《冯氏集团:2023跨国采购报告(英文版)(93页).pdf》由会员分享,可在线阅读,更多相关《冯氏集团:2023跨国采购报告(英文版)(93页).pdf(93页珍藏版)》请在三个皮匠报告上搜索。
1、COUNTRY SOURCINGREPORTCountry overviewSourcing&industry updatesMinimum wage comparisonsGlobal trade policy regimeInput price trendsMacroeconomic dataNovember 2023Helen Chin,Sophie Zhang,Winnie Lo,William Kong,Marco Chen Issue 21BANGLADESH CAMBODIA CHINA INDIA INDONESIA PAKISTANPHILIPPINES THAILAND T
2、URKEY VIETNAM CENTRAL AMERICA COUNTRY SOURCING REPORT ISSUE 21 EXECUTIVE SUMMARY Stay One Step Ahead in a Turbulent World The world economic recovery is not as smooth as expected.When China lifted all travel restrictions earlier this year and re-opened to the world,markets were bullish and consumer
3、confidence lifted,hoping post-pandemic China would drive faster growth for the global economy.Chinas economy indeed rebounded;however,the initial growth trajectory lost steam in the second quarter.Chinas domestic consumption only regained momentum in the third quarter after the central and local gov
4、ernments implemented a series of expansionary policies.Inflation rates in various countries around the world have gradually dropped from their peaks in 2022,but have not fallen into target ranges set by their respective central banks.As a result,central bank officials are remaining cautious about ra
5、te cuts to prevent a potential inflation rate rebound.In the US and Western European countries,sluggish economies and high interest rates have suppressed import demands,which in turn has hit the export performance of most sourcing countries under our observation.Excessive freight,raw material,and en
6、ergy costs have plagued apparel and footwear exporters since late 2020 but have begun to decrease this year and are expected to continue their downward trend in the near future.Notably,the China Containerized Freight Index dropped from an all-time high of 3,587.91 on 11 February 2022 to a three-year
7、 low of 851.96 on 28 September this year.These resulted in the easing of cost pressures on apparel and footwear exporters.On the currency front,the US dollar recovered most of its losses against a basket of currencies dating back to the closing months of 2022,as measured by the US dollar Index at th
8、e end of this September.Consequently,Asian currencies saw another decline against the US dollar in the first nine months of 2023,albeit much more modestly than in the same period last year;exceptions are the Turkish Lira and the Pakistan rupee,which have depreciated substantially,by 31.7%and 21.4%re
9、spectively year to date.Apparel makers therefore could find imported raw materials more expensive due to the currency factor.On the other hand,many apparel sourcing destinations have raised minimum wages to support their low-paid workers against increased cost of living.As of September 2023,15 out o
10、f 23 garment-producing countries monitored by our team had raised their minimum wages,including Cambodia,China,Egypt,Guatemala,Honduras,India,Indonesia,Mauritius,Mexico,Nicaragua,Pakistan,the Philippines,Turkey and Vietnam.The range of increases varies from 3.1%to 37.0%.Global supply chains continue
11、 to be disrupted by regional conflicts.The Russia-Ukraine conflict has seen no end,and the latest escalation in the Israeli-Palestinian conflict that erupted this October casts a shadow over the dawn of peace in the Middle East.If the war were to extend beyond their national borders,the Suez Canal w
12、ill be affected immediately,and subsequently the Strait of Hormuz.This would result in the severe disruption of the container shipping routes from Asia to Europe.The rise in oil prices,a usual consequence of conflicts in the Middle East,will add another layer of complexity to the global supply chain
13、.Despite increased contacts between Chinese and US officials,the economic relations between the two countries have deteriorated this year.The US Department of Commerce had added 82 more Chinese entities to the Entity List(a regulatory instrument that imposes severe restrictions on the ability of lis
14、ted entities to access US software and technologies)as of October and released three new rules in October to further tighten export controls of advanced chips to China.US President Biden issued an Executive Order restricting US investment in certain Chinese technology sectors in August.In response,C
15、hina placed export restrictions on 14 gallium and germanium items,key metals for the production of chips and other electronic components,starting from 1 August this year.The building of regional trade blocs is still progressing this year despite the escalation of the Sino-US trade war and the fragme
16、ntation of global supply chains.The Regional Comprehensive Economic Partnership(RCEP)has been ratified by 14 of the 15 member countries with the Philippines being the latest RCEP signatory to ratify the agreement this June.Amidst the gloomy export performance of sourcing countries,the intra-RCEP tra
17、de stands out as a bright spot.For example,in the first nine months of 2023,Cambodias exports to the world decreased by 17.8%COUNTRY SOURCING REPORT ISSUE 21 year-on-year(yoy),but its exports to other RCEP member countries increased by 23.6%yoy.In the same period,ASEAN overtook the US to become Chin
18、as largest export market.On the other side of the world,Mexico and Canada outpaced China to become the US top two largest source of imports this year the first time since 2007 that China did not hold the top spot.Globally,there are many bilateral/multilateral free trade agreements and arrangements m
19、aking progress.In October,the European Parliament voted to extend the current Generalized System of Preferences for another four years until 2027 for developing countries to enjoy duty-free or minimum duty on exports to the European market.In June,the UK government introduced the new Developing Coun
20、tries Trading Scheme to replace its Generalized Scheme of Preferences,offering lower tariffs,enhanced preferences,and simplified trading rules to an expanded group of developing countries.Meanwhile,the India-Australia Cooperation and Trade Agreement entered into force on 29 December 2022 and the Pak
21、istan and Turkey Preferential Trade Agreement entered into force on 1 May 2023,while more trade agreements among other countries have been signed or in the negotiation process.In 2023,we have seen several manufacturing countries accelerate their digital adoption and cooperation in order to boost the
22、 productivity and competitiveness of their firms.Singapore and Cambodia,for example,have collaborated on the Financial Transparency Corridor initiative,which allows financial institutions in the two countries to exchange trusted information about SME(small and medium-sized enterprises)buyers and sel
23、lers from their respective countries in order to assess financing support.The enhancement in information flows also helps SMEs to access broader digital trade networks such as the Business Sans Border Proxtera global network,and provides SMEs with greater trade connectivity within the ASEAN and othe
24、r growth regions.At the same time,sourcing countries are committed to building greener global supply chains.To encourage cleaner industrial production in non-EU countries,the EU has proposed a levy on imported carbon-intensive products through the Carbon Border Adjustment Mechanism(CBAM).The CBAM en
25、tered into application in its transitional phase on 1 October 2023 and initially applies to imports of certain goods and selected precursors whose production is carbon intensive and has the highest risk of carbon leakage,i.e.cement,iron and steel,aluminium,fertilizers,electricity and hydrogen.It wil
26、l eventually capture more than 50%of the emissions in sectors covered by the EU Emissions Trading System.Textiles and garments,a carbon-intensive sector,would undoubtedly be subject to this tax with the expansion of the scope of the CBAM,according to our experts.Sourcing agents and manufacturers in
27、the sector therefore must undertake sustainability initiatives immediately to reduce their carbon footprint if they want to keep an edge in the global supply chain.The world going forward would only be more turbulent.Global sourcing enterprises need greater flexibility and resilience as well as the
28、constant adoption of new technologies in order to quickly respond to emergencies.While the three mega trade groupings of North America,EMEA(Europe,Middle East and Africa)and Asia are gradually taking shape and the nearshoring trend is strengthening,observers should not jump to the conclusion that Ch
29、ina is losing its position as the centre of global supply chains.While countries like Mexico and Vietnam have been gaining ground as sourcing countries,Chinese direct investment in these countries has also been seen rising.Furthermore,Asia still has a competitive advantage in terms of labour and ope
30、rating costs,as well as a complete regional supply chain capable of providing the flexibility required for sourcing.As a result,this region will continue to be the main production base for fashion products.China,as the worlds most competitive textile and clothing producer,will continue to be an impo
31、rtant supplier of machinery,raw materials,and capital for apparel-exporting countries in Asia,playing an indispensable role in the global sourcing chain.In this turbulent and uncertain world,governments and companies alike must maintain an innovative and growth mindset in order to hedge against the
32、next big disruptions to the global economy and the global supply chains.COUNTRY SOURCING REPORT ISSUE 21 SECTIONS CONTRIBUTORS PAGE Country overview Fung Business Intelligence 1 Bangladesh Uday Pathak,Rahul Dhand,Anamica Bhardwaj,Fung Business Intelligence 2-7 Cambodia Bunna Long,Regina Villamiel,Fu
33、ng Business Intelligence 8-13 China Fanny Cheng,Rodger Lee,Fung Business Intelligence 14-19 India Uday Pathak,Anamica Bhardwaj,Fung Business Intelligence 20-25 Indonesia Irene Yustitia,Claudia Larisa,Fung Business Intelligence 26-31 Pakistan Umar Bin Asad,Uday Pathak,Anamica Bhardwaj,Fung Business I
34、ntelligence 32-37 The Philippines Haluk Demirtel,Anna Tran,Binh Tran,Fung Business Intelligence 38-42 Thailand Supreeda Keeratiwasin,Fung Business Intelligence 43-47 Turkey Yesim Tekin,Caglar Gurakan,Fung Business Intelligence 48-52 Vietnam Haluk Demirtel,Anna Tran,Fung Business Intelligence 53-57 C
35、entral America Lucas Mayorga,Fung Business Intelligence 58-62 Global trade policy regime Fung Business Intelligence 63-74 Currency appreciation/depreciation Fung Business Intelligence 75 Input prices Fung Business Intelligence 76-82 Minimum wages across Asian countries Fung Business Intelligence 83-
36、88 TABLE OF CONTENTS This report is brought to you by Fung Business Intelligence and Li&Fungs business unit contributors located in the following production countries.It gives an“our people on the ground”perspective of what is happening in those countries.This report covers country and sourcing upda
37、tes,major multilateral/bilateral free trade agreements,input price trends,macroeconomic indicators and foreign exchange rates.COUNTRY SOURCING REPORT ISSUE 21 COUNTRY OVERVIEW Population(million),2022 Median age,2021 Literacy rate(%),2021 or most recent year Real GDP growth(%),2022 Inflation(%),2022
38、 Share in world clothing exports(%),2021 Monthly base wages for manufacturing workers(US$),2022*China 1,412.2 37.9 97.2 3.0 1.9 32.1 607.0 Bangladesh 171.2 26.3 74.9 7.1 6.2 6.5 127.0 India 1,417.2 27.6 74.4 6.3 5.5 2.9 330.0 Pakistan 235.8 20.2 58.0-0.5 29.2 1.5 174.0 Turkey 85.3 30.9 96.7 5.5 72.3
39、 3.4 504.7 Cambodia 16.8 26.5 83.9 5.2 5.3 1.5 246.0 Indonesia 275.5 29.4 96.0 5.3 4.2 1.7 374.0 Philippines 115.6 24.5 96.3 7.6 5.8 0.1 248.0 Thailand 71.7 39.3 94.1 2.6 6.1 1.0 385.0 Vietnam 98.2 32.0 95.8 8.0 3.2 5.7 277.0 Mexico 127.5 29.0 95.2 3.9 7.9 0.8 365.2 El Salvador 6.3 26.3 90.0 2.6 7.2
