India is experiencing a new round of CO V ID - 1 9 outbreak. Since April 2 2 , the number of new confirmed cases in India has remained more than 3 0 0 , 0 0 0 , breaking the highest new cases in the single day set in the United States .Total confirmed cases in India reached 1 7. 3 1 3 2 million , second only to the United States . Terminal block electrical, pcb board to board connectors and triangle reflector should be noted.
With a situation of vaccine strain , virus variation and shortage of medical resources , India has entered a state of emergency , and many places have begun to seal the city .However , last year's blockade measures have caused heavy setbacks to India's economy , showing negative GDP growth for two consecutive quarters last year . What is the impact of the epidemic upgrading in India and the global economy this year ?What industries will China be affected ?
Block down measures hit the economy
At present , parts of India have been sealed down in cities .New Delhi announced a one - week lock down from 1 9 April .During the blockade , shopping malls , cinemas , restaurants and other public places will remain closed .Thirteen other states have also decided to impose weekend restrictions , cur few , or lock downs .Of these , Maharashtra , representing nearly 1 5 % of GDP in India , has closed most of its factories since 1 4 April .
GDP growth into doubt
The blockade added worse to India's already weak economy .In fact , India's economic growth had slowed significantly before the outbreak , and the Central Bureau of Statistics showed that India grew 4 . 2 % in fiscal year 2019 - 2 0 2 0 (April 2 0 1 9 ~ March 2 0 2 0) , a new low since 1 1 years .
India has been sealed off in March to June last year . In the Indian economic structure ,Service industry accounts for about 6 0 % of the GDP ,It has almost suspended the economy ,Negative growth occurred for two consecutive quarters .GDP Q Q 2 0 2 0 - 2 0 2 1 (April - June 2 0 2 0) ,India's worst decline since its quarterly economic data in 1996 ;The Indian GDP continued to fall 7 . 5 % in the second quarter (July - September 2 0 2 0) .Q 3 (October - December 2 0 2 0) ,The GDP in India begins to resume positive growth ,Increase by 0.4 % .Even so , theIndia remains negative throughout the year ,According to the latest forecast released by Central Statistics on February 2 6 ,India is expected to grow at - 8 % for F Y 2 0 2 0 - 2 0 2 1 .
In early April , the IMF released the latest World Economic Outlook , which gave India's 1 2 . 5 % growth forecast for 2 0 2 1 , the highest global growth rate , 8 . 4 % and 6 % worldwide .IMF gave the reason that recovery was stronger than originally expected after some major countries such as India .However , some economists believe that the growth rate cannot be achieved even based on the previous year's low base .IMF also points out considerable uncertainty in the future , and the economic outlook could deteriorate sharply if a new resistant strain drags the epidemic worse .
Impact on China's exports and industries
China's foreign ministry has said it is willing to provide necessary support and help to India to control the epidemic.
China's export share may be maintained
For the Chinese economy, the Indian epidemic also brings some opportunities. Chen Jianheng, an analyst at CICC, said the rebound in emerging markets could keep China's export share for some time. If outbreaks in countries such as India, Brazil and South-East Asia rebound again, industrial production and exports in these countries may be affected, thus benefiting countries with better control of the epidemic. For example, since last year, China has been one of the best countries in the world to control the epidemic, and in Southeast Asian countries, Vietnam has also controlled the epidemic better, which has led to a significantly better export growth rate for China and Vietnam than the rest of Southeast Asia.
According to WTO statistics, only China and Vietnam achieved positive growth in 2020, of which China's exports increased 3.6 percent, but South Korea, India, Indonesia, the Philippines, Brazil and Mexico all declined in 2020 compared with 2019, especially India, where exports fell sharply by 14.8 percent.
Possible domestic transfer of API orders
From the global industrial chain point of view, the major impact includes API, textile industry and other fields. India is the main supplier of the global API market, and the outbreak limits India's own API production, coupled with other countries' travel restrictions on India, will lead to a short-term gap in the global API market. As a necessary drug, the demand of API is rigid, and under the gap of supply and demand, the price of API is expected to remain high.
Chuan Cai Securities analyst Chen Jian pointed out that China and India are both raw drug supply countries, there is a possibility of order transfer. The current supply of raw materials in China accounts for 9% of the world and 12% in India. In the preparation of API, it is mainly divided into bulk API, characteristic API and patent API. At present, China exports a large amount of raw materials, occupying the upstream of the industrial chain, mainly supplying 68% of the bulk raw materials in the Indian market, while India is the main characteristic raw materials, occupying the middle reaches of the industrial chain. From the product point of view, the main raw drugs in India are anti-infection, cardiovascular, central nervous system, respiratory field, in which anti-infection and cardiovascular proportion of more than 50. At present, China has a certain accumulation in related fields, production capacity is also relatively sufficient, in India raw drug production capacity is inhibited, it is expected that more orders will be transferred to the domestic, domestic related API enterprises are expected to benefit.
