Businesses around the world are re-examining their sources for many types of goods due to supply issues related to the COVID-19 pandemic.
Many companies – from multinational clothing makers to electronics manufacturers – are considering importing from other countries as they move away from China.
China has been hit hard by the pandemic and the government has implemented a “zero-COVID” policy. This led to widespread problems around the world Supply Chain.
Experts say this means countries in Southeast Asia and Latin America are becoming new hotspots for much-needed goods.
Jayant Menon is a Visiting Representative of the Area Economic Studies Program at ISEAS-Yusof Ishak Institute in Singapore. He told VOA that since the pandemic, traditional Chinese role that the factory of the world will be reduced. US and European multinationals will now seek parts, labor and factory processes elsewhere.
Menon said: “Countries like China which mismanage COVID will suffer a lot. He said it’s because their “zero COVID” efforts have caused major problems for supply chains.
When Southeast Asian countries – including Vietnam, Thailand and Indonesia – lifted pandemic restrictions, China implemented lockdowns in two major cities. The shutdowns affected factory orders and caused labor shortages, which drove up product prices.
South East Asia
Countries like Vietnam and Thailand were already doing business with China before 2020. This was largely linked to rising Chinese labor costs and higher taxes resulting from a trade dispute between China and China. United States.
Menon said, “I think Southeast Asia will definitely be a Beneficiary of all that re setup Take a seat.” He said countries like Vietnam, and to a lesser extent Thailand and Malaysia, “have already seen gains from restructuring supply chains.”
Menon added that Vietnam has a lead due to its skilled labor force, business-friendly reforms and a network of free trade agreements. Electronics companies Samsung and Intel both operate in Vietnam, as do foreign-owned auto factories.
Rajiv Biswas is an economist at S&P Global Market Intelligence in Singapore. He told VOA that multinationals are likely to expand their capabilities or industrial capabilities in multiple locations. But they are expected to stay in China for its market of over a billion people.
Biswas said: “They will continue to produce in China, but they will create additional production capacity in other hubs.”
In Latin America, particularly in its industrial center of Mexico, products are sold in the very important American market. Mexico is expected To keep benefiting of a process called near-shoring. This is based on the idea that since Mexico and the United States have a common time zone and similar culture and languages, it is easier for American companies to do business there than in other places. .
Evan Ellis is Professor of Latin American Studies at the US Army War College Strategic Studies Institute. He said Brazil makes sense as a place to do business for companies that need the country’s natural resources.
Ellis said Brazil could also be a good market for companies selling cars. Indeed, the country has a market of 212 million people, many of whom live in middle-class cities. Ellis noted, however, that costs and local laws can cause difficulties for investors in Brazil.
I am Gregory Stachel.
Ralph Jennings reported this story for VOA News. Gregory Stachel adapted it for VOA Learning English.
words in this story
The source – nm where does something come from
Supply Chain – nm the systems and organization involved from manufacturing a product to delivering it to a buyer
role – nm the job that someone or something has in a particular situation
mismanage – v. to manage or control (something) badly
Beneficiary – nm someone or something who benefits from something
configure – v. to arrange or prepare (something) so that it can be used
center – nm the central and most active part or place
benefit to – v. to be helped by something
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