40、 0.4 359.2 Guatemala 17.4 22.1 83.3 4.1 6.9 0.3 389.2 Honduras 10.4 23.4 88.5 4.0 9.1 0.8 416.9 Nicaragua 6.9 24.5 82.6 3.8 10.5 0.3 221.3 Haiti 11.6 23.0 61.7-1.7 27.6 0.2 151.5 Source:Population(2022):World Bank database,accessed on 19 September 2023 Median age(2021):United Nations World Populatio
41、n Prospects 2022 Literacy rate(2021 or most recent year):World Bank database,accessed on 28 October 2022 Real GDP growth and inflation(2022):IMF World Economic Outlook,October 2023 Share in world clothing exports(2021):WTO database,accessed on 25 September 2023 Monthly wages(2022):JETRO Survey of Ja
42、panese-Affiliated Companies in Asia and Oceania,December 2022*Wages of Turkey and Central American countries are national minimum wages as of 31 August 2023,converted to US dollar terms based on official exchange rates or Bloombergs spot exchange rates on 31 August 2023.1 2 COUNTRY SOURCING REPORT I
43、SSUE 21 BANGLADESH Country&sourcing updates Macroeconomic trends In the first quarter of 2023-24 fiscal year(July 2023-June 2024),Bangladeshs exports increased by 9.5%yoy to US$13.7 billion.However,the export figure fell short of the US$14.0 billion target.In September,exports were US$4.3 billion,up
44、 by 10.4%yoy but still below the strategic target of US$4.6 billion.During the first quarter of the current fiscal year,apparel exports surged by 13.1%yoy to US$11.6 billion.According to the Bangladesh Economic Review published by the Ministry of Finance in June,the countrys provisional estimate of
45、gross domestic product(GDP)growth is expected to be 6.0%for the 2022-23 fiscal year.In July 2023,the World Bank has kept its forecast for Bangladeshs GDP growth unchanged at 5.2%for the 2022-23 fiscal year.The countrys growth is expected to slow due to soaring inflation,policy uncertainty,and weaken
46、ing external demand.In October 2023,the International Monetary Fund(IMF)lowered its GDP forecast for Bangladesh in the 2023-24 fiscal year to 6%,down from its April projection of 6.5%.In September 2023,inflation in Bangladesh slightly eased to 9.6%from 9.9%in August.However,since March,persistent in
47、flation rates above 9%have been posing considerable challenge to the countrys economy by continuously eroding peoples purchasing power.In the January-March period of 2023,the net inflow of foreign direct investment(FDI)in Bangladesh was US$626.5 million,down 29.5%from US$888.5 million in the same pe
48、riod of the previous year.As compared with the previous quarter,the figure went down 11.0%from US$703.8 million in the October-December period of 2022.As of 27 September,the taka was fixed at 110.5,depreciated by 3.2%against the US dollar since 1 January 2023.The taka has become volatile for more th
49、an one and a half years due to mounting external payment pressures,while exports and remittances have not kept pace.Consequently,the countrys foreign exchange reserves have started to shrink as the taka weakens against the US dollar and other major currencies.Bangladeshs foreign exchange reserves ha
50、ve experienced a further decline,reaching US$21.5 billion on 20 September,following the previous amount of US$23.2 billion recorded on 5 September.The continuous decline in reserves is driven by a significant shortage of US dollars in the market,which has necessitated the central bank to sell dollar
51、s to banks from its reserve.The decline in reserves can also be attributed to a payment of US$1.3 billion made to the Asian Clearing Union,a payment settlement platform that allows participating central banks to settle payments for intra-regional transactions on a net multilateral basis,in July and
52、August.Policies and Regulations In June 2023,Bangladesh Bank(BB)announced that it would no longer sell any foreign exchange at a discounted rate from 1 July 2023.A market-based floating,flexible and unified exchange rate regime is expected to be established for all international transactions within
53、the third quarter of 2023.Within the third quarter of 2023,the taka will float freely driven by the market,and all international transactions will be based on the new exchange rate structure.3 COUNTRY SOURCING REPORT ISSUE 21 However,according to the media reported on 16 October 2023,the exchange ra
54、te has yet to become fully market-based floating.According to the Chairman of the Association of Bankers Bangladesh,more time is required to implement a fully market-oriented exchange rate system.The Bangladesh Bureau of Statistics has decided to release quarterly reports on the countrys GDP.The fir
55、st quarterly GDP report,which will publish the quarterly GDP of the July-September quarter,will be unveiled in November 2023.The move comes following the conditions put forth by the International Monetary Fund(IMF)for a US$4.7 billion loan to Bangladesh.The IMF recommended Bangladesh publish quarter
56、ly GDP figures to provide a clearer understanding of the countrys latest economic situation.On 17 July,Bangladeshs cabinet approved the National Tariff Policy 2023,aiming to boost the competitiveness of domestically manufactured goods in the global market.The Internal Resources Division and the Nati
57、onal Board of Revenue(NBR)will be responsible for overseeing the implementation of this policy,while the Bangladesh Trade and Tariff Commission will provide support.According to the policy,import-level duties and taxes will be adjusted to align with the bound rate that Bangladesh has committed to th
58、e World Trade Organization.The policy will prioritize transparency in the customs system to streamline customs procedures and reduce unnecessary complexities.This will be achieved by implementing fair and consistent duty and tax rates for similar products.Within six months of the gazette publication
59、,the NBR will develop a time-bound action plan to align the countrys tariff regime with the policys objectives.Industry&sourcing developments According to the latest Bangladesh Business Confidence Survey 2022-23,the Business Confidence Index(BCI)of Bangladesh reached 74.4 over 100 in December 2022-J
60、une 2023,up from 63.6 for the March-August 2022 period,indicating an improved business outlook.However,the surveyed business entities are pessimistic about controlling business costs,including electricity,water,gas,rent,and materials.The confidence index for business cost for December 2022-June 2023
61、 dropped to 22.4,down from 35.8 for March-August 2022,reflecting deep cost concerns.Supported by the USAID-funded“Feed the Future Bangladesh Trade Activity,”the Business Initiative Leading Developments(BUILD)survey on the BCI was conducted between September and November 2022.Among the 567 surveyed b
62、usiness entities,the Bangladeshi businesses are confident in market demand,order volume,selling prices,business activities,employment,and investment during December 2022-June 2023,despite economic headwinds.In 2023,Bangladesh Export Processing Zone Authority(BEPZA)signed agreements with various garm
63、ents and textile companies from China.In early January,SSH(BD)Sustainable Fashion Company Limited announced that it will invest US$24.1 million in the BEPZA Economic Zone to establish high-end garment facilities.In February,Chinese company IHM Garments and Textile Company Limited announced to set up
64、 a garment factory in Ishwardi Export Processing Zone with an investment of US$8.7 million.BANGLADESH Country&sourcing updates 4 COUNTRY SOURCING REPORT ISSUE 21 In September,Chinese factory M/s QSL.S Garments Company is set to establish garment facilities in Mongla Export Processing Zone with an in
65、vestment of US$19.5 million.Labour&workplace compliance After the Rana Plaza tragedy in 2013,all the export-oriented RMG factories in Bangladesh were targeted for structural,fire and electrical safety inspection,and follow-up remediation.According to the Center for Policy Researchs(CPD)report titled
66、 Emerging Concerns of Occupational Safety and Health(OSH)of the RMG Industry:Role of Public and Private Monitoring Agencies published this April,Bangladeshs RMG industry achieved significant improvements in OSH over the last decade,especially the immediate years after the Rana Plaza accident.In the
67、2020-2021 fiscal year,the total number of inspections was 47,361,of which 6,227 were in the Bangladeshi RMG industry.However,according to the CPDs report,some inspectors have not performed the inspections as mandated.The quality of safety inspection remains a concern.Besides,increasing accidents rel
68、ated to the Bangladeshi RMG sector raised concerns.The number of accidents in the RMG industry in 2021 was 180,up from 177 in 2020.The total numbers of deaths of RMG workers from workplace accidents in 2017 and 2018 were 15 and 10 respectively.The number dropped to only 2 in 2019 and 1 in 2020,but t
69、hen jumped to 13 in 2021.The report comments that current OSH monitoring initiatives need to be revised to ensure the long-term sustainability of the RMG industry.The CPD suggests that an institutional and operational review of major monitoring authorities and initiatives should be carried out.On 9
70、April 2023,the Labour and Employment ministry formed the new wage board to review readymade garment(RMG)workers wages.The board members are expected to propose a certain amount as the minimum monthly salary for over four million RMG workers.However,the second meeting of the board concluded in August
71、 without reaching a decision.No proposal was put forward either by the owners or workers representatives in the meeting.The board has to announce a new wage structure by the end of 2023.As per the Bangladesh Labour Act and labour rules,the government forms a new wage board every five years.The curre
72、nt minimum wage for a RMG worker is 8,000 taka per month,which came into effect in December 2018.Majority of the unions of the RMG sector have demanded a minimum monthly wage of 23,000 taka.FTAs,trade preferences&facilitation At the end of October 2022,the US Commercial Service,the trade promotion a
73、rm of the US Department of Commerces International Trade Administration(ITA),opened its first office in Dhaka.The new office will work collaboratively with Bangladesh to assist US companies,which are considering entering the Bangladeshi market or expanding their presence in Bangladesh.The office wil
74、l also help facilitate one-on-one business counseling services,provide the Bangladeshi market information,and connect the US and Bangladeshi partners through business matchmaking services and other activities.BANGLADESH Country&sourcing updates 5 COUNTRY SOURCING REPORT ISSUE 21 BANGLADESH Country&s
75、ourcing updates In April 2023,Bangladesh and India agreed to settle a part of their bilateral trade transactions in their own currencies to reduce pressure on their forex reserves.To facilitate the bilateral transactions,two Bangladeshi banks Sonali Bank and Eastern Bank will open accounts in two In
76、dian banks State Bank of India and ICICI Bank,and vice versa.Bangladesh Bank will launch a taka-rupee based debit card called Taka Pay Card.Users can settle payments for domestic purchases in Bangladeshi taka and spend in Indian rupees when traveling to India,starting from September 2023.In addition
77、,from September onwards,Bangladesh and India will open Letter of Credit for import and export by using taka and rupee.In June,the Canadian parliament passed a finance bill granting Bangladesh an extension of the duty-free access to Canada from 2026 to 2034,which will benefit Bangladesh after its gra
78、duation from least developed country(LDC)status in 2026.Under the General Preferential Tariff(GPT)scheme,this market access encompasses relaxed rules of origin for apparel items and provides duty-free access for various other products.The current GPT scheme was scheduled to expire at the end of 2024