As a matter of fact, the share price of A related API companies has been affected by the Indian epidemic and has risen. April 26, API concept stocks rose, Minova, Huahai pharmaceutical industry, common pharmaceutical industry trading limit, among which Minova has been three consecutive trading days. Tonghe pharmaceutical industry once rose more than 15. In addition, chemical pharmaceutical, biological vaccines, medical devices and other related plates also rose.
An insider from a multinational pharmaceutical company said that most of its products were biological agents, fermented with biological reaction devices, not chemical drugs, and therefore less affected by the Indian epidemic. For the global pharmaceutical enterprises, it mainly depends on their relative position in the industrial chain. If the raw materials of which pharmaceutical enterprises are just from India, they will be impacted, and if which one overlaps with the structure of the Indian production line, it is good. Most of India's API exports to Europe and the United States, and only a few to China, so it is an opportunity for domestic chemical companies.
Textile or short term benefits
India is also the world's largest cotton producer, the domestic textile industry may also be favorable in the short term. Huaxi Securities analyst Tang Shuangshuang pointed out that India's yarn capacity accounted for more than 20 percent of the world, affected by the Indian epidemic, cotton futures rose 3 percent last week, China's yarn C32S index also rose.
Stock markets in India have been hit
From the financial market point of view, the epidemic caused the Indian stock market, foreign exchange market are affected. India's SENSEX30 index has fallen 2.27 percent since April, falling 0.91 percent last week for the last three consecutive weeks. It is close to its low in early January.
The Indian rupee's downward momentum has intensified
The Indian rupee has also fallen two weeks against the dollar since April, a cumulative decline of 2.12% as of April 26.
Indian state bank baroda bank (Bank of Baroda) chief economist samir. "Against the backdrop of a stronger dollar, relatively weak emerging-market currencies, weaker inflows of emerging-market funds and rising new crown cases, the Indian rupee is likely to depreciate ," Mr Nalang said ." India's rupee is likely to"
In addition to the rising number of confirmed cases, Reuters noted that the decision of the Indian Central Bank to commit to buying a large number of bonds had exacerbated the downward trend in the Indian rupee.
Crude oil futures shocks
India is the second most populous country in the world and the main energy consumer, the third largest oil importer in the world. Crude oil futures continued a downward trend amid fears that the epidemic would hurt India's energy demand. WTI crude oil futures and London Brent crude oil futures all fell about 1 . 5 % at about 1 9 : 2 5 Beijing time Wednesday .However , South China futures researcher Yuan Ming believes that the crude oil market does not have the continuous downward trend , which needs to pay attention to the new OPEC meeting at the end of April .
The dollar weakened the RMB strong
From the perspective of the global financial markets ,Recently , US bond yields have fallen slightly ,10 - year yields fell to 1 . 5 % from a high of over 1 . 7 % in late March .The dollar has also weakened again ,The dollar index has fallen about 2 . 5 % since April ,Currently at around 90.8 .The RMB exchange rate remained strong ,Since April , the yuan has risen from around 6 . 4 8 from around 6 . 5 7 at the beginning of the month .
CICC research report pointed out that the US bond yield and the US dollar fell again because the economic recovery momentum may be hit by the epidemic .If the global epidemic rebounded , then the core constraints of the global economy have not subsided , it will not see the substantial tightening of global central banks , the market returns to the logic before this round of US debt rates , and continue to do multi - risky assets , including stocks and commodities .When concerns about the Fed tightening weaken and risk appetite recovers , the dollar falls back .At the same time , China's exports will also partly support the RMB exchange rate when they remain high in the short term .
However , CICC also pointed out that the recent period is only a short repair , in the long run , the epidemic rebound will not change the inflation line , the trend of rising US bond interest rates and the stronger dollar is not over .Once US inflation rises to expectations in the next few months , the Fed may need to tighten . Labor participation rates in developed markets have gradually rebounded , and if the Biden government no longer sharply expands its fiscal deficit , but begins to tax on the rich , then risk appetite may fall again , strengthening the interest rates and US dollar in the middle and second quarter .The stronger dollar will bring a turning point for risk assets , thus facing a turning point in China's bond market .
Post time: May-06-2021