The epidemic in Southeast Asia is raging, and manufacturing orders may return to China. What are the inspirations for fastener companies?
The delta virus, a mutant strain of the new coronavirus, is sweeping the world. The number of newly infected cases in many Southeast Asian countries continues to hit new highs, making it one of the most severely affected areas in the world. Southeast Asia, where the vaccination rate is low and the epidemic control is not in place, has had a huge impact on the global supply chain.
The delta virus, a mutant strain of the new coronavirus, is sweeping the world. The number of newly infected cases in many Southeast Asian countries continues to hit new highs, making it one of the most severely affected areas in the world. Southeast Asia, where the vaccination rate is low and the epidemic control is not in place, has had a huge impact on the global supply chain. Manufacturing industries such as apparel, textiles, and semiconductors are at risk of disruption. Orders continue to flow out, which has a huge impact on the Chinese economy and global supply chain.
As the world's fourth most populous country and Southeast Asia's largest economy, Indonesia suffered its second major outbreak this summer. As of the 18th, the number of confirmed cases of new coronary pneumonia in Indonesia rose to 3,908,247, with 15,768 new confirmed cases in Indonesia, and a total of 121,141 deaths. The Indonesian government announced the fifth extension of emergency restrictions, which will be implemented until the 23rd of this month. According to the data of the Indonesian Small and Medium Enterprises Association, the epidemic has caused more than 30 million small and medium-sized enterprises to close down. The largest cross-border fast fashion giant, the Chinese brand SHEIN, has stopped operations in Indonesia on July 29.
The latest wave of the epidemic in Malaysia began in July, and the closure of the city is currently being extended indefinitely. In the global semiconductor market, Southeast Asia accounts for 27% of the global industry share, while Malaysia accounts for as high as 13%. Due to regulatory policies, some semiconductor companies still need to close some production lines according to government demands, and the situation is further severe for the industrial chain with tight production capacity.
This round of epidemic outbreak in Vietnam has also reached the most critical state. It has been determined to extend the blockade of the capital Hanoi until August 22, and Ho Chi Minh City will be blocked until September 15. As of the 18th, there were 180,272 confirmed cases in Vietnam, with a total of 302,101 confirmed cases and 6,770 deaths. Affected by this wave of the new crown epidemic, the number of closed manufacturing companies in Vietnam has increased significantly. In the first half of the year, the number of companies that closed down in Vietnam reached 70,209, a year-on-year increase of 24.9%. Among them, the textile industry, a pillar industry in Vietnam, was seriously damaged, and 35% of enterprises were forced to close down.
The current delta variant strain has spread to the whole of the Philippines. Manila, the capital of the Philippines, has re-entered the lockdown since August 6. As of August 19, there were 105,151 new confirmed cases in the Philippines, with a total of 1,776,495 confirmed cases and 30,623 deaths. . In the locked-down Philippines, only businesses in essential livelihood industries can operate and work normally. During the lockdown, only one person in a household is allowed to go out to buy necessities, and many residents face unemployment.
On August 16, the Thai government's New Coronary Pneumonia Epidemic Management Center notified that it would extend prevention and control measures such as "closure" and curfews in 29 of the country's 29 highest-level epidemic control areas, including the capital Bangkok, until August 31. In terms of work arrangements, it is required to continue to work from home, do a good job in internal isolation places, and implement closed management for more than 100 employees. On August 20, a mini-free trade agreement was signed with Hainan Province of my country, which will create more business opportunities for Thai enterprises, especially small and medium-sized enterprises, not only in traditional trade and investment, but also in extensive cooperation in cross-border e-commerce.
At present, the epidemic in Southeast Asia is raging. For China, it is both a crisis and an opportunity. Although the epidemic has brought factory operations in Southeast Asia to a standstill, it has increased risks to the end of the global supply chain. However, as we all know, China's industrial chain has the most complete industrial system in the world, and the supporting capabilities of upstream and downstream of the industrial chain are second to none in the world. Coupled with the scale effect and agglomeration effect of China's entire manufacturing industry, the competitive advantage is very obvious. In the face of the epidemic, the strict and efficient prevention and control measures taken by the Chinese government not only won the heartfelt support of the Chinese people, but also quickly controlled the spread of the epidemic. At present, the epidemic situation in Southeast Asia is raging, and China is naturally the best choice for buyers to transfer orders. At present, many Southeast Asian orders have returned to China.
As an important part of the manufacturing industry, the fastener manufacturing industry is still in the stage of strong export demand. According to the statistics of the General Administration of Customs: in July 2021, the domestic export volume of fasteners was 397,751 tons, a year-on-year increase of 4.9%; the cumulative export volume from January to July was 2,658,985 tons, a year-on-year increase of 20.9%.
The terminal demand for fasteners is strong. Under the background of global carbon compliance and carbon neutrality, the manufacturing industries such as new energy energy saving and environmental protection equipment, rail transit equipment, construction machinery, large ships, and aerospace equipment represented by wind power are thriving, and downstream industries The booming development of China has a direct impact on the expansion of the market demand for upstream high-strength fasteners.
my country promotes the "Made in China 2025" strategy and implements the "Strengthening Industrial Foundation" project. As the basic industry of high-end equipment manufacturing industry, high-strength fastener manufacturing is an important link of strategic emerging industries. The country's emphasis on the wind power industry has provided strong policy support for the development of the fastener industry. Fastener enterprises can seize the "crisis", absorb and introduce advanced technologies at home and abroad, continuously carry out intelligent transformation of production lines, strengthen R&D cooperation and their own technology accumulation, and have made progress in high-end fastener production technology and technical level difficulties. Gradually realize the mass production and distribution of key components in the high-end equipment manufacturing industry.