79、.Canada is the third country,following the UK and Australia,where Bangladesh can maintain preferential trade treatment beyond 2026.Hong Kong and Bangladesh signed a comprehensive avoidance of double taxation arrangement(CDTA)in August 2023.The CDTA aims to eliminate double taxation with respect to t
80、axes on income and prevent tax evasion and avoidance.Under the CDTA,any tax paid in Bangladesh,whether through direct payment or deduction,will be eligible for a credit against the tax liability in Hong Kong for the same income.If the ratification procedures can be completed in 2023,the CDTA will be
81、come effective for Hong Kong from 1 April 2024,and for Bangladesh from 1 July 2024,for their respective assessment years.Infrastructure&environmental sustainability In October 2022,Bangladesh,Indonesia,Pakistan,and Vietnam jointly launched a US$43-million programme to reduce chemical waste in their
82、textile sectors.The programme,led by the UN Environment Programme(UNEP),will help businesses to manage risks to workers and eliminate toxic chemicals from the production processes.In the five-year programme,the UNEP will work with the four governments and companies to phase out certain hazardous che
83、micals across the sector.India has opened the Delhi Air Cargo complex for handling Bangladeshi transit cargo,effective 15 February.The move comes after Bangladesh allowed India to use the Chattogram and Mongla ports for Indian transit cargo in 2022.The Bangladesh Garment Manufacturers and Exporters
84、Association(BGMEA)commented that only some exporters are using Indias air transshipment services,which are expensive and require a long lead time for delivery between the land ports of both countries.The BGMEA urged Indias government to enhance infrastructure at their land ports to facilitate smooth
85、 trading and logistics activities between the two countries.According to the BGMEA,it currently takes 18 days to import goods from China to Bangladesh,while moving goods from India takes 30 days.Also noteworthy is that rather than relying on 6 COUNTRY SOURCING REPORT ISSUE 21 regional transshipment
86、services offered by neighbouring countries,Bangladesh has set an ambition to be a regional transshipment centre and has already opened its sea-land ports to serve the surrounding markets.The Chattogram Bay terminal and Matarbari Deep Sea Port will be developed as major regional transshipment hubs.Pr
87、ime Minister Sheikh Hasina launched the third terminal of the Hazrat Shahjalal International Airport(HSIA)in early October 2023.After the completion of systems integration and calibration,the third terminal is scheduled to be fully operational for passenger use by the end of next year.Once the third
88、 terminal is fully operational,it is anticipated that Dhaka airports annual capacity for passenger handling will increase to 24 million from current 8 million and annual cargo handling capacity will become 500,000 tonnes.The design of the third terminal includes seamless connectivity with a multimod
89、al transport system,ensuring smooth entry and exit for international airport passengers.Commencing on 28 December 2019,the total cost of the third terminal project was 213 billion taka.The government has contributed 50 billion taka,while the remaining funds were provided by Japan International Coope
90、ration Agency.In October 2023,Bangladesh received its first shipment of uranium fuel from Russia for its nuclear power plant,Rooppur Nuclear Power Plant(RNPP),making it the 33rd countries in the world and the third in South Asia to produce nuclear energy.The US$12.65 billion project is mostly financ
91、ed by a Russian loan repayable within 28 years,with a 10-year grace period.The construction of the RNPP has been delayed due to the COVID-19 pandemic and sanctions on Russia following the Ukraine invasion.The completion of the plant is expected to address Bangladeshs electricity crisis and support i
92、ts growing economy,as the country currently relies on imported gas for electricity generation,which has become more expensive amid the Russia-Ukraine crisis.Other topics The Australian High Commission in Dhaka and the International Finance Corporation(IFC)have partnered to launch the Bangladesh Econ
93、omic Engagement ProgrammePrivate Sector Development Partnership(BEEP-PSDP)project.The news was announced in June 2023.This initiative aims to mobilize over US$50 million in investment to support key growth sectors,promote economic resilience,and foster inclusivity in Bangladesh,particularly in respo
94、nse to the challenges posed by the COVID-19 pandemic.The project,expected to operate from 2023 to 2027,focuses on enhancing competitiveness,diversification,access,and sustainability in key economic areas under three pillars.The first pillar emphasizes regulatory reforms to improve the business envir
95、onment and attract inclusive private investment,especially in sectors affected by the pandemic,with a particular focus on creating opportunities for women entrepreneurs.The second pillar aims to enhance access and inclusion in the financial sector,while the third pillar seeks to seize strategic oppo
96、rtunities beyond the scope of the first two pillars.BANGLADESH Country&sourcing updates 7 COUNTRY SOURCING REPORT ISSUE 21 BANGLADESH Macroeconomic data EXCHANGE RATES Source:Bangladesh Bank 102.0103.0104.0105.0106.0107.0108.0109.0110.0111.0USD:BDT buy rate(April September 2023)Apr-23 May-23 Jun-23
97、Jul-23 Aug-23 Sep-23 Quantum index of medium and large-scale manufacturing(Base:2005-06=100,yoy growth%)2.2 12.3 Consumer price index(yoy growth%)9.2 9.9 9.7 9.7 9.9 9.6 Exports(yoy growth%)-16.5 26.6 2.5 15.3 3.8 10.4 Exports(US$mn)3,956.0 4,849.6 5,031.5 4,592.9 4,781.2 4,310.3 Of which:-Knitwear(
98、US$mn)1,830.3 2,310.4 2,460.1 2,266.5 2,314.7 2,180.4 -Woven garments(US$mn)1,494.8 1,742.9 1,900.7 1,687.3 1,728.1 1,438.5 -Home textile(US$mn)80.9 84.2 70.3 56.8 67.3 64.4 -Footwear*(US$mn)79.0 106.2 105.0 100.8 91.2 74.0 -Leather products(US$mn)30.7 38.5 34.9 30.6 30.8 29.4 Imports(yoy growth%)-2
99、4.1-31.6-26.9-36.4-Imports(US$mn)4,706.9 5,631.8 4,505.9 5,663.4 -*Includes leather footwear Source:Bangladesh Bureau of Statistics,Bangladesh Bank,Export Promotion Bureau of Bangladesh 8 COUNTRY SOURCING REPORT ISSUE 21 CAMBODIA Country&sourcing updates Macroeconomic trends The Cambodian economy gr
100、ew 5.2%yoy in 2022,mainly driven by tourism,domestic consumption,and garment exports.However,exports of the country have continued to decline since the start of 2023 due to sluggish demand in both the EU and the US markets.Exports of the GFT sector(garments,footwear,travel goods and other textile-re
101、lated products),Cambodias largest foreign exchange earner,slumped by 17.8%yoy in the first nine months of 2023,leading to the closure of several factories and the loss of jobs for thousands.Despite the temporary difficulties in the export sector,the overall economic prospect for Cambodia is still pr
102、omising this year because of the stable domestic political environment,the robust tourism recovery and the expected high growth in the services and agricultural sectors.In October 2023,the International Monetary Fund(IMF)projected that the countrys economy will expand 5.6%this year and 6.1%next year
103、,the fastest grow rates of the ASEAN economies in both years.In September 2023,the Economist Intelligence Unit forecasted that Cambodia would be among the worlds fastest-growing economies in 2024,along with Brunei,Ethiopia,Tanzania,the Philippines,Vietnam,and Uganda.Cambodias exports registered a ma
104、rginal decrease of 0.8%yoy to US$16.9 billion in the first nine months of 2023,according to the General Department of Customs and Excise.The US remained the biggest market for Cambodias exports during the January-September period,with an export value of US$6.9 billion(accounting for 40.7%of Cambodia
105、s total exports),followed by Vietnam(US$2.0 billion,12.0%),China(US$1.1 billion,6.2%),and Japan(US$885.7 million,5.2%).The exports of the GFT sector decreased by 17.8%yoy to US$8.2 billion,but was still the largest export category during the January-September period,accounting for 48.4%of Cambodias
106、total exports in the period.Electric machinery,equipment and parts were the second largest export category,which increased by 93.5%yoy to US$2.5 billion,accounting for 14.6%of Cambodias total exports in the same period.Cereals ranked the third with an export value of US$1.2 billion and an export sha
107、re of 7.0%.The Cambodian riel closed at 4,122 against the US dollar on 29 September 2023,representing a depreciation of 0.12%in the year to date.Policies®ulations On 4 October 2023,Cambodia unveiled its Financial Technology(Fintech)Development Policy 2023-2028,aiming to enhance financial inclusio
108、n,maintain financial stability,and promote innovation.This development policy serves as a roadmap to promote the use of technologies in the financial industry and harness the full potential of Fintech to boost digital economic and social development in Cambodia.The policy was launched at a time when
109、 Cambodia started seeing big growth in digital payment.According to the National Bank of Cambodia,in 2022,the number of registered e-wallet accounts in the country increased to 19.5 million and the total number of transactions went up to one billion with a total amount of US$272.8 billion,approximat
110、ely nine times Cambodias GDP in the same year.This development policy serves as a roadmap to promote the use of technologies in the financial industry and harness the full potential of Fintech to boost digital economic and social development in Cambodia.In September 2023,the Ministry of Mines and 9
111、COUNTRY SOURCING REPORT ISSUE 21 Energy(MME)decided to reduce electricity prices by 10%to 20%for industrial and agricultural users for three months until the end of the year.Consumers who are paying average rates,based on time-to-use,or with solar panel installation connected to the national grid fo
112、r more than six months will benefit from the power tariff relief.Eligible consumers will get a 10%discount on the monthly average energy tariff from Monday to Saturday between 7 a.m.and 9 p.m.,20%discount on the average monthly energy consumption from Monday to Saturday between 9 p.m.and 7 a.m.,and
113、24 hours on Sundays and public holidays.The decision is to promote production in factories and enterprises and thereby to create more jobs and income for the people.About 21,000 factories and enterprises will benefit from this policy.On 18 August 2023,the National Bank of Cambodia(NBC)and Bank of th
114、e Lao PDR(BOL)launched the first phase of cross-border QR code payments between the two countries,which allows Cambodian tourists,traders and mobile banking users who visit Laos to make cross-border payments in Riel,the national currency of Cambodia,via scanning LAO QR Code with merchants or shops i
115、n Laos.The launch of this cross-border payment connectivity is the first step by the two countries to implement the memorandum of understanding(MoU)on collaboration in financial innovation and payment system development that was signed on 21 November 2022.Cambodia is the first country that has succe
116、ssfully connected and developed cross-border payment via QR Code with Laos.Apart from Laos,Cambodia also has cross-border QR code payment cooperation with its neighbouring country Thailand.The two central banks,NBC and BOL,are working together on the second phase that will reciprocally allow Lao vis
117、itors to pay for goods or services in their local currency Kip by scanning KHQR code with merchants or shops in Cambodia.Cambodians new Law on Taxation was enacted on 22 May 2023 after King Norodom Sihamoni signed a Royal Code promulgating the new law.The law consists of 20 chapters and 255 articles
