COVID-19, Economic Impact to SEA & Nexteck's Customers-cover tape|carrier tapes|NEXTECK

COVID-19, Economic Impact to SEA & Nexteck's Customers

Current situation

Nexteck Singapore Pte Ltd being the Head Office of www.nexteck.com in Singapore, we have internal discussion from time to to time for update to our clients of COVID-19 impact on regional economic and recovery potential.
As the first country to be engulfed in the COVID-19 pandemic, China is several weeks ahead of many other countries on the “curve” of the virus progression. While statistical methods of counting infections and deaths have differed across countries, it is generally agreed that China has the pandemic largely under control at the current stage, with increases in new cases rising at a rate of less than 100 per day. Of course there is some concern that asymptomatic cases are not being identified effectively, but the fact that the number of new symptomatic cases is low (therefore the hospitals are not overwhelmed) is acting as a kind of proxy to provide confidence to the wider population that the situation has improved dramatically.
Indeed, Nexteck Group and www.nexteck.com.sg have several production plants in China, the public mood moved on from one of fear to one of caution around late February. Since then, while many restrictions remain in place around the country, caution has morphed into mere habit. Having worn a facemask every day for close to three months now, I feel slightly naked in public without one. People are adjusting to the “new normal” and seem to realize that there is a long battle ahead. While they realize it is going to be tough, there is a general sense among the population that China will be able to manage the adaptation process more effectively than most governments around the world.

Economic impact

Meanwhile, Nexteck Technology Pte Ltd., is fully confidence on the situation of our productions in China. Nevertheless, businesspeople realize that many types of business are being seriously hit. Food and beverage, retail, real estate, and travel are the four biggest losers. A lot of people in these sectors have either been furloughed for a period of time or have lost their jobs completely. Migrant workers in the construction sector are hugely impacted. Many of these jobs don’t show up in official government figures, so while there has been a significant uptick in the unemployment rate, it is likely that the real figure is much higher. A lot of lower-earning individuals will be suffering for a prolonged period of time.
Compared with other countries, the support measures that the government has put in place have been relatively limited. The most relevant benefit to businesses has been the partial waiving of the social security contribution made by employers on behalf of staff between the period of February to June. There are other programs in place as well, but most of them require the companies applying to be involved in the effort to combat the virus spread. Loans have also been relatively difficult for many Chinese companies to obtain. The bankruptcy of many companies and major problems for account receivable collection for those that remain standing seems inevitable.

Potential recovery

At the moment certain sectors of the economy are recovering. But not quickly. Malls are open, but sparsely populated. Restaurants are open, but with very few customers. There seems to still be a kind of reluctance among people to go out and enjoy themselves, perhaps worried about opprobrium from the many that are still struggling financially or that they will be accused of potentially spreading the virus. Habits may well have changed permanently. Unsurprisingly, people are reluctant to spend large amounts of money on cars, houses etc. because of the overall uncertainty.
Certain sectors are definitely booming. This will be a worldwide phenomenon, and it in fact may play into the hands of China in the medium term. It is well-known that China is ahead in the “race to 5G”, which is all about “digital” and “remote”, which also benefied Nexteck Singapore Pte Ltd., in production and logistics during this pandemic due to the effectiveness and huge data support, China probably pulled further ahead. Online teaching and conferencing have boomed. Delivery of goods rather than visiting shops has continued its transition to the mainstream. The economy has taken another step towards modernization.
A lot of the companies that have benefited from that shift will presumably be flush with cash, and keen to invest it overseas going forwards considering the knowledge and technology they have accumulated already in China.
That is reason of optimistic and continue the step of investment in our R&D for Nexteck Singapore Pte Ltd., www.nexteck.com.sg under this situation.