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For some Asian countries where the progress of new crown vaccination is relatively slow, the rampant delta of the mutant strain of the new crown virus is having a huge impact on the production capacity of these countries' manufacturing industries. Since the export targets of these manufacturing industries are mainly European and American countries, this has also brought huge supply and demand pressures on European and American countries. Especially in the end-of-year business war this year, European and American companies may not be able to ensure the supply of a large number of low-cost products as they did in previous years. Some companies said they are considering moving their factories back to China.

Delta ravages many Asian countries, causing U.S. shoe prices to rise year-on-year in July

Asian countries such as Vietnam, Indonesia, Sri Lanka, and Thailand used to be “top students” in the prevention of the new crown epidemic. In the 1 year and 2 months after the outbreak, these countries adopted strict blockade policies, which basically blocked the spread of the epidemic in their own countries. In the early stage of the epidemic, the export business of electronic products, clothing, fitness equipment and other commodities in these countries was not substantially affected. However, the delta mutant strain made the local epidemic situation worrying.

Taking Vietnam as an example, the inoculation rate of the second shot of its new crown vaccine is less than 3%. In the past 6 weeks, the new crown virus infection caused by the delta strain has shown a trend of large outbreaks. The Vietnamese government explained: "The spread of the new crown virus is so fast that it is impossible to trace the path of infection." The Vietnamese government has issued the latest instructions to all domestic factories, requiring them to either temporarily close or significantly reduce the number of employees at work. This directive of the Vietnamese government puts Adidas, Karrochi, Steve Madden and other European and American brands that rely heavily on Vietnamese production lines into trouble.

↑A hospital in Ho Chi Minh City, Vietnam is treating people infected with the new crown virus. According to foreign media

Especially for the United States, Vietnam is the largest source of footwear products after China, and Vietnam’s footwear exports to the United States account for more than 30% of the total US footwear imports. More than 80 footwear companies such as Nike and GAP wrote a letter to US President Biden in mid-August this year, asking the US government to increase the speed of providing free new crown vaccines to Vietnam. In this letter, these footwear companies stated: "The soundness of Vietnam's footwear and clothing industry directly affects the soundness of our country's industry."

The White House did not comment on this letter. However, a person familiar with the U.S. government disclosed that after the beginning of July, the U.S. government provided Vietnam with 5 million copies of the new crown vaccine.

Supply chain experts said that Delta has allowed Asian countries, including Vietnam, to implement blockade policies, which will lead to higher costs. Therefore, it is expected that the retail prices of consumer goods in the United States, including shoes and clothing, will rise further. In July of this year, the price of domestic shoes in the United States increased by 4.6% over the same period last year.

Workers who still go to work after the factory has been laid off are required to wear masks to sleep

According to Adidas, most of the company’s factories in Vietnam have been in a state of production stagnation since mid-July this year. It is reported that 28% of the company’s products are from Vietnam factories. Affected by this, the company’s US$600 million in the second half of this year I am afraid that sales will be difficult to achieve.

It is understood that in order to maintain production, the Vietnamese government has adopted strict epidemic prevention measures for all domestic production. In some areas with extremely high infection rates, in order to prevent the spread of the virus, the Vietnamese government requires factory employees to comply with epidemic prevention guidelines when they are in the factory.

In a paper mill in southern Vietnam, where the infection has spread rapidly, workers sleep on a bed made of cardboard boxes in a conference room and are required to wear masks even when they sleep. If they want to talk to colleagues, both parties must maintain 2 The distance above meters.

The factory originally had more than 600 employees. Now, in order to avoid mass infection caused by crowded people, the factory has reduced the number of employees to 150. The remaining employees now work 12 hours a day. An employee said in an interview: "Some people can't stand such extreme isolation measures and quietly run home and no longer come. I myself have to stay in the factory to work because I have to make money to support my family."

The Ministry of Industry and Commerce of Vietnam admitted that many factories in Ho Chi Minh City, the largest city, have stopped production due to the epidemic. Due to the current movement restrictions, the still operating factories have to consider preparing dormitories for employees in the surrounding area.

According to Xinhua News Agency, data released by the Ministry of Health of Vietnam on the evening of the 27th showed that Vietnam reported 12,920 new confirmed cases of new crown that day, a record high since the outbreak; 386 new deaths were reported. Among them, the "epicenter" of the current round of the epidemic, Ho Chi Minh City, the largest city, reported 5383 new confirmed cases on the same day. As of the 27th, the cumulative number of confirmed cases in Vietnam has exceeded 410,000, and the cumulative number of deaths has exceeded 10,000.

Some companies moved their factories back to China

Among Asian countries, Vietnam's new coronavirus vaccination work started relatively late, and progress has been slow. The government stated that the reason was that it had previously thought that the spread of the epidemic had been effectively controlled, and when the Delta strain hit, there was a lack of urgency throughout the country. According to statistics from the University of Oxford in the United Kingdom, currently, only about 16% of Vietnamese people have received the first shot of the new crown vaccine, and the types of vaccines vaccinated are also very messy, including the British AstraZeneca, the American Modena vaccine, and some from Russia Waiting for the country’s vaccine.

Matthew Pony, an epidemiologist at the University of Pennsylvania in the United States, often goes to Vietnam to investigate the local epidemic situation. In an interview, Matthew said: “The Vietnamese government did not put more energy into the B plan when the A plan was carried out very smoothly. However, we must also admit that there has been a delta that is more infectious than the previous strain. No one can predict the virus strain. Its appearance surprised scientists."

Affected by the Sino-US trade friction, some European and American companies moved their factories from China to Vietnam, but now they are experiencing a huge impact from the epidemic. Most of the products of American shoe manufacturer WOLVERINE are produced in Vietnam. Now, all of the company's factories in Vietnam have been closed, which has had a huge impact on production.

The company's CEO stated that the supply chain is in an extremely unstable state due to the impact of the epidemic situation in Vietnam. In order to reduce the risk, part of the production has been transferred back to China.