Troubled times, ready to explode! Beware of foreign trade risks in various countries profile-avatar Yige Technology

Unconsciously, 2021 has entered the fourth quarter. In the first half of the year, the total value of China's mainland trade in goods imports and exports also hit a record high for the same period, with a total import and export value of 18.07 trillion yuan, a year-on-year increase of 27.1%. Although the performance of trade imports and exports is very impressive, foreign trade risks still exist, and foreign trade people cannot take it lightly. So what are the specific risks and which countries are at risk? Foreign trade people continue to read on!

Currency Risk - Myanmar

On September 3, 2021, the Central Bank of Myanmar issued an announcement that it would force Myanmar exporters to sell temporarily idle US dollars in their accounts to Myanmar banks with foreign exchange management rights at market prices within the next four months. This policy caused the market exchange rate to fall to the bottom! The exchange rate of RMB to Myanmar kyat was close to 1:300. However, there is no lowest, only lower. On September 5, the exchange rate of Myanmar against the US dollar in the Myanmar foreign exchange market fell to 1860 Myanmar kyat to 1 US dollar, which set a record low in history.

Due to the depreciation of the Myanmar currency, the prices of goods imported from mainland China have all increased by about two times !

Economic Crisis - Sri Lanka

According to the Sri Lankan Ministry of Health report on October 8, Sri Lanka has a total of 524,000 confirmed COVID-19 cases. Due to the recurrence of the epidemic and the economic storm, foreign exchange reserves are about to be exhausted . The Sri Lankan government is facing a serious fiscal crisis, with a sharp drop in national revenue, which is not even enough to cover regular expenditures. The government has decided to strictly limit national expenditures.

Sri Lanka's Finance Minister informed the Cabinet that recurrent expenditure this year may exceed the estimated amount due to vaccination, additional expenditure in the health sector and provision of relief allowances. The Ministry of Finance has instructed the secretaries of all ministries to suspend all construction, building renovation and other projects, as well as recruitment for all state services.

Afghanistan

On September 6, 2021, the Taliban announced at a press conference held at the media center in Kabul, the capital of Afghanistan, that with the control of Panjshir Province, the war in Afghanistan has officially ended. In order to ensure the safety of local residents, the Taliban has ordered soldiers to stop firing into the air.

Although the war in Afghanistan has ended, it will take time for all operations to resume.

Government Crisis - Romania

On October 5, the Romanian Parliament passed a motion of no confidence in the government led by Prime Minister Cuczu by a majority vote. The Cuczu government, which has been in power for less than 10 months, needs to step down.

In order to use the MRR financing instrument, each EU member state must develop its own Recovery and Resilience Plan (PNRR), which lists its priority investment areas to emerge from the crisis, revive the economy and improve resilience. Romania is currently working on this phase.

But Romania's current political instability poses a risk to reducing the budget deficit, and the collapse of the ruling coalition could undermine fiscal consolidation efforts. This would make it more difficult for Romania to obtain loans , which would be a negative signal for attracting foreign investment.

Military coup risk - Guinea

At about 8 a.m. on September 5, 2021, bursts of gunfire were heard in Conakry, the capital of Guinea. Local residents said that the gunfire occurred in the Kaloum district where the Guinean presidential palace and the Ministry of Defense are located. The coup leader, Colonel Mamadi Doumbouya of the Guinean Special Forces, issued a statement on national television saying that the coup forces have seized state power and detained Conde, and announced the dissolution of the current government. Ministerial officials of the Conde government are not allowed to leave the country without permission, and the passports and official vehicles of these officials are all kept by the military.

Guinea is a major aluminum ore exporter, but due to the recent coup, this could pose a threat to the global aluminum industry .

Risk of shutdown - Vietnam

According to the report of the Vietnamese Ministry of Health on October 3, Vietnam reported 5,383 new confirmed cases of COVID-19, including 1 imported case and 5,382 domestic confirmed cases; 27,683 new cases were cured and discharged; and 130 new deaths.

In order to control the further spread of the epidemic, the Vietnamese government has taken a series of tough and strict epidemic prevention measures, such as restricting residents' travel, which has dealt a heavy blow to Vietnam's economic activities and has severely affected Vietnam's manufacturing industry.

Due to the lockdown, many manufacturing companies such as electronics, chips, textiles, and mobile phones are in a state of suspension and production , which has been greatly affected. Vietnam's manufacturing industry is facing three major crises: loss of workers, orders, and capital. This has not only made a number of investors take a wait-and-see attitude towards investing in Vietnam, but has also seriously affected the development of Vietnam's current manufacturing industry.

Risk of a surge in cases - Bangladesh

As of September 7, 2021, Bangladesh has confirmed more than 1.51 million cases of COVID-19, with more than 26,000 deaths and more than 30,000 confirmed cases. In addition to the COVID-19 pandemic, the number of dengue cases in Bangladesh has also been rising. According to the Dhaka Tribune of Bangladesh on September 23, citing the Bangladesh Health Department, as of September 23, Bangladesh has treated a total of 16,705 dengue patients this year.

In addition, on September 4, four suspected militants of the Islamic extremist armed group "Bangladesh Mujahideen Jamat" (JMB) were arrested in Khagdohor area of Mymensingh district in Mymensingh Division of Bangladesh, and guns and explosives were seized.

In addition, due to the epidemic, the Bangladeshi government has closed all educational institutions in the country since March 2020. On September 1, college students were attacked by unidentified assailants during a rally to demand the immediate reopening of educational institutions.

Bangladesh continues to be on alert for public health security, demonstration conflicts and terrorism risks.

Risk of severe economic damage-Thailand

The COVID-19 outbreak has hit the world. To prevent the spread of the virus, many countries have begun to restrict travel, which has not only dealt a heavy blow to Thailand's tourism industry, but also affected economic development. The epidemic, which has lasted for more than a year, has hit Thailand's tourism industry hard and has left 6 million Thais unemployed . On city streets, a large number of shops have closed.

Risk of production disruption-India

According to the latest data, India has confirmed more than 34.03 million cases. As the outbreak in India has never been completely controlled, the Indian market has shrunk, and with the infection of workers, production efficiency has continued to decline. In order to prevent the further spread of the epidemic, the local government has ordered many areas in the country to be closed for a limited time. Well-known domestic electronics factories such as Wistron, Foxconn, and MediaTek all have foundries in India, and their factory shipments have been greatly affected by the epidemic.

Due to the instability of the epidemic, many small and medium-sized factories were forced to temporarily close or directly declare bankruptcy because they could not bear the losses . Many overseas orders were also seriously affected.

In this turbulent era, foreign trade people must be aware of risks in advance to avoid losing the company they have worked hard to run. In any case of change, they can get out of it safely and reduce losses!