HQTS Latest Supply Chain & Trade Updates across Asia – Report #6

With a wide range of service locations across Asia, HQTS has collected important supply chain and trade related information to help you fully understand the current situation affecting your business.

 

China
Most provinces in China have returned to normal, whilst still preparing for the possibility of a second wave of the coronavirus outbreak. Most factories and foreign trading enterprises in all major cities of China have been functioning since April 2020.

In the Hubei Province, the epicentre of the coronavirus epidemic, the worker return rate has reached as high as 99%. The government has enacted a series of preferential policies for all upstream and downstream enterprises within industrial chains to help recover work as quick as possible.

 

Bangladesh
Restriction Policies on Travelling, Logistics and Business Operation:

Bangladesh extended its nationwide lockdown until May 30th as the country saw its highest single-day death toll and a large number of new infections. Restrictions will be imposed strictly on transportation and no vehicles will be allowed on the roads except for emergency needs.

Financial and Trading Policies:

Prime Minister Sheikh Hasina launches the disbursement of 12.5 billion Bangladeshi Takas ($147 million) among 5 million families, who need the support the most. They will formally inaugurate the distribution of 2,500 Taka [$30] to each of the 50 Lakh [5 million] families affected badly due to the COVID-19 outbreak, through mobile financial services.

Import & Export Trends:

The exports of ready-made goods from Bangladesh factories in March declined by 30.19%, whilst in April such exports decreased by 77.76%. Exports between March and May in 2020 have experienced a shortfall of $4.9 billion.

 

India
The current lockdown measures in India have been extended until May 17th.

Financial and Trading Policies:

The Indian government announced a special economic package, referred to as the, 20 Lakh Crore to help revive the economy and allow India to become self-reliant, in the midst of the COVID-19 pandemic. The Prime Minister of India has announced that the 20 Lakh Crore package will focus on land, farm labourers, liquidity, taxpayers, laws, MSMEs and cottage industries. All parts of organized and unorganized sectors will be covered under this package.

There is a collateral-free MSME (medium to small scale Enterprises) loan that is being provided, which would give a facility of three lakh crore industries.

Import & Export Trends

India’s exports plunged by a record 34.57% in March, due to a steep decline in shipments of leather, gems, jewellery and petroleum products, resulting in a decrease from 2019 to 2020 by more than $314 bn, with March’s figure at $9.76 billion, the lowest in the last 13 months. This is the steepest decline since November 2015, when imports declined by 30.26%, causing the narrowing trade deficit.

 

Vietnam
Restriction Policies on Travelling, Logistics and Business Operation:

The government has allowed all non-essential services to resume but with preventive measures in place. The Ministry of Transport on May 6th relaxed social distancing guidelines on planes, buses, taxis and ships.

Financial and Trading Policies:

Vietnam’s Drug Administration issued a decision to resume the export of 37 medical supplies that were suspended on April 16th, as they were reserved for domestic use during the pandemic. Vietnam has approved to remove the regulation on export licensing of face masks by issuing Resolution 60, but has asked authorities to monitor export volumes strictly.

Import & Export Trends

As the American and EU consumers are currently already reducing expenditure on products made in Asia including, shoes, phones, appliances, clothes, cars and tools. Vietnam has seen cargo volumes down by up to 70% on pre-coronavirus levels. Vietnam’s exports are projected to have fallen by 21% in the first quarter of 2020.

 

Malaysia

Restriction Policies on Travelling, Logistics and Business Operation:

Malaysia extends its relaxed lockdown until June 9th, allowing nearly all economic activities to continue while keeping its borders shut and schools closed.

Financial and Trading Policies:

The majority of economic sectors have been allowed to resume work. The Malaysian Prime Minister mentioned that almost half of the country’s workforce has now returned to work, which is an estimated 6.64 million people. However, restrictions on religious gatherings, inter-state travel, schools, colleges and other non-essential services have not been lifted yet.

Import & Export Trends

In February exports declined by 5.3% to RM66.6bn ($16.2bn), the biggest fall since October 2016. The two key exports for the country are refined petroleum and palm oil products, they declined by 30.9% and 13.4% respectively. Electrical and electronic products, which account for 38.8% of total exports actually rose by 4.9%.

Year-on-year imports also dropped 9.4% to RM55.5bn, led by a 27% fall in imports from China.

 

The Philippines

Restriction Policies on Travelling, Logistics and Business Operation:

The President announced an extension of lockdown measures to May 31st, making it among the world’s longest community quarantine to try to limit the spread of the coronavirus pandemic.

Financial and Trading Policies:

Manila, Laguna and Cebu will remain under lockdown, but nationwide restrictions will be modified in a three-tiered plan to ease restrictions in many areas and restart the Philippine economy.

Import & Export Trends:

In January, electronic products, the Philippines’ largest export commodity, increased by 15.8% to $3.2 billion. A weakened global supply chain has caused a decline in demand due to the coronavirus pandemic. The reduction in electronics exports will likely be a major factor in the export sector in 2020.

 

Singapore

Restriction Policies on Travelling, Logistics and Business Operation:

Singapore has allowed some businesses to reopen, as the city state takes its first steps towards resuming economic activity after weeks under a near-total coronavirus lockdown.