118、,expanded from seven chapters and 155 articles in the previous version.It fills up the gaps in the existing fiscal laws and amalgamates regulations on 15 tax categories into a single law,according to industry experts.The law has improved the compliance of the Cambodian tax regime with international
119、standards and economic conditions and encourages accountability,effectiveness and transparency in the collection process.The law facilitates,improves,and ensures consistency by compiling a set of tax laws and regulations under a single decree and achieves uniformity with the countrys other key laws
120、such as the Law on Investment,the Law of Commercial Enterprises,and the Labour Law.Specifically,the law provides clarity on tax-related incentives for potential investors to choose targeted industries.On 5 July 2023,the Cambodian government approved the Law on Rules of Origin(the law).The law,which
121、has nine chapters and 35 articles,establishes the principles and rules of origin for imported and exported goods that fully comply with the Rules of Origin Agreement of the World Trade Organization(WTO).The law establishes a clear legal foundation for authorities in charge of determining the origins
122、 of goods and issuing certificates of origin,and CAMBODIA Country&sourcing updates 10 COUNTRY SOURCING REPORT ISSUE 21 preferences provided by relevant countries via free trade agreements.As of 30 September 2023,Cambodia has secured Double Taxation Agreements(DTA)with 11 nations and territories,nine
123、 of which are currently in effect.According to deputy director-general of the General Department of Taxation(GDT),the list of Cambodias DTA partners includes Singapore,Thailand,Brunei,Vietnam,Indonesia,Malaysia,South Korea,Turkey,the Chinese Mainland and its Hong Kong and Macau special administrativ
124、e regions.The DTAs with Turkey and Chinas Macau Special Administrative Region are slated to become operational in January 2024 and are in the final stages of procedural completion.Industry&sourcing developments The GFT sector is the largest foreign exchange earner for Cambodia,accounting on average
125、for around 50%of Cambodian total export value each year.As of October 2023,the sector consists of 1,332 factories and branches and employs 840,000 workers,most of whom are female.The sector continues to face economic headwinds this year due to an economic slowdown in its major export markets in Euro
126、pe,the US,and Canada,as well as competition from other garment-producing nations like Vietnam and Bangladesh.The slowdown in GFT exports led to the closure of several factories and the loss of jobs for thousands in the sector.In the first seven months of this year,86 factories have suspended or clos
127、ed their business operations,leaving 39,719 workers temporarily unemployed,according to the Ministry of Labour and Vocational Training.Since April 2023,the Cambodian government is launching a scheme to provide financial support to workers in the GFT sector who lost their earnings following factory c
128、losures or suspension.For workers who are suspended from their employment contracts,the Ministry of Labour and Vocational Training,the Ministry of Economy and Finance,and factory owners have agreed that each of them will get a subsidy of US$70 per month,in which US$30 will be contributed by factory
129、owners and US$40 by the government.This type of financial support will continue during the suspension of their contracts.According to a statement by the Ministry of Labour and Vocational Training(MLVT),workers in 23 GFT factories whose labour contracts were suspended in July and August will be provi
130、ded allowance as per this policy.Labour&workplace compliance Cambodian government decided to raise the monthly minimum wage for workers/employees in the GFT sector from the current US$200 to US$204,effective from 1 January 2024.FTAs,trade preferences&facilitation Starting from 19 June 2023,Cambodia
131、enjoys the trade preferences in the Developing Countries Trading Scheme(DCTS)provided by the UK that replaces the UKs Generalised Scheme of Preferences(GSP).The DCTS offers lower tariffs and simpler rules of origin requirements(a minimum of 25%local content)for products exporting to the UK.The DCTS
132、applies to 65 countries that fall under one of the following categories:-least developed countries(LDCs)as defined by the United Nations;-low income and lower middle-income countries as defined by the World Bank.Cambodias exports to the UK were US$528 million during the first eight months of 2023,CA
133、MBODIA Country&sourcing updates 11 COUNTRY SOURCING REPORT ISSUE 21 decreased by 15.8%yoy,while imports from the UK in the same period were US$61 million,up 2%yoy.On 8 June 2023,Cambodian Minister of Commerce and the Emirati Minister of State for Foreign Trade signed the Cambodia-United Arab Emirate
134、s Comprehensive Economic Partnership Agreement(CAM-UAE CEPA)in Phnom Penh.The agreement aims to increase and diversify bilateral trade by substantially eliminating tariffs,reducing non-tariff trade barriers and promoting trade in goods,services and investment.It is Cambodias third bilateral trade ag
135、reement,following the ones with China and South Korea which came into force in 2022.The CAM-UAE CEPA focuses on trade in goods,trade in services,technical barriers to trade,rules of origin,customs and trade facilitation,sanitary and phytosanitary measures,trade remedies,electronic commerce,investmen
136、t,and intellectual property.Other areas incorporated in the agreement include economic and technical cooperation,small and medium-sized enterprises(SMEs),transparency,dispute settlement,administrative and institutional provisions,general provisions and exceptions,and final provisions.In 2022,Cambodi
137、as goods and services trade with the UAE was US$105 million,with an export value of US$70 million to the UAE market and the value of imports from the UAE at US$35 million.Key Cambodian export items that will benefit from the agreement include agricultural products,bicycles,electronic vehicles,travel
138、 bags,footwear and garments.The UAE will benefit from its exports of services in construction,engineering and environment-protection,as well as professional and business services.On 10 February 2023,Cambodia and China signed the Action Plan on Trade and Economic Cooperation 2023-2024(the Plan)in Bei
139、jing.The Plan aims to ensure that preferential arrangements granted by the Cambodia-China Free Trade Agreement(FTA),the ASEAN-China FTA,and the Regional Comprehensive Economic Partnership(RCEP)would be fully utilized to boost trade and investment between Cambodia and China.The Plan is one of the 12
140、bilateral cooperation agreements the two countries signed during Prime Minister Hun Sens three-day visit to China in the month,to further deepen the comprehensive strategic partnership of the two countries.The Plan sets up the mechanisms to achieve its goals and will be updated every year.Mechanisms
141、 in this years Plan include jointly establishing a“Fish and Rice Corridor”in the Tonle Sap Lake area in northwestern Cambodia to develop modern ecological agriculture and to facilitate the import and export of fish and milled rice;establishing an industrial development corridor to serve as a model f
142、or the planned multi-purpose economic zone in Preah Sihanouk province;and supporting Cambodian firms to participate in the China Export and Import Fair.This action plan is another concrete step by Cambodia to build close trade relations with China,so as to diversify its exports and tap into the huge
143、,promising China market.Infrastructure&environmental sustainability On 16 October 2023,the new Siem Reap Angkor International Airport(SAI)in northwest Cambodia commenced operations.It is about 40 km from the UNESCO-listed Angkor Archeological Park and 50 km from Siem Reap provincial town.With the co
144、mmencement of SAI operations,the old Siem Reap International Airport was entirely closed.The airport covers a parcel of 700 hectares and has a 3,600-meters runway.It is a 4E-level international airport that can accommodate long-distance flights from across the globe.The airport will be able to handl
145、e 7 million passengers and 10,000 tonnes of cargo per CAMBODIA Country&sourcing updates 12 COUNTRY SOURCING REPORT ISSUE 21 annum from 2024 and up to 12 million passengers and 65,000 tonnes of cargo annually from 2040.The US$1.1 billion project was initiated through the Cambodia-China“steel friendsh
146、ip”and“diamond cooperation”policies,led by government leaders from both countries.It is considered a historic milestone in the development of the aviation industry in Cambodia.This new“international gateway”to the cultural province of Siem Reap is believed to transform the province into a bigger hub
147、 of tourism,trade and investment.In October 2023,the Ministry of Public Works and Transport(MPWT)stated in a release that they are working along with China Road and Bridge Corporation(CRBC)on the review of the draft Framework Agreement(FA)of the Tonle Bassac navigation and logistics system project.T
148、he Tonle Bassac navigation and logistics system project aims to create a new 180-km waterway from Prek Takeo of the Mekong River to the sea in Kep province,passing through Prek Ta Ek and Prek Ta Hing of the Bassac River in Koh Thom District of Kandal province.This is the first time such a project ha
149、s been undertaken in Cambodias waterway transportation history.The US$1.7 billion Tonle Bassac navigation and logistics system project or“Funan Techo Canal”project was approved on 19 May 2023 by the Cabinet of National Assembly.The Royal Government of Cambodia formed an inter-ministerial commission
150、on 7 June 2023 to proceed the implementation of the project.The Cabinet has assigned Deputy Prime Minister and Minister of Economy and Finance Aun Pornmoniroth to lead a study on forms of investment in the project and Minister of Water Resources and Meteorology Lim Kean Hor to notify countries along
151、 the Mekong River.On 13 July 2023,the Monetary Authority of Singapore(MAS)announced that it has signed a MOU with the National Bank of Cambodia(NBC)to collaborate on a Financial Transparency Corridor(FTC)initiative.The initiative aims to establish supporting digital infrastructures to facilitate tra
152、de and related cross-border financial services between small-and medium-sized enterprises(SMEs)in Singapore and Cambodia.The FTC allows Cambodian and Singapore financial institutions to exchange trusted information about SME buyers and sellers from their respective countries to assess financing supp
153、ort.Such enhanced information flows can help SMEs in Cambodian and Singapore to access broader digital trade networks such as the Business Sans Border Proxtera global network,and provide SMEs with greater trade connectivity within the ASEAN and other growth regions.In March this year,the two countri
154、es collaborated on cross-border sharing of individual consumer credit profiles that makes it easier for citizens from both countries to access financial services in their countries of residence.The FTC initiative will further extend cross-border information sharing between the two countries to busin
155、esses and SMEs to enhance their abilities to access financing across borders.CAMBODIA Country&sourcing updates 13 COUNTRY SOURCING REPORT ISSUE 21 CAMBODIA Macroeconomic data Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Consumer price index(yoy growth%)0.7 1.1 0.5 0.1 1.9 3.2 Exports(yoy growth%)-0.7-1
