Vietnam's new coronavirus outbreak has relapsed

The Secretary-General of the World Health Organization Tan Desai recently stated that in the four weeks of July, the number of confirmed cases around the world increased by 80%. Southeast Asia, which is ravaged by the Delta variant virus, is currently the most severely hit by the epidemic. The industrial output of seven Southeast Asian countries has shrunk the most since May last year, with Indonesia and Malaysia the worst.

Indonesia is now in a state of semi-blockade. In this way, the economy has been hit hard. So far, nearly 3 million Indonesians have fallen below the poverty line. Indonesian President Joko still insists that for the sake of the people's livelihood, the city will not be completely shut down, and he pointed out that the blockade may not be able to solve the crisis.

Malaysia reported 17,786 new confirmed cases on July 31, a record high. According to the Manufacturers Association, about 1.2 million Malaysians are unemployed. The Malaysian government plans to gradually restart production activities when the number of cases drops below 4000 per day. It still seems to be nowhere in sight.

US media recently reported that: "The epidemic has caused factories in South and Southeast Asia to close, increasing the risk of global supply chain disruption. American consumers may soon find that local shelves are empty." Data from the U.S. Census Bureau show that US retailers have only enough inventory on hand to maintain sales for more than a month, which is close to the lowest level since 1992.

Earlier reports said that in 2020, the new crown epidemic is pandemic globally, and many Western importers have cancelled contracts or delayed payments, which has led to the closure of many textile and garment manufacturing plants in Bangladesh and a sharp drop in output. However, the epidemic in Vietnam is well controlled, and commodity exports have risen instead of falling. In particular, textile and clothing exports reached 29 billion U.S. dollars, a year-on-year increase of 6.4%, surpassing Bangladesh to become the world's second largest textile and clothing exporter. According to statistics from the General Statistics Office of Vietnam, in the first seven months of this year, Vietnam exported 18.6 billion U.S. dollars worth of textile and clothing products, a year-on-year increase of 14.1%.

Regarding the export and production of Vietnam's textile and apparel in the second half of 2021, the chairman of the Vietnam Textile and Apparel Association stated that in the face of the huge risk of the epidemic, some overseas orders will move out of Vietnam and return to my country. Sun Weiwei, a researcher at Everbright Securities, emphasized here that although the production capacity of garment manufacturing companies with production bases in Vietnam will be adversely affected, and some factories have been suspended or low-capacity operations, the recurrence of the Vietnamese epidemic may also promote overseas orders to return to the country. Favor the local textile and garment industry.

However, the transfer of orders also brings huge risks. Since the outbreak of the new crown virus abroad, there are not a few foreign trade companies that have been affected and unable to accept orders or deliver goods. Looking back at last year, the textile industry almost stagnated due to the epidemic in the first half of the year, and then gradually recovered as the epidemic improved. However, overseas epidemics repeated this year, making the textile foreign trade market accepting orders flat. Until July, the epidemic situation further aggravated, some areas imposed strict restrictions, and orders stalled again. It is currently the textile low season, and the impact of the stagnant orders is relatively small, but it is still unknown when the order will be resumed, and everything depends on the trend of the epidemic. If the overseas epidemic situation does not improve in September, the peak season in the second half of the year may also be missed by foreign trade companies.