epidemic, the supply chain and production chain have been severely hampered, and Vietnam’s economy may have entered a turning point.
It is also worth noting that the impact of this round of epidemic may trigger an exodus of industries in Vietnam, and it will be difficult to come back in a short time. In the current global shortage of parts and components, it has undoubtedly intensified the collective panic in the industrial chain.
Baoyin Investment believes that this round of epidemic outbreaks in India and Vietnam will have a positive impact on China’s exports and the RMB exchange rate, and this impact may last until next year. On the surface, the epidemic in other countries will cause some orders to be transferred to China, thus benefiting China’s exports. However, if we only consider the transfer of orders, the impact of the epidemic in other countries on China’s exports and RMB will be short-term. The deeper impact of the epidemic should be understood from the perspective of industrial chain transfer, and the impact in this aspect will be more far-reaching. </p