156、.8 9.4 17.7-12.9 16.8 Exports(Cambodian riel billion)8,543.0 7,507.6 8,022.3 9,407.8 8,507.0 8,972.0 Of which:-Garments(Cambodian riel billion)2,316.5 2,017.5 2,652.1 3,548.5 3,363.1 3,190.8 -Footwear(Cambodian riel billion)494.4 461.5 500.5 585.9 445.3 340.0 -Electrical parts(Cambodian riel billion
157、)925.1 825.6 932.3 1,217.4 986.2 1,089.0 -Bicycles(Cambodian riel billion)285.5 197.2 219.1 248.6 122.8 157.6 Imports(yoy growth%)0.5-19.9-26.6-23.4-38.3-21.7 Imports(Cambodian riel billion)9,326.7 8,420.6 8,975.8 8,738.3 8,026.4 8,710.9 Source:National Bank of Cambodia EXCHANGE RATES Source:Bloombe
158、rg 3,9754,0004,0254,0504,0754,1004,1254,1504,175USD:KHR spot rate(April September 2023)14 COUNTRY SOURCING REPORT ISSUE 21 CHINA Country&sourcing updates Macroeconomic trends In the first nine months of 2023,merchandiseexports declined by 5.7%yoy to US$2,520.3 billion.Merchandise exports totalled US
159、$299.1 billion inSeptember,down by 6.2%yoy.Exports of textiles and garments dropped by6.6%yoy to US$26.2 billion in September.Ofwhich,exports of garments fell by 8.9%yoy toUS$14.6 billion,while exports of textiles wentdown by 3.6%yoy to US$11.6 billion.In the firstnine months of 2023,textile and gar
160、mentexports totalled US$246.6 billion,down by 9.5%yoy.Of which,exports of garments reachedUS$132.9 billion,down by 8.8%yoy,whileexports of textiles amounted to US$113.7 billion,down by 10.3%yoy.Exports of shoes totalled US$3.9 billion,downby 17.6%yoy,in September.In the first ninemonths of 2023,expo
161、rts of shoes reachedUS$37.5 billion,down by 11.5%yoy.Exports of toys amounted to US$4.4 billion,down by 15.0%yoy,in September.In the firstnine months of 2023,exports of toys totalledUS$30.9 billion,down by 12.9%yoy.In the first nine months of 2023,ASEAN overtookthe US to become Chinas largest export
162、 market.The US was also surpassed by the EU,falling to thethird spot in terms of Chinas export destinations.Meanwhile,China also lost the title of being USlargest source of imports for the first time in 15years,outpaced by Mexico and Canada.Chinas trade and investment with countriesalong the Belt an
163、d Road(B&R)maintained steadygrowth in the first nine months of 2023.Chinas trade with B&R countries increased by3.1%yoy to 14.32 trillion yuan in the period.Meanwhile,Chinese companies made outwarddirect investment(ODI)of US$23.5 billion inB&R countries,up by 20.3%yoy.Many B&Rcountries,such as Vietn
164、am and Ethiopia,havecalled on Chinese investors to expandinvestment in their countries.Consumer prices:CPI growth declined to 0.0%yoyin September from 0.1%yoy in August.In the firstnine months of 2023,Chinas CPI growth was 0.4%yoy.Midstream prices:Ex-factory prices of industrialproducts have gone up
165、 lately.The producer priceindex(PPI)rose by 0.2%mom in August and 0.4%mom in September.In the first nine months of 2023,Chinas PPI growth was minus 3.1%yoy.Upstream prices:Domestic prices of productioninputs have increased lately.The purchaser priceindex of industrial products went up by 0.3%mom inA
166、ugust and 0.6%yoy in September.In the first ninemonths of 2023,the growth in Chinas purchaserprice index was minus 3.6%yoy.Real GDP growth decelerated from 6.3%yoy in2Q23 to 4.9%yoy in 3Q23.In the first nine monthsof 2023,Chinas economy expanded by 5.2%yoy.Total profits of industrial companies with
167、annualrevenue over 20 million yuan declined by 9.0%yoyto 5.4 trillion yuan in the first nine months of 2023.Among the industries,profits of the textilemanufacturing industry dropped by 10.2%yoy to46.0 billion yuan,while profits of the wearing appareland ornament manufacturing industry fell by 7.2%yo
168、y to 38.4 billion yuan in the period.Industrial production by the textile industry fellby 1.3%yoy in the first nine months of 2023,compared with a 2.7%decline in full year 2022.15 COUNTRY SOURCING REPORT ISSUE 21 Chinas fabric production contracted by 3.5%yoy to 2.7 billion metres in September.In th
169、e first nine months of 2023,fabric production reached 23.0 billion metres,down by 3.4%yoy.Fixed asset investment(excluding rural households)in the textile industry decreased by 2.2%yoy in the first nine months of 2023.Foreign direct investment(FDI)into China went down by 8.4%yoy to 920.0 billion yua
170、n in the first nine months of 2023.China is witnessing a new trend in foreign investment activities,with FDI in high-tech manufacturing sector expanding rapidly with a growth rate of 12.8%yoy in the period.Chinas total retail sales of consumer goods reached 34.2 trillion yuan in the first nine month
171、s of 2023,up by 6.8%yoy.Of which,retail sales of garments,footwear,hats and knitwear amounted to 993.5 billion yuan,up by 10.6%yoy.In the period,online retail sales of physical goods grew 8.9%yoy to 9.0 trillion yuan,accounting for 26.4%of total retail sales of consumer goods.The Chinese yuan deprec
172、iated by 5.5%against the US dollar in the first nine months of 2023.The USD-CNY spot exchange rate depreciated from 6.8986 on 30 December 2022 to 7.2980 on 28 September 2023,according to Bloomberg.Causes for the depreciation of the Chinese yuan include the monetary tightening of the US,adjustment to
173、 the rapid appreciation of the Chinese yuan in late 2022,and a weaker-than-expected recovery in the Chinese economy this year.Chinese officials stated that Chinas economic fundamentals remain sound and there is no basis for continued depreciation of the Chinese yuan.From January to October 2023,the
174、minimum wage levels in Hebei,Shanxi,Qinghai,Guizhou,Anhui,Shaanxi,Shanghai,Beijing,Xizang,Yunnan and Shandong were adjusted upward.Chinas job market has remained stable in recent months.The surveyed urban unemployment rate in 31 major cities in China came in at 5.2%in September,down from 5.3%in Augu
175、st.The high freight rates that have plagued Chinese exporters since late 2020 have finally declined and returned to pre-pandemic levels in recent months.The China Containerized Freight Index,which reflects the freight rates paid by shippers for containers leaving from China,dropped from an all-time
176、high of 3,587.91 on 11 February 2022 to 1271.31 on 30 December 2022 and to a three-year low of 851.96 on 28 September this year.Policies®ulations A meeting of the Political Bureau of the Communist Party of China(CPC)Central Committee was held on 24 July to make arrangements for the economic work
177、for the second half of the year.The meeting called for carrying out macro regulation with precision and force,strengthening counter-cyclical regulation,and making more policy options available.It is necessary to stick to a proactive fiscal policy and a prudent monetary policy,extend and improve the
178、implementation of tax and fee reductions,and give full play to the role of monetary tools,according to the meeting.The meeting emphasized that it is necessary to actively expand domestic demand.China will boost the consumption of bulk commodities such as automobiles,electronic products and household
179、 goods,and promote the consumption CHINA Country&sourcing updates 16 COUNTRY SOURCING REPORT ISSUE 21 CHINA Country&sourcing updates of services on sports,entertainment,culture,tourism and so on.Moreover,strong support will be given to scientific and technological innovation,the real economy,and the
180、 development of micro,small and medium-sized enterprises,according to the meeting.On January 11,the Ministry of Commerce and other 13 departments issued a circular on the implementation of pilot programmes for the integrated development of domestic and foreign trade in selected regions,including Bei
181、jing,Shanghai,Jiangsu,Zhejiang,Fujian,Hunan,Guangdong,Chongqing,and Xinjiang.The move is aimed at clearing the institutional obstacles to the integration of domestic and foreign trade,helping market players make full use of the domestic and foreign markets,and realizing the efficient operation of do
182、mestic and foreign trade.The Chinese government has implemented various measures to promote foreign trade this year.For example,Effective from 1 January,China has reduced or cancelled import tariffs on 1,020 products,including certain raw materials for anti-cancer drugs,coffee machines,potash fertil
183、izers and iridium oxide for fuel cells,medicines,etc.Moreover,starting from 1 July,China has implemented the eighth and final reduction on the Most-Favored-Nation(MFN)tariff rates on 62 kinds of information technology products.Chinas overall tariff level has fallen from 7.4%to 7.3%after these tariff
184、 cuts.In a notice released on 25 April,the General Office of the State Council listed 18 specific measures as part of enhanced efforts to promote foreign trade and optimize its structure.China will implement a policy mix to help enterprises secure orders and expand overseas market,which includes res
185、uming offline exhibitions and trade fairs,smoothing the issuance of visas for overseas businesspeople,and increasing inbound and outbound flights.China will also increase financial support for the trade sector,and through better use of central fiscal policy,increased credit and insurance support and
186、 optimized cross-border settlement services.In a notice released on 29 June,the State Council said that it will implement a range of international trade regulations within five free trade zones(FTZs)Shanghai,Guangdong,Tianjin,Fujian,and Beijing and Hainan Free Trade Port,so as to proactively align w
187、ith rules of the Comprehensive and Progressive Trans-Pacific Partnership(CPTPP).The opening-up measures include 33 items in six key aspects,including promoting innovative development in goods trade,facilitating trade in services,streamlining temporary entry of business personnel,ensuring the healthy
188、 development of digital trade,optimizing the business environment,and establishing robust risk prevention and control mechanisms.On 1 November,the Xinjiang FTZ officially started operations.This is Chinas 22nd FTZ and the first in Chinas northwestern border regions.The Chinese authorities have unvei
189、led a series of measures to promote consumption in recent months,in a bid to stimulate the domestic economy.For example,An executive meeting of the State Council on 29 June announced fresh plans to boost household consumption.New policy steps to boost household consumption will be aligned and coordi
190、nated with measures for renovation of aging residential communities and old neighbourhoods,renovation of homes for the elderly,the building of convenient 17 COUNTRY SOURCING REPORT ISSUE 21 CHINA Country&sourcing updates neighbourhoods,and the improvements to waste material recycling networks,so as
191、to create synergy for expanding consumption.On 20 July,the National Development and Reform Commission(NDRC)released two notices on boosting the consumption of automobiles and electronic products.On the auto consumption front,the government will ease restrictions on car purchases,encourage the replac
192、ement of old cars with new ones,reduce costs on car purchase and use of new energy vehicles(NEVs),etc.On the electronics consumption front,it will promote technological innovation for better electronic products,create more scenarios for electronic products consumption,promote the consumption of home
193、 appliances in rural areas,etc.On 31 July,the NDRC released a notice outlining measures to expand consumption.The NDRC vowed to spur consumption of a wide range of items and services,including NEVs,home appliances,electronics,catering,cultural and tourism sectors,as well as that in rural areas.It al
194、so pledged to support rigid demand for housing and improved living,according to the notice.On 13 August,the State Council issued a guideline regarding further optimizing the foreign investment environment and intensifying efforts to attract foreign investment.Under the guideline,24 specific measures
