Page 27 - FoodFocusThailand No.171 June 2020

SCOOP

• ASEAN nations that are dependent on intermediate product nations are from South Korea. China, however, manufactures less
imports with low levels of complexity: Most of these imports are complex intermediate products. For intermediate products in the
raw materials for the production of textiles, iron products and base automotive category, these ASEAN countries primarily import them from
chemicals. These intermediate products are directly imported from Japan. ASEAN countries under this category can also be classified into
countries producing those products. China serves as a major import two sub-groups, as follows:
source of intermediate products with the exception of chemicals for 1. ASEAN countries that are dependent on intermediate product
which their raw materials have been diversified from China and imports with high levels of complexity, but their dependency on
ASEAN. ASEAN countries under this category can also be classified intermediate product imports overall is low: Malaysia, Singapore and
into two sub-groups, as follows: Thailand are under this category. The link of supply chains in these
1. ASEAN countries that are dependent on intermediate product countries will be stretched out because they may import intermediate
imports with low levels of complexity, and their dependency on products with moderate complexity from other ASEAN nations and China,
intermediate product imports overall is low: Such ASEAN nations are which in turn rely on intermediate products imported from South Korea
predominantly closed economies, namely Lao PDR, Myanmar and and Japan, being owners of important technologies, for export at a
Indonesia. Their imports of intermediate products are primarily for the relatively high proportion to reduce manufacturing costs. However, they
manufacturing of products for domestic consumption. Most of the remain dependent on intermediate product imports with high levels of
imported intermediate products are used as raw materials for textile complexity from East Asian countries, in particular South Korea and
and iron production. Indonesia, however, tends to import intermediate Japan.
products for manufacturing of industrial products, such as chemicals. 2. ASEAN countries that are dependent on intermediate product
2. ASEAN countries that are dependent on imports of intermediate imports with high levels of complexity, and their dependency of
products with low levels of complexity, but their dependency on intermediate product imports overall is high: Such ASEAN nations are
intermediate product imports overall is high: Such ASEAN nations the Philippines and Vietnam. There are increased risks of disruption to
include Cambodia; there are growing risks of disruption to its supply their supply chains because they are heavily dependent on intermediate
chains as compared to other ASEAN nations because it lacks export product imports with a high level of complexity, in particular technology
diversification while its textile industry is heavily dependent on products that are difficult to produce by countries other than South Korea.
intermediate products imported from China. All in all, a majority of ASEAN countries will likely experience the
• ASEAN countries that are dependent on intermediate fragility of supply chains as they are dependent on intermediate products
product imports with high levels of complexity: Most of imported from sources that are highly competitive in manufacturing costs,
intermediate product imports in the technology category of these such as China, plus technologies imported from countries that own
ASEAN nations are electronics with high levels of complexity. Their advanced technologies, namely South Korea and Japan. Such a
major import sources are South Korea, China and Japan. Noticeably, dependency points towards a risk of supply chain disruption. Although
most of complex intermediate products imported by these ASEAN ASEAN countries can manufacture intermediate products with moderate

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