ISMR October 2021 | Page 41

REGIONAL REPORT

The Asia Pacific smart manufacturing market is expected to register a CAGR of 7 . 57 % from 2021 to 2026
“ Raw material shortages , port congestion and unavailability of containers have lengthened lead times , at a time when chip inventories are already running low ,” commented analyst , ICIS .
“ In China , the world ’ s second-biggest economy and Asia ’ s biggest , factory output growth has been slowing down for the past five months , based on official data , while a private survey by media group Caixin indicated a manufacturing downturn in August . China ’ s key manufacturing PMI fell to an 18-month low in August as the country also had its recent bout of infections that prompted tightening of restrictions ,” it added .
Countries such as Indonesia , The Philippines , Thailand and Malaysia are facing severe domestic health crises and continued outbreak risks could hold back the possibility of Asian economies normalising activity and re-opening their markets in a meaningful way in 2021 .
The Vietnamese economy grew by 2.91 per cent in 2020 and 4.48 per cent in the first quarter of 2021 . The IMF is projecting very healthy growth in Vietnam ( around 6.9 per cent ). Like many countries , Thailand ’ s economy was hit hard by the COVID-19 pandemic last year . The country ’ s GDP fell by over six per cent in 2020 . Its economy is forecast by the IMF to grow at 2.6 per cent in 2021 .
“ The COVID‐19 crisis also offers an opportunity to better align development policies with climate objectives to strengthen the recovery and economic resilience , and place Thailand on a firm path to meeting climate mitigation goals . An efficient carbon pricing would encourage a gradual shift to cleaner energy alternatives , reduce greenhouse gas emissions and air pollution , and help in transitioning to a decarbonised economy ,” commented the IMF .
Korea ’ s sound economic fundamentals and decisive policy response helped it to navigate the COVID-19 shock well . It also deployed a comprehensive economic response featuring fiscal support to help affected workers and businesses , and measures to rapidly stabilise financial markets and ensure ample availability of credit . These steps helped make its downturn the smallest among advanced G-20 economies , with real GDP growth in 2020 of -1.0 per cent .
“ The Korean New Deal , the authorities ’ five-year development strategy , aims to help boost inclusive growth and facilitate post- COVID-19 structural transformation by promoting digitalisation , accelerating the transition to a low-carbon economy and strengthening the social safety net . Still on the agenda are reforms to reduce barriers to entry for new firms , stimulate innovation and tackle remaining labour market rigidities . Strengthening carbon pricing to provide robust
The Petronas Twin Towers in Kuala Lumpur , Malaysia .
incentives for green investment will also be important to achieve the objectives of the green pillar of the Korean New Deal ,” added the IMF .
Manufacturing has emerged as one of the high-growth sectors in India . The ‘ Make in India ’ programme places India on the world map as a manufacturing hub and provides global recognition to the Indian economy . The automated industrial economy has opened in Japan , and the development in Industry 4.0 is speeding up . Japan has emerged to become a manufacturing hub for factory automation products , supplying them to other regional markets in the Asia-Pacific region , making factory automation more affordable in the area .
The ten-nation Association of Southeast Asian Nations ( ASEAN ) now has a strong opportunity to move up the manufacturing value chain . The region offers one of the world ’ s largest , fastest-growing markets and has an extensive manufacturing base that spans light , heavy and high-tech industries . A new trade pact — the Regional Comprehensive Economic Partnership ( RCEP )— is expected to significantly accelerate the flow of finished goods , inputs and investment between Southeast Asia and trade partners such as China , Japan , South Korea and Australia .
Shifting production bases
In the past , when U . S ., European and Japanese companies reached a certain scale and became global , they sought ways to diversify risk . The same is now happening for Asian companies . They do not wish to have all their manufacturing capability concentrated in one country because it is not a prudent way to manage a business . For companies from any location , there has always been a need to diversify a company ’ s manufacturing base at some stage .
“ China has always been the ’ world ’ s factory ’ but increased tariffs put its goods in a disadvantageous position . This prompted Chinabased firms to reassess their supply chain strategy and search for new
ISMR October 2021 | sheetmetalplus . com | 41