195、 in six aspects have been put forward,including improving the quality of foreign capital utilization,guaranteeing the national treatment of foreign-invested enterprises,strengthening the protection of foreign investment,improving the facilitation of investment and operation,increasing fiscal and tax
196、 support,and improving ways to promote foreign investment.Industry&sourcing developments The pace of industrial automation across China has been accelerating rapidly in the past few years.China is now the worlds largest market for robots and last year more than half of the industrial robots installe
197、d worldwide were in China.In particular,the use of industrial robots has rapidly expanded in new energy vehicles,lithium batteries,photovoltaics,and other emerging industries.Automation not only helps Chinese factories adapt to the shrinking labour force and rising wages,but also allows them to shif
198、t to higher-end manufacturing tasks.Under the Robot+Application Action Plan released in January this year,China will accelerate the application of robotics in manufacturing,agriculture,logistics,energy,healthcare,education,and elderly services,among other areas,in order to make China a global roboti
199、cs power by 2025.FTAs,trade preferences&facilitation China aims to further open up the country and form a high-standard FTA network by signing more FTAs and upgrading existing ones.China concluded a few FTA negotiations this year.China and Singapore announced on 1 April that the two countries had co
200、mpleted substantive negotiations on the FTA upgrade.China and Ecuador signed an FTA on 11 May.China and Nicaragua signed an FTA on 31 August.China and Serbia signed an FTA on 17 October.China is also negotiating a number of FTAs with its trade partners,such as the ChinaJapanRepublic of Korea FTA,Chi
201、naGulf Cooperation Council FTA,and ChinaHonduras FTA.18 COUNTRY SOURCING REPORT ISSUE 21 Politics&geopolitics The US Department of Commerce added 28 Chinese entities,12 Chinese entities and 42 Chinese entities to the Entity List on 6 March,17 April,and 11 October 2023,respectively,which would severe
202、ly restrict their access to US software and technologies.US Commerce Secretary Gina Raimondo said on 5 September that she does not expect any revisions to the Section 301 punitive tariffs on Chinese imports imposed during Donald Trumps administration until an ongoing review is completed by the US Tr
203、ade Representative(USTR)Office.It is not clear when USTR will conclude the review.In 2022,around US$290 billion of Chinese products were subject to the US punitive tariffs.Infrastructure&environmental sustainability In late March,the Chinese authorities unveiled a five-year transportation infrastruc
204、ture investment plan that would continue heavy investment on highways,high-speed railways,ports,and airports over the next five years(20232027).China aims to form the National 1-2-3 Travel Circle,enabling one-hour commutes within cities,two-hour commutes within city clusters and three-hour commutes
205、between major domestic cities.China will also develop a Global 1-2-3 Logistics Circle,which aims to achieve one-day domestic delivery,two-day delivery to neighbouring countries and three-day delivery to major cities around the world.Chinese consumers are increasingly aware of the environmental impac
206、t of fast fashion.As a result,sustainability-focused business models,such as slow fashion(as opposed to fast fashion)and green production practices,are being adopted in Chinas fashion industry.CHINA Country&sourcing updates 19 COUNTRY SOURCING REPORT ISSUE 21 CHINA Macroeconomic data Apr-23 May-23 J
207、un-23 Jul-23 Aug-23 Sep-23 Quarterly GDP(real yoy growth%)6.3(2Q23)4.9(3Q23)Manufacturing PMI(seasonally adjusted)48.8 49.0 49.3 49.7 50.2 49.5 Purchaser price index of industrial products(yoy growth%)-3.8-5.3-6.5-6.1-4.6-3.6 Producer price index of industrial products(yoy growth%)-3.6-4.6-5.4-4.4-3
208、.0-2.5 Consumer price index(yoy growth%)0.1 0.2 0.0-0.3 0.1 0.0 Exports(yoy growth%)7.1-7.4-12.3-14.3-8.7-6.2 Exports(US$bn)289.8 282.2 284.2 281.5 284.8 299.1 Of which:-Garments(US$bn)12.9 13.3 15.4 16.0 16.2 14.6 -Footwear(US$bn)4.3 4.6 4.5 4.5 4.3 3.9 -Toys(US$bn)3.5 3.2 3.4 3.8 4.5 4.4 Imports(y
209、oy growth%)-8.6-4.9-6.8-12.2-7.3-6.3 Imports(US$bn)203.5 216.7 214.5 201.3 216.5 221.3 Source:National Bureau of Statistics,PRC;China Customs;China Federation of Logistics&Purchasing EXCHANGE RATES Source:State Administration of Foreign Exchange 6.56.76.87.07.17.37.4USD:CNY official exchange rate(Ap
210、ril September 2023)20 COUNTRY SOURCING REPORT ISSUE 21 INDIA Country&sourcing updates Macroeconomic trends Indias exports dropped by 2.6%yoy to US$34.47 billion in September,contracted for the eight consecutive month.Imports also plunged by 15%yoy to US$53.84 billion in the same month.Trade deficit
211、of the country reached US$19.37 billion in September.Indias gross domestic product(GDP)in the April June quarter grew by 7.8%yoy.It was slightly below the Reserve Bank of Indias(RBI)estimate at 8%but was still the fastest growth rate in four quarters.ref However,the RBIs projection of a 6.5%GDP grow
212、th rate for the current fiscal year(April 2023 March 2024)suggests a more conservative outlook.The seasonally adjusted IHS Markit India Manufacturing Purchasing Managers Index(PMI)fell slightly from 58.6 in August to 57.5 in September.Despite the decline,this September marks the 27th straight month
213、that the PMI has remained in the expansionary zone.Indias consumer price-based inflation(CPI)declined to 5.1%in September from 6.8%in August,mainly due to softer prices of food and fuel.In September,Indias wholesale price-based inflation(WPI)was-0.26%,up from-0.52%in August.This is the sixth consecu
214、tive month the WPI was in the deflationary territory.Total foreign direct investment(FDI)inflows into India declined 34%yoy to US$10.9 billion during April-June 2023,dragged by lower inflows to the computer hardware and software,telecom,auto and pharmaceutical industries.FDI inflows during January-M
215、arch 2023 also contracted 40.6%yoy to US$9.3 billion.The Indian rupee closed at 83.2 per US dollar on 27 September,depreciating by 0.5%since 1 January this year,according to the International Monetary Fund.Policies®ulations In November 2022,the commerce ministry decided to resume the practice of
216、releasing monthly export and import data once a month,so as to provide a clearer picture of the countrys trade.The ministry has released the trade data twice a month since October 2020,i.e.,the preliminary data in the first week and the revised data by the middle of the month.The preliminary trade d
217、ata were mainly collected from the electronic data exchange(EDI)portals.The revised numbers,however,were based on the data collected from both EDI and non-EDI portals.This change helps correct the confusion caused by the stark contrast between the preliminary trade data and the revised data for the
218、same month.Government officials commented that the data variations were due to the delay in data collection from non-EDI portals and some special economic zones.In March,the Indian government approved a budget of 44.5 billion Indian rupees to set up seven PM Mega Integrated Textile Regions and Appar
219、el(PM MITRA)Parks for the textile industry.The seven sites are Tamil Nadu,Telangana,Gujarat,Karnataka,Madhya Pradesh,Uttar Pradesh,and Maharashtra.The government envisions the parks will attract 700 billion rupees of investment and create 2 million jobs.On 17 September,the Prime Minister of India la
220、unched the National Logistics Policy(NLP),which aims at ensuring quick last mile delivery,eliminating transport-related challenges,reducing transport lead time and costs,and preventing wastage of agricultural products.21 COUNTRY SOURCING REPORT ISSUE 21 It is hoped that the NLP will help lower the t
221、ransportation,warehousing,and inventory costs of the country,targeting at reducing the overall logistics cost to around 8%of GDP in the next 5 years.Ultimately,the NLP will also help improve the competitiveness of Indian goods,enhance economic growth,and increase employment opportunities.Major progr
222、ams under the NLP include:-A Comprehensive Logistics Action Plan,which comprises integrated digital logistics systems,standardization of physical assets,benchmarking service standards,human resource development,capacity building,development of logistics parks,etc.-A Unified Logistics Interface Platf
223、orm which brings all the digital services related to the transportation sector into a single portal.-A new digital platform Ease of Logistics Services(E-logs)which connects industries and government agencies to jointly handle operational issues.The Indian government has extended the Remission of Dut
224、ies and Taxes on Export Products(RoDTEP)scheme by nine months until 30 June 2024.The RoDTEP scheme,which provides duty and taxes remission for a wide range of export items,was first introduced in January 2021 and has undergone multiple extensions since then.The last extension expired on 30 September
225、 2023.Between January 2021 and March 2023,270.2 billion rupees were spent under the RoDTEP scheme.For the current fiscal year,a budget of 150.1 billion rupees has been allocated to support 10,610 product lines.Industry&sourcing developments Union Textiles Minister Piyush Goyal announced in June that
226、 India will soon have its own standard body sizes for the Indian apparel sector,upon the completion of a nationwide survey conducted by the National Institute of Fashion Technology(NIFT).In 2019,the Ministry of Textiles has launched the INDIAsize project,aiming to create a body size chart to improve
227、 the fit of garments and cater to the demands of Indian body types.Currently,both international and domestic brands follow the US and the UK standards for clothing sizes.According to the NIFT,the project involves collecting anthropometric data from over 25,000 individuals aged between 15 to 65 years
228、,using 3D body scanning technology.The Minister also mentioned that the Indian footwear size will also be standardized,but it will require more time for the process to be completed.Labour&workplace compliance The Delhi government announced to raise the minimum wages of workers in the unorganized sec
229、tor,effective 1 April 2023.Under the new rates,the monthly wage of skilled workers increases from 20,357 rupees to 20,903 rupees.Semi-skilled workers receive a pay raise of 494 rupees,bring their monthly salary to 18,993 rupees.Unskilled workers also see their minimum wage raised from 16,792 rupees
230、to 17,234 rupees.According to the 19th Periodic Labour Force Survey published by the National Sample Survey Office,the unemployment rate for citizens aged 15 years and above in urban areas dropped to 6.6%during April-June 2023 from 7.6%in the same period of 2022.INDIA Country&sourcing updates 22 COU
231、NTRY SOURCING REPORT ISSUE 21 In terms of gender,the unemployment rate(aged 15 years and above)for males and females declined to 9.1%and 5.9%in April-June 2023,respectively,from 9.5%and 7.1%in the same period of 2022.The labour force participation rate(aged 15 years and above)increased to 48.8%in Ap
232、ril-June 2023 from 47.5%in the same period of 2022.FTAs,trade preference&facilitation On 29 December 2022,the India-Australia Cooperation and Trade Agreement(ECTA)entered into force.The ECTA is expected to cover 90%of the bilateral trade between India and Australia.On the one hand,India will benefit
233、 from the preferential market access provided by Australia on all of its tariff lines.On the other hand,India will offer preferential access to the Indian market to Australian goods on over 70%of tariff lines.These goods include raw materials and intermediate goods such as coal,mineral ores,and wine