Financial and Trading Policies:

Businesses such as food manufacturers, barbers, food retail outlets and laundry services resumed operations following a drop in locally transmitted infections in the city state. Businesses that have been allowed to reopen must adhere to tighter safety measures including spacing out employees and avoiding staff gatherings.

Import & Export Trends:

It is forecasted that Singapore’s 2020 trade balance will reduce substantially due to the impact from the coronavirus pandemic. It is expected in 2020, that exports will contract 10% and imports will contract 8.5%.

 

Indonesia

Restriction Policies on Travelling, Logistics and Business Operation:

Indonesian officials have begun discussions about reopening its economy in phases starting from next month, while social-distancing measures are expected to remain in Indonesia until the end of May.

Financial and Trading Policies:

The Coordinating Ministry of Economic Affairs discussed an “exit strategy” from the partial lockdown imposed in the large cities, including the greater Jakarta area. The strategy calls for social distancing rules to be removed in five phases and it is anticipated that the economy will be completely restored by late July or early August.

Import & Export Trends

Indonesia recorded a total of $13.94 billion in exports in February 2020, an 11% increase from the previous year, while total imports fell 5.11% to $11.6 billion, due to declining imports from China. Indonesia’s manufacturing exports recorded the largest growth, increasing 17.11% annually in February to $11.03 billion, while oil and gas exports reduced by 26.51% to $820 million.

The decline in the country’s imports effected all types of products, namely consumer goods, raw materials and capital goods amid a decline in shipments. The most affected imported products were machinery, electrical and mechanical appliances and plastic goods.

 

Thailand

Restriction Policies on Travelling, Logistics and Business Operation:

Thailand remains under a state of emergency until at least the end of May, with a ban on inbound international flights.

Financial and Trading Policies:

Thailand plans to fully reopen its economy in four phases and the businesses that reopen must meet new safety guidelines to prevent a resurgence of the novel coronavirus. Certain businesses have been allowed to reopen under strict social distancing and hygiene limits.

Import & Export Trends

Thai exports to the US contracted 2.7% on a year-on-year basis in 1Q20 caused by COVID-19.

Currently, more than 60% of Thai exports to the US are semi-finished and luxury finished products. It is expected that Thailand’s trade to the US may decline by 9.2% to $28,467 million, representing the first contraction in 10 years since 2009.

 

Pakistan

Restriction Policies on Travelling, Logistics, and Business Operations:

Pakistan extends partial lockdown to May 31st due to the number of COVID-19 infections rising to over 34,000. All industries which are included in the second phase of the construction sector, factories which are not included in the negative list, including the export industry, all retail shops, community markets and small shops excluding large shopping malls, all parks, trails, golf clubs, tennis courts and similar facilities with no public gatherings are now allowed to remain open for business. However, public transports will remain shut, Pakistan is developing a special flight schedule, with at least 11 domestic flights in operation, as part of fifth phase of repatriation plan from May 11th to May 21st.

Financial and Trading Policies:

Pakistan government has lifted the ban on import of medicines and raw materials from India and other countries to ensure there is no shortage of essential drugs amid the pandemic. They are importing life-saving drugs and vitamins from India as cases of COVID-19 and other ailments continue to rise In Pakistan.

Import & Export Trends

In the first half of 2019 to 2020 fiscal starting from July 1st showed that Pakistan’s exports to India during the period came in at a low of $16.8 million, compared to $213 million in the first half of 2018 to 2019. Imports in Pakistan decreased to 507729 PKR Million in April from 525410 PKR million in March of 2020. Exports in Pakistan decreased to 157412 PKR million in April from 287411 PKR million in March 2020.

 

Tradeshow and Exhibition Postponed or Suspended in Asia

  • Food & Hotel Asia in Singapore, March 3rd – 6th: Organisers of the biennial trade show have postponed its first show to July.
  • POC2020, March 2nd – 4th: Bursa Malaysia Derivatives has postponed the Palm and Lauric Oils Price Outlook Conference & Exhibition 2020 to June 22nd – 24th.
  • East China Import and Export Commodity Fair, March 1st – 4th was due to be held in Shanghai, the fair usually attracts traders of garments and household goods. It was postponed until further notice.
  • Asian Ferroalloys, March 16th – 18th: The conference by Fastmarkets was due to be held in Shanghai, has been postponed with no new date given.
  • LME Asia Week 2020, first week of May: The London Metal Exchange’s event in Hong Kong, an annual gathering of the metals industry, could be postponed due to the coronavirus.

Canton Fair, spring season from April 15th: The venue of China’s oldest and biggest trade fair said it has suspended exhibitions until further notice.

About HQTS

With over 25 years of experience in quality assurance, HQTS is ready to help your business build meaningful and robust supplier relationships across Asia. Our many service locations are prepared to be your one-stop-shop for your inspection needs, including factory audits, production monitoring, pre-shipment and sorting inspections, and everything in between. This will allow you to know exactly what’s happening on the ground and keep close tabs on your suppliers. Contact us today to find out how we can help you navigate current quality control challenges.

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