Asia Pacific Update: May 18
In today’s edition, key developments relate to the economic fallout in the Asia Pacific region. Japan’s economy has entered a period of recession and Thailand’s economy contracted over the past quarter. Experts are warning that the fallout is likely to continue and spread to other markets. However, the gradual recovery of the region’s manufacturing sector may help mitigate the impacts of the pandemic.
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Latest Disease Updates
- As of 10:00 SGT on Monday, 18 May, 2020 (02:00 BST / 22:00 ET, Sunday), 4,710,683 cases have been confirmed globally, with 315,174 deaths (6.7%), according to Johns Hopkins University
- The US continues to report the highest rate of infection with more than a million confirmed cases at 1,486,515, accounting for 32% of all infections globally.
- Five countries, the US, Russia, the UK, Brazil and Spain account for 53% of all cases worldwide
- Japan’s economy falls into recession: Official data shows Japan has fallen into its first recession since 2015, with the economy recording two consecutive quarters of negative GDP growth. The world’s third-largest economy contracted by 0.9% in the first quarter. The drop in GDP followed a 1.9% decline in the fourth quarter of 2019 as a tax hike and typhoons hit Japan hard – even before the pandemic shut down much of the economy. Analysts are warning the worst is yet to come as the virus continues to affect companies, households, and spending.
- Thailand’s economy contracts for the first time since 2014: Thailand’s gross domestic product has shrunk 1.8% from a year ago, according to the National Economic and Social Development Council. It’s the first contraction since early 2014. Thailand’s economy is heavily reliant on tourism and trade, both of which have taken a severe knock as countries around the world have imposed restrictions to contain the coronavirus outbreak. Data shows a near 75% fall in foreign tourist arrivals in March from a year ago.
- No evidence previous infection leads to immunity: The World Health Organization warned there is “no evidence that people who have recovered from COVID-19 and have antibodies are protected from a second infection.” The warning is in response to some governments that have suggested that the detection of antibodies to the virus could serve as the basis for an “immunity passport” or “risk-free certificate.” The WHO added studies show some recovered patients have very low levels of neutralizing antibodies in their blood.
- India extends lockdown to end of May but lifts some restrictions: Schools, malls and other public places will remain mostly closed until the end of May but India is easing its nationwide lockdown to allow some shops to re-open, although with restrictions such as 50% of workers, having to wear face masks, and having to practice social distancing. The relaxation will not apply to hundreds of hotspots and containment zones across the country. Shops in single and multi-brand malls will not be allowed to re-open.
- Thailand: Thailand has extended its ban on passenger flights for another month to June 30, citing the need to contain the spread of the coronavirus disease. (Bangkok Post) Thai citizens rushed back to shopping malls across the country on the first day out of lockdown on Sunday as business operators adopted disease prevention and crowd control measures to mitigate the risk of a second wave of COVID-19 infections. (Bangkok Post)
- Australia: Australia has reported a surge in coronavirus-fueled unemployment, with nearly 600,000 jobs lost in April. (Nikkei Asian Review)
- Indonesia: President Jokowi has said he will not yet ease the large-scale social restrictions (PSBB) and that the government is committed to keep residents productive and safe at the same time in a ‘new normal’ of COVID-19. (Jakarta Post) Indonesia’s Health Ministry announced that all Indonesians and foreign nationals entering the country will need a health certificate from the country of origin certifying a negative COVID-19 test result. (The Straits Times)
- Hong Kong SAR: The number of job vacancies for university graduates in Hong Kong SAR has been more than halved and the average salary could be slashed by up to 20% following the fallout from both the protests and coronavirus pandemic. (South China Morning Post)
- India: The total number of coronavirus cases rose to 85,940 on Saturday, taking it past China, despite a strict lockdown enforced since late March. (Nikkei Asian Review)
Recovery in Progress: Manufacturing
Each Monday, we focus on the recovery and reopening of borders, countries and businesses. Today, we look at efforts to restart manufacturing in the Asia Pacific region.
- The production of consumer electronics has resumed across the region
- The strong demand for medical supplies and equipment is the bright spot in manufacturing in Asia Pacific
- Other markets are gearing up to re-start manufacturing with mandatory adoption of hygiene and safe distancing measures
As countries continue to fight COVID-19, the manufacturing of essential medical supplies and personal hygiene products is on the rise.
Kao Corporation, a personal care conglomerate in Japan, has ramped up disinfection production capacity by more than 20 times to address growing demand. The company has also observed recovery in China for its products.
A bio-refinery in Australia re-opened at the end of April to produce ethanol – a key ingredient in sanitising products – to meet rising demands.
In Singapore, biomedical manufacturing saw growth, with pharmaceutical output growing by 126% due to higher production of pharmaceuticals components and biological products.
Malaysia’s manufacturers of medical supplies are operating at full capacity: the country delivers 65% of the world’s rubber medical gloves, in part due to its 1.7 million hectares of rubber plantations.
Consumer electronics is a bright spot in the resumption of manufacturing in the region.
Apple moved the production of over 3 million AirPods units to Vietnam in Q2 2020, the first time these units will be produced outside China. Vietnam’s ability to maintain a low case count despite sharing a border with China has inspired business confidence, which will likely lead to a further increase in foreign direct investments in manufacturing.
In Malaysia, the gradual relaxation of distancing measures has enabled companies such as Sony, Panasonic and Sharp to resume operations. These manufacturers are striving to restore normal production and mitigate delays caused by earlier plant closures.
Taiwan Semiconductor Manufacturing Co. (TSMC), Taiwan’s largest company, sustained production throughout 2020, reporting a 91% year-on-year jump in net profit. S&P Global Ratings has maintained Taiwan’s AA- rating, citing its “dynamic and highly competitive” electronics manufacturing sector as a likely driver for a strong economic recovery.
South Korea’s domestic manufacturing sector continued to record modest growth for its third consecutive quarter through Q1 2020. Driven by demand for semiconductor components, capital goods supply jumped by nearly 25%. The nation’s manufacturing sector has also been able to benefit from the growing demand for medical diagnostic tool kits, semiconductor manufacturing materials, and plastic products.
Over 1,800 factories were permitted to re-open in Yangon in Myanmar at the end of April. provided they adopted COVID-19 preventative measures. Any factories that refuse to follow such preventative measures will face prosecution.
Thailand’s Prime Minister Prayuth Chan-Ocha has highlighted the importance of factories reopening in inspiring consumer confidence and restarting the nation’s economy: “If workplaces reopen, there will be employment and salaries… If factories reopen and employ people, rehabilitation will start.”
About COVID-19 News Roundup:
- The content of this news bulletin is a summary of publicly available news articles on events and developments related to COVID-19.
- The views and opinions reflected by these headlines do not necessarily represent those of Weber Shandwick.