234、s.The ECTA is an interim trade deal.Australia and India are currently negotiating to widen the scope of the ECTA to a more ambitious free trade agreement,the Comprehensive Economic Cooperation Agreement(CECA).The ECTA was set to be the foundation for resuming the CECA negotiations.Australia and Indi
235、a launched the CECA negotiations in May 2011,and then decided to suspend the talks in 2016 after nine rounds of negotiations,pending the outcome of other multilateral negotiations.In March 2023,India and Australia committed to conclude the negotiations for the CECA by the end of this year,aiming to
236、boost bilateral trade to US$100 billion.The CECA is also expected to create new employment opportunities and improve the living standards of the two countries.On 10 March 2023,US commerce secretary Gina Raimondo and Indian Minister of Commerce&Industry Piyush Goyal signed a memorandum of understandi
237、ng(MoU)in New Delhi on establishing a semiconductor supply chain and innovation partnership under the framework of the IndiaUS Commercial Dialogue,which was re-launched after a gap of three years.The MoU aims to establish a collaborative mechanism between the two countries on the resiliency and dive
238、rsification of the semiconductor supply chain.The MoU also targets to facilitate commercial opportunities and the development of innovative ecosystems.According to Gina Raimondo,India could become a key supplier in the semiconductor sector and the entire electronics supply chain.The two parties also
239、 agreed to further enhance their commercial collaboration and explore market potentials across multiple sectors,including digital and emerging technologies.In addition,the US and India announced the launch of a new Working Group on Talent,Innovation,and Inclusive Growth.Indian Prime Minister Narendr
240、a Modi concluded a state visit to the US at the invitation of President Joe Biden in this June.During the visit,the two countries successfully resolved six trade disputes at the World Trade Organisation(WTO),with three cases initiated by each side.The disputes addressed countervailing measures on ce
241、rtain hot-rolled carbon steel flat products from India,certain measures related to solar cells and modules,measures related to the renewable energy sector,export-related measures,and measures on steel and aluminium products from the US.Additionally,India has agreed to remove retaliatory customs duti
242、es on 28 American products.These duties were imposed in INDIA Country&sourcing updates 23 COUNTRY SOURCING REPORT ISSUE 21 INDIA Country&sourcing updates response to the USs import duty of 25%on steel products and 10%on certain aluminium products in 2018 on grounds of national security.This April,In
243、dia and Russia began talks on a free trade agreement(FTA).According to Russian Deputy Prime Minister Denis Manturov,who is also the trade minister,Russia is looking forward to intensifying negotiations on the FTA with India,together with the Eurasian Economic Commission.The FTA will help the two cou
244、ntries to collaborate in various areas such as oil and gas,gold and diamond,timber,pharmaceuticals,agriculture,aviation,railways,and logistics.The India-Russia FTA negotiations represent a deepening economic relationship between the two countries,despite calls from Western countries for India to dis
245、tance itself from Russia following the Russia-Ukraine conflict started in February 2022.On 16 May,the first Ministerial meeting of India-European Union Trade and Technology Council(TTC)was held in Brussels.Representatives from both India and the EU agreed on the necessity to expedite the ongoing FTA
246、 negotiations.However,a number of trade disputes between the two parties have to be addressed.One of the disputes is that India plans to file a complaint to the WTO over the EUs proposal to impose 20%to 35%tariffs on imports of high-carbon goods like steel,iron ore and cement from India.India and th
247、e EU have agreed to a constant engagement before Carbon Border Adjustment Mechanism(CBAM)or Carbon Tax on exports to the EU takes effect in January 2026.Besides,Indias exports of smartphones,information technology products and services to EU countries could be hit by the EUs Foreign Subsidies Regula
248、tions(FSR)that came into effect from 14 July.The proposed FSR prohibits foreign subsidies and grants the European Commission(EC),the executive arm of the EU,to investigate cases where foreign subsidies distort competition within the EU.With the FSR,the EC can now investigate if the Indian imports ha
249、ve received any incentives like Production Linked Incentives,Faster Adoption and Manufacturing of Electric Vehicles(FAME)or export benefits in India.In August 2023,India and the ASEAN agreed to fast track negotiations for the review of ASEAN-India Trade in Goods Agreement(AITIGA),which was signed in
250、 2009 and implemented in January 2010.The economic ministers meeting was preceded by AITIGA Joint Committee meeting,which deliberated the roadmap for the review and finalized the terms of reference and the work plan for the review negotiations.FTA negotiations between India and the UK are making goo
251、d progress and both countries are committed to concluding the talks as early as possible.The 13th round of talks was concluded in September.The UK trade negotiators were in India in October for further talks on the Bilateral Investment Treaty,to be signed along with the FTA.Other topics According to
252、 World Population Prospects 2022 released by the United Nations(UN),Indias population is projected to reach 1.67 billion by 2050,while Chinas population is expected to drop to 1.3 billion by then.The UN estimated that,by end of this April,India has already surpassed China to become the most populous
253、 country in the world,with 1.43 billion people,according to the latest UN data.The UN expected that Indias population will persistently grow in the coming three decades and reach its peak at about 1.7 billion in 2064.24 COUNTRY SOURCING REPORT ISSUE 21 INDIA Country&sourcing updates Currently,the co
254、untry has the largest youth population in the world(254 million at ages 15-24),which is a vibrant workforce with a strong potential for growth and development.The United Nations Population Fund(UNFPA)expects that the aged population in India will nearly double to reach 192 million by 2030,mostly liv
255、ing in southern and western states.The UNFPA also expects that every fifth Indian will become a senior citizen by 2050.It is time for the Indian government to plan for sustainable labour supply,and health and economic security of senior citizens.A report by the People Research on Indias Consumer Eco
256、nomy(PRICE)and Indias Citizen Environment predicts that Indias middle class will almost double to 61%of the total population by 2047,up from 31%in the 2020-21 fiscal year.The report attributes the increase to continuing political stability and economic reforms,as well as a sustained annual economic
257、growth rate of around 6%to 7%over the next 25 years.According to the report,Indias middle class is expected to grow significantly in the coming years.By the 2030-31 fiscal year,the middle class is projected to reach 715 million people,and to reach 1.02 billion people by 2047,when the total populatio
258、n of India is projected to be 1.66 billion.The report also states that the middle-class accounts for half of Indias income,expenditure and saving,and is expected to be responsible for 55%of the incremental consumption by 2031.Amitabh Kant,former NITI Aayog CEO and Indias G20 Sherpa,comments that as
259、the number of middle-class households rises,demand for quality health care,education,housing,consumer goods,and other services,will increase;and the government should increasingly focus on education,health,and job creation.Indias vision of becoming a fully developed country by 2047 implies that the
260、middle class needs to be a key driver of the countrys growth story.25 COUNTRY SOURCING REPORT ISSUE 21 INDIA Macroeconomic data Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Quarterly GDP(real yoy growth%)7.8(1Q23)Index of industrial production(yoy growth%)4.2 5.2 3.8 5.7 10.3 -Manufacturing PMI(S&P Glo
261、bal)57.2 58.7 57.8 57.7 58.6 57.5 Wholesale price index(yoy growth%)-0.8-3.5-4.2-1.2-0.5-0.3 Consumer price index(yoy growth%)4.7 4.3 4.8 7.4 6.8 5.0 Exports(yoy growth%)-12.7-10.3-22.0-10.0 3.8 -2.6 Exports(US$mn)34,661.8 34,982.7 32,966.4 34,520.7 38,439.6 34,465.3 Of which:-Knitwear(US$mn)526.6 5
262、87.1 612.1 584.4 560.0 -Woven garments(US$mn)686.9 649.4 637.5 558.3 574.3 -Footwear(US$mn)188.0 229.9 232.0 245.7 233.6 -Furniture(US$mn)183.4 185.1 191.8 198.2 226.3 -Imports(yoy growth%)-14.1-6.6-17.5-17.0-5.2-15.1 Imports(US$mn)49,895.8 57,101.7 53,099.3 52,955.1 58,637.7 53,842.6 Financial year
263、 in India starts in April.Source:Ministry of Statistics and Programme Implementation,Ministry of Commerce and Industry,S&P Global PMI reports EXCHANGE RATES Source:Bloomberg 81.081.481.882.282.683.083.483.8USD:INR spot rate(April September 2023)26 COUNTRY SOURCING REPORT ISSUE 21 INDONESIA Country&s
264、ourcing updates Macroeconomic trends Indonesias economy grew by 5.3%yoy in 2022,significantly improving from the GDP growth of 3.7%in 2021.In the second quarter of 2023,Indonesias economy grew by 5.2%yoy.In September,Indonesias exports plunged by 16.2%yoy to US$20.1 billion,affected by the impact of
265、 El Nino and the lower commodity prices in the global market.The country posted a US$3.4 billion trade surplus in the month,marking the 41st consecutive month of trade surplus for the country since May 2020.In the same month,the US,China,and the Philippines emerged as the top contributors to Indones
266、ias trade surplus,while Australia,Thailand,and Brazil recorded the highest trade deficits with Indonesia.The manufacturing sector has been expanding for 25 consecutive months,with a Purchasing Managers Index(PMI)level of 52.3 in September,albeit at a softer pace since May.The September figure still
267、reflected Indonesias resilience to withstand global economic uncertainties.During the first half of 2023,Indonesia attracted around US$45.2 billion in foreign and domestic investments,reflecting a year-on-year increase of 16.1%.This amount represented 48.5%of its target for 2023.Over the past years,
268、Singapore has been Indonesias top source for foreign direct investment(FDI).FDI from Singapore amounted to US$9.4 billion in 2021 and increased to US$13.3 billion in 2022.In January-June this year,Singapore remained the largest contributor of foreign investment to Indonesia,reaching US$7.7 billion.I
269、t was followed by China with US$3.8 billion,Hong Kong SAR,China with US$3.5 billion,and Japan with US$2 billion.During this six-month period,the majority of FDI inflows went to basic metals,metal goods,non-machineries,and equipment industry,with a total value of US$5.4 billion.The transport,warehous
270、e,and telecoms sector ranked second,attracting FDI inflows of US$3.2 billion.Besides,West Java province attracted the largest amount of FDI,reaching US$4.5 billion in the first half of 2023.Indonesias inflation rate was 2.3%yoy in September 2023,a consistent decline since September 2022.The inflatio
271、n occurred due to increases in prices of all expenditure categories,including foods and beverages,tobacco products,clothes and footwear,housing,water,electricity,household fuel,household tools,equipment,routine maintenance,healthcare,transportation,information,and communications,etc.The Indonesian r
272、upiah closed at 15,487 per US dollar on 29 September,depreciating by 0.7%since 1 January this year.Policies®ulations Effective June 2023,the Indonesian government has banned bauxite ore exports and further encourage the development of the domestic bauxite processing and refining industry.Besides,
