The COVID-19 epidemic has snowballed, and the measure of city-shutdown management has been implemented successively in Beijing and Shanghai. Officials from the Ministry of Economic Affairs (MOEA) have pointed out that Taiwanese businesses have invested about 9,029 cases in the semi-closed municipalities of Beijing, Shanghai, Tianjin, and Chongqing, totaling more than NT$1.13 trillion, and the ministry is actively looking into the extent of the impact. The epidemic has also disrupted the pace of the resumption of work by Taiwanese manufacturers after the Chinese New Year. As further noted by officials, only a few large-scale Taiwanese manufacturing plants have now resumed working. Even so, in these factories, the production lines have only recovered 20% to 30% and these manufacturing plants have to consider if their downstream supplying factories have already gone back to full operation.

 

        The storm from COVID-19 has resulted in an industry chain-rupture crisis, and the report released by the Development Bank of Singapore (DBS) indicates that the textile and electronics industry around the world has been hit the hardest. Besides, the impact of the epidemic on economic activity may cause negative spillover effects in Asia, whereas Taiwanese, Korean, and Vietnamese plants will bear most of the brunt.

 

 

        Ma, Ti-Ying, senior DBS economist, has said that South Korea has the highest dependence on exporting intermediate products to mainland China, with more than 40% of the related export products to mainland China. As for Vietnam, its dependence on intermediate products from mainland China is relatively high, with more than 30 % of the intermediate products imported from mainland China. Nevertheless, Taiwan, South Korea and Vietnam will be the hit the hardest regardless if there is a delay from downstream production or a shortage of upstream raw material.

 

             Lin Bo-Feng, chairman of the Chinese National Association of Industry and Commerce (CNAIC), said that Taiwan’s exports to the mainland account for 40%. With the severe epidemic situation, it would severely affect transportation, as raw materials cannot be delivered, and the finished products cannot be produced. In view of such a fact, Lai Zheng-zheng, chairman of the General Chamber of the Republic of China, has indicated that there is a gap of nearly three weeks between the timing of the actual and anticipated resumption of work, as well as a shortage of the supply chains. However, Taiwanese manufacturers remain quite flexible and they believe the problem can be solved. (News source: Commercial Times)