Under the title "Delta Variant Hinders Economic Recovery in Asia... Signs of Slowdown Emerge in China," the Al-Hurra website reported that the increase in cases due to the Delta variant's spread continues to shake the world. Parts of Asia, which previously achieved relative success in containing COVID-19 such as the Philippines, Thailand, and Vietnam, have had to return to lockdowns in areas where the pandemic is spreading.
The Wall Street Journal states that Asia has become a weak link in the strong global economic recovery, as new pandemic restrictions disrupt manufacturing in some countries and exports that boosted recovery in China are showing signs of slowdown. With the pace of vaccination advancement slower than in the West, Asia is recording new pandemic levels driven by the Delta variant of the coronavirus, leading to new restrictions in the form of social distancing and lockdowns in countries that largely avoided such measures earlier in the pandemic.
Tokyo, which is hosting the Olympics, along with Thailand, Indonesia, and Malaysia, reported a record number of COVID-19 cases last Saturday, most of which involved the highly contagious Delta variant. The spread of the virus threatens to damage consumer confidence and undermines the advantage many Asian economies have as manufacturing powers, according to The Wall Street Journal.
According to IHS Markit, Indonesia and Malaysia were among the most affected countries experiencing contraction in manufacturing across Southeast Asia. During the pandemic, foreign demand gave a strong boost to export-dependent economies like China and South Korea, where factories produce consumer goods ranging from bicycles to furniture and electronics. However, this driver is currently showing signs of slowing, as reported by The Wall Street Journal. In China, Purchasing Managers' Index (PMI) fell to its lowest level in over a year in July, indicating a decline in domestic and external demand.
In contrast, the increase in vaccination rates in the West is allowing economic activity to return to normal levels. In the United States, where 49.6% of the population has been vaccinated, economic output rose above pre-pandemic levels in the second quarter.
