Vietnam moves to block coronavirus risk to supply chain: Nikkei Asian Review

The Haiphong People's Committee acted shortly before manufacturers in Vietnam fully resume operations Monday, with thousands of workers from China possibly returning from a Spring Festival holiday extended there until Sunday.

Vietnam shares a border of more than 1,200 km with China, where the epidemic originated. Haiphong’s initiative to contain the repercussions of the epidemic came as the Chinese government seeks to cushion the impact on financial markets through such steps as a massive injection of liquidity.

Haiphong recorded gross domestic product growth of more than 16% for 2019 thanks to an influx of foreign direct investment, giving the city a greater role in the region's supply chain. But a cluster of manufacturers has come under pressure, as the World Health Organization declared the outbreak a global emergency Friday.

"Foreign companies must limit workers returning to factories in Haiphong from Hubei Province and other affected Chinese provinces," a statement posted Friday on Haiphong's municipal website said. "Areas for isolation must be arranged for those who must be present at the sites, in order to carry out health inspection and supervision."

The People's Committee convened an emergency meeting Friday morning for representatives of the 90 companies operating in the Haiphong Economic Zone that have investment from mainland China, Taiwan or Hong Kong. Most attendees represented manufacturers.

These companies employ more than 1,600 Chinese workers, including 104 from Hubei, according to Haiphong Economic Zone Authority. Haiphong hosts more than 530 foreign investment enterprises, according to local media. As many as 3,000 Chinese workers are registered across the city.

Le Van Thanh, the Communist Party chief of Haiphong, ordered a temporary ban on entry to the city by any Chinese citizen from Hubei during the epidemic effective Feb. 1, according to local reports.

The labor ministry on Sunday adopted a nationwide step asking businesses across Vietnam to keep Chinese and other foreign workers who have traveled to coronavirus-affected locations from returning at this time. Names and other information on those who have come back from China must be reported per the authorities' requests. The returnees must be quarantined two weeks for health checks, starting from the day of reentry.

Vietnam's state-owned broadcaster, citing labor ministry figures, reported Friday that 91,500 Chinese nationals had permission to work in the country before Tet, the Vietnamese Lunar New Year. At least 40% of them visited their homes in China during the holiday.

Hong Kong-based apparel maker Regina Miracle International, which operates at Vietnam Singapore Industrial Park in Haiphong, has 301 Chinese workers. More than 100 employees who have returned from Hubei are being isolated and await a further decision from Haiphong authorities, according to media.

It is unknown how this affected the resumption of operations by Regina Miracle after the Tet holiday, which ended Wednesday.

Among foreign manufacturers in the country, Taiwan's Formosa Ha Tinh Steel said Thursday it will not let the roughly 430 Chinese employees who left Vietnam during the Lunar New Year holiday resume work before Feb. 15. Health checkpoints were set up to examine all Chinese workers entering northern Vietnam's Vung Ang economic zone, where the steelmaker is located.

Also on Friday, authorities overseeing the Nhan Co aluminum project in the central province of Dak Nong asked China's Chalieco Group -- the only contractor on the project -- not to send a dozen Chinese workers back to Vietnam before the coronavirus outbreak is under control.

"Haiphong's move to order manufacturers to report the number of Chinese workers is a necessary step to curb the spread of coronavirus in the port city," Dang Tam Chanh, an independent political expert specializing in information access, told the Nikkei Asian Review. Based on the reported information, authorities could ramp up efforts to monitor the potential virus hosts in the city, he said.

As of Monday morning, eight people were confirmed as infected with the coronavirus in Vietnam. The health ministry cited 92 suspected cases, with 65 having tested negative and 27 awaiting final results. Another 73 people have been kept in quarantine after reported contacts with individuals potentially infected. Meanwhile, schools will extend their holiday for at least one more week, pushing back reopenings from Monday to Feb. 10.

Vietnam enjoyed GDP growth of 7.02% in fiscal 2019, benefiting from the country's push toward a greater role in international trade along with investment by foreign companies in manufacturing facilities. Foreign direct investment rose 7.2% nationally last year, with Haiphong drawing $1.5 billion. Any major global disruptions from other key suppliers such as China threaten the growth of Vietnam's economy, SSI Research said on Friday.

Source: Nikkei Asian Review