The number of infections is increasing in several Asian countries. Supply chains for electronics, chips and cell phones could tear. China, of all places, should help now.
Dhe new waves of corona in Asia are threatening the supply chains: In India there are more and more ports being interrupted, in Vietnam the production of mobile phones is at risk, the logistics hub Singapore is facing another hard lockdown, in Taiwan the focus is on semiconductor production. In Asia, more and more people are suffering from the virus, especially since vaccination rates are still low compared to the industrialized countries of the West. Vaccines, however, remain in short supply, also because New Delhi is not meeting its delivery commitments. The number of infections is sometimes lower than during the corona waves in Germany, but there are still serious economic consequences.
With officially 27 million corona cases and far too little vaccine, more people are currently dying in India than in any other region. This has a massive impact on Asia’s third largest economy, but is no longer limited to it. The further rampant second wave of the deadly coronavirus will likely develop into a major disruptive factor for the shipping and logistics industry, “because several ports around the world are refusing entry to ships that were previously in any port along the coast of South Asia,” warns Standard & Poor’s. The world port of Singapore, but also the hub of Fujairah in the United Arab Emirates, have prohibited ships from South Asia from changing teams.
Big worries in Vietnam
New sources of fire are now flaring up in Southeast Asia. The Singapore financial center is suffering from new “clusters” and has since canceled the two major conferences, the Shangri-La Dialogue and the World Economic Forum (WEF). Their orientation was intended to herald the return to a new normal. But the focus is on concerns about Vietnam, where more and more foreign companies – from Bosch to Samsung – are producing. In the past few days, employees from a good ten foreign manufacturers, including Samsung Electronics and Canon, have tested positive for the Indian variant. The head of the World Health Organization (WHO), Kidong Park, warned of a “worrying variant”. In the two worst affected provinces, Bac Giang and Bac Ninh near the capital Hanoi, there are more than 20 industrial zones with many foreign investors. Samsung has more than half of its global smartphone production in its factories in North Vietnam. Both regions are in lockdown, field hospitals are set up.
The tourist paradise Thailand, which most recently reported around 2,700 infections within one day, is the fourth of the six leading countries in the region to report a further meltdown in the economy for the first quarter. In the meantime, the government of Southeast Asia’s second largest economy expects only 1.5 percent growth in 2021, previously it had hoped for 3.5 percent. The export of services, which is determined by tourism, was 64 percent below the previous year’s figure in the first quarter. While Thailand’s economic output fell by 2.6 percent year-on-year by March, it fell by 4.2 percent in the Philippines, by 0.7 percent in Indonesia and by 0.5 percent in Malaysia. In Malaysia, important for electronics manufacturing, the government has imposed another severe lockdown.