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Chinese journals estimate the economic losses of Vietnam.

Chinese journals estimate the economic losses of Vietnam.

Tuesday 25, 02 2020
“Vietnam is suffering from less economic losses than China”, Adam McCarty, Head Economic Expert at Mekong Economics said.

The epidemic is cured, but the concerns are not over

Even though Vietnam has successfully cured all 16 cases infected with Covid-19, this epidemic is still having immense impacts on the economy, as factories are struggling to maintain the necessary amount of raw materials from China. “Vietnam is suffering from less economic losses than China”, Adam McCarty, Head Economic Expert at Mekong Economics said. “Schools still have not reopened, the number of tourists remains too low, and 20% of workers may become unemployed.

Ever since the epidemic started at the end of last year, Vietnam has proposed several effective measures to prevent the contagiousness, including prolonging the Lunar New Year holiday in tens of cities and temporarily stop trade with China at several Northern border gates. Some checkpoints have been reopened, yet all truck drivers coming into Vietnam from China still have to wear gloves and masks, and it is not always possible for them to leave the vehicle arbitrarily.

According to the Vietnam Railway Corporation’s report, their revenue in the first 19 days of February dropped by 2.8 million USD over the same period last year, partly because of the compensation for nearly 40,000 unused tickets.

Tens of thousands of workers in China have been quarantined after returning to Vietnam after the Lunar New Year holiday, including around 10,000 people in Son Loi Commune which is near the border with China. Even though checkpoints have been reopened, enterprises will still have to face difficulties. At a shoe factory in Thanh Hoa Province, nearly 12,000 workers were given a 2-day break last week as the company did not have enough raw materials for them to work.

Moreover, thousands of workers at textile factories in Vietnam have gone on strike due to the worry of their Chinese colleagues carrying the Covid-19 into Vietnam after the holiday.

Chinese journals estimate the economic losses of Vietnam.

The lack of supply

Joe Buckley, an expert in labor and development of South East Asia at SOAS London University, said that many clothes and footwear manufacturers had been severely affected by the coronavirus. “One of the impacts of the coronavirus on manufacturing is that enterprises may face challenges in finding materials resource”, he said.

Some enterprises, such as Samsung, are transporting their parts via airlines to deal with shortcomings, while others have no choice but to run out of their resource. Coronavirus has significantly damaged the global supply chain. A number of foreign companies are complaining about the supply shortage due to manufacturing interruption in the 2nd largest economy in the world.

Import from China accounts for nearly 30% of the total import turnover of Vietnam. Prime Minister Nguyen Xuan Phuc said at the beginning of February that the economic growth in the first 3 months of 2020 might be 1% lower than the original goal of 6.8% of the government in this period.

​>> Vietnam’s Travel & Tourism Industry: Top 10 Companies

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Economy News

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