273、President Joko Widodo announced in early February that he would reveal another policy to ban the exports of raw copper.Instead of exporting domestic natural resources,the Indonesian government has decided to develop the downstream processing industry of domestic natural resources to increase the val
274、ue added of its exports.Compared with the exporting of bauxite ores,the downstream processing industries of bauxite will generate higher value added to the economy and create more jobs.Through the industrialization of the bauxite industry,the President expects that the state revenue will 27 COUNTRY
275、SOURCING REPORT ISSUE 21 enjoy a nearly three-fold increase from 21 trillion rupiahs to 62 trillion rupiahs.Industry&sourcing developments According to Coordinating Minister for Maritime Affairs and Investment,Indonesias exports of processed nickel ballooned to US$33.8 billion in 2022,up from US$8.1
276、 billion in 2021.In 2022,President Joko Widodo banned exports of nickel ore,but allowed exports of higher value nickel products,forcing companies to process and manufacture onshore.The aim of the export ban on nickel ore is to strengthen domestic processing facilities,bring back the downstream part
277、of the nickel supply chain to Indonesia,and spur job creation and economic development in Indonesia.Besides,Indonesia is trying to make itself indispensable for the electric vehicle(EV)battery industry,which uses the metal extensively.The Indonesian government has revealed its ambition to become one
278、 of the worlds top three EV battery manufacturers by 2027.To fulfill its aspiration,Indonesia earnestly attracts investment in EV batteries and other EV sectors by leveraging its rich nickel resources.Labour&workplace compliance In December 2022,the Jakarta provincial government issued Jakarta Gover
279、nor Decree No.1153 of 2022 regarding the 2023 Jakarta provincial minimum wage(UMP).Under the new regulation,Jakartas UMP will increase to 4,901,798 rupiahs per month,effective 1 January 2023.According to local media,apart from the minimum wage adjustment,the government also launched other policies t
280、o increase the welfare of workers with Jakarta ID,including assistance for transportation services and education and provision of food at affordable prices.FTAs,trade preferences&facilitation Indonesian Trade Minister Zulkifli Hasan and Indian Commerce and Industry Minister Piyush Goyal held a meeti
281、ng in New Delhi on 14 March.During the meeting,the Indonesian Trade Minister envisioned that the two countries can begin the negotiation on the bilateral Preferential Trade Agreement(PTA),which has been under consideration since 2020.In the meeting,the two ministers discussed several issues related
282、to bilateral trade,including the exports of Indonesian tires and fiber products to India and the imports of Indian buffalo meat,automotive,sugar,and rice into Indonesia.They also discussed strengthening bilateral cooperation in various sectors such as information technology,health,textiles,furniture
283、,education,and human resources.Indonesia and the EU completed the 14th round of negotiations for the Indonesia-EU Comprehensive Economic Partnership Agreement(IEU-CEPA)in Belgium in mid-May.In this round of negotiations,18 primary issues were discussed,including trade in goods,rules of origin,trade
284、in services,trade security,investment,government procurement,transparency and regulatory practice,dispute resolution,institutional provisions,and intellectual property rights.Negotiations for the IEU-CEPA have been ongoing since 2016.Indonesia and the EU are aiming to conclude the negotiations by th
285、e end of this year.On 23 May,Indonesia and Iran signed a Preferential Trade Agreement(PTA)after seven rounds of negotiations over the course of three years.INDONESIA Country&sourcing updates 28 COUNTRY SOURCING REPORT ISSUE 21 INDONESIA Country&sourcing updates Under the PTA,Iran will expand market
286、access for Indonesian imports,including processed food,rubber,pharmaceutical products,paper,textiles,footwear,palm oil,coffee,and spices,while Indonesia will offer reduced tariffs for Irans imports,including fossil fuel,oil,and aluminum.Coordinating Economic Minister Airlangga Hartarto participated
287、in the Indo-Pacific Economic Framework for Prosperity(IPEF)ministerial meeting in Detroit on 26-27 May.During the meeting,the minister emphasized the importance of critical minerals and proposed that the issue should be included in the discussion of Pillar I of the IPEF Trade.Critical minerals are t
288、he essential materials for developing defense and green technology industries.Their supplies may be disrupted by geological scarcity,geopolitical uncertainties,and other instabilities.According to the US Inflation Reduction Act 2022,nickel is classified as a critical mineral,which is important for I
289、ndonesias development of the electric vehicle ecosystem,particularly as a major exporter of electric vehicle batteries to the US and other markets.Indonesian Minister of Trade Zulkifli Hasan and Malaysian Minister of International Trade and Industry Tengku Zafrul Aziz signed an update to the Indones
290、ia-Malaysia Border Trade Agreement(BTA)in Kuala Lumpur on 8 June.The BTA,which was originally put into effect in 1970,has been revised to reflect the latest circumstances and conditions,with a focus on meeting the needs of the people,facilitating trade,improving regulatory mechanisms,and enhancing s
291、upervision.Although both Indonesia and Malaysia are ASEAN members and no customs duties should have been applied,the BTA includes several exceptions to export and import requirements,aiming to alleviate the burden on people at the border.After signing the BTA,both countries will ratify it according
292、to their respective provisions before it can be implemented.The BTA update is expected to benefit citizens living in the border areas of both countries.Infrastructure&environmental sustainability In mid-March,Indonesia and Singapore signed an MoU on developing Indonesias new capital Nusantara(IKN),o
293、n the sidelines of a leaders retreat between Indonesian President Joko Widodo and Singaporean Prime Minister Lee Hsien Loong in Singapore.During the leaders retreat,20 private companies from Singapore submitted letters of intent to invest in IKN.According to the Singaporean Prime Minister,the MoU ai
294、ms to accommodate cooperation between the two countries in building,financing,and innovation of smart and sustainable infrastructure.Singapore will support Indonesia through knowledge-sharing activities,research activities,and joint development.Singapores interest in participating in the IKN project
295、 is a significant step for the Indonesian government to attract investment for the IKN development.On 2 October,Indonesias Jakarta-Bandung high-speed railway,a crucial infrastructure project under Chinas Belt and Road Initiative,commenced its commercial operations.This train is the first high-speed
296、rail transportation in Southeast Asia.The 600-capacity bullet train Whoosh has a top speed of 350 km per hour,traveling between the capital Jakarta and Bandung in just 45 minutes.This is a significant improvement compared to the previous three-hour train journey covering the 140 km distance.Accordin
297、g to President Widodo,the Jakarta-Bandung high-speed train represents an efficient and integrated mass transportation system,29 COUNTRY SOURCING REPORT ISSUE 21 INDONESIA Country&sourcing updates symbolizing modernization in public transport and seamless connectivity with other modes of transportati
298、on.On 8 October,the Minister of Transportation stated that the blueprint for the Jakarta-Surabaya high-speed railway has been devised.If the project is realized,the travel time between Jakarta and Surabaya will become 3.5 hours,down from the current 11 hours by train.Other topics Announced in late J
299、anuary 2023,Bank Indonesia(BI)will issue the proof of concept for Digital Rupiah.The digital rupiah concept is also known as the Central Bank Digital Currency.The BI is in the process of finalizing the issuance of digital rupiah and targets to complete the proof of concept in March 2024.Two types of
300、 Digital Rupiah will be issued:-Wholesale Digital Rupiah(w-Digital Rupiah)will only be used by central bank-appointed parties and distributed for wholesale transactions.-Retail Digital Rupiah(r-Digital Rupiah)will be used by the public and distributed for retail transactions.The Digital Rupiah proje
301、ct complements various initiatives of the BI in driving the national digital transformation agenda.Through the project,BI aimed to develop a digitized economy through the digitization of payments and decentralization of the rupiah.The Digital Rupiah is believed to be a safer and more efficient curre
302、ncy than the physical currency and reserve accounts.The development of the Digital Rupiah comprises three phases.-1st phase:BI will explore the usage of w-Digital Rupiah with functions for issuance,redemption,and transferring funds between parties.-2nd phase:the functions and services of the w-Digit
303、al Rupiah will be expanded for supporting transactions in financial markets.-3rd phase:an end-to-end integration of the w-Digital Rupiah and the r-Digital Rupiah will be tested.Indonesia regained its upper-middle income status after losing it in 2021 due to the COVID-19 pandemic.In July,the World Ba
304、nk released its country classifications by income level and upgraded Indonesias status to an upper-middle income country from a lower-middle income country.The Word Bank issues the country classification every July,categorizing countries into four groups based on their gross national income(GNI)per
305、capita,converted into US dollars under the latest exchange rate.The groups are low income(US$1,135),lower-middle income(US$1,136-4,465),upper-middle income(US$4,446-13,845),and high income(over US$13,845).These classifications determine a countrys eligibility to use the World Bank facilities,such as
306、 loan pricing.Indonesias GNI per capita surged by 9.8%to US$4,580 in 2022 from US$4,170 in 2021,as reported by the World Bank.The upgrade in country status reflects Indonesias economic resilience and sustainable growth in recent years.On 20 July,Coordinating Minister for Economic Affairs Airlangga H
307、artarto announced that Indonesia is actively pursuing membership in the Organization for Economic Cooperation and Development(OECD).According to the minister,Indonesia believes it deserves to be an OECD member because it regained the status as an upper middle-income country,successfully organized th
308、e G20 Summit in 2022,and led the ASEAN Summit amid difficult situations such as the COVID-19 pandemic,geopolitical tensions,and climate change.To attain OECD membership,Indonesia will adopt higher standards in its legislative processes,including the development of laws 30 COUNTRY SOURCING REPORT ISS
309、UE 21 and the enforcement of regulations and standards across multiple ministries and institutions.These elevated benchmarks aim to ensure improved quality and effectiveness in the countrys legislative procedures.If Indonesia becomes an OECD member,it would be the third Asian country,following Japan
310、 and South Korea,to join the organization.INDONESIA Country&sourcing updates 31 COUNTRY SOURCING REPORT ISSUE 21 INDONESIA Macroeconomic data Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Quarterly GDP(real yoy growth%)5.2(2Q23)Manufacturing PMI(S&P Global)52.7 50.3 52.5 53.3 53.9 52.3 Real retail sales
311、 index(yoy growth%)1.5 -4.5 7.9 1.6 1.1 1.0 Consumer price index(yoy growth%)4.3 4.0 3.5 3.1 3.3 2.3 Exports(yoy growth%)-29.4 0.9 -21.2-18.4-21.2-16.2 Exports(US$mn)19,284.1 21,706.8 20,605.1 20,862.2 21,998.0 20,759.3 Of which:-Textile and textile products(US$mn)736.7 1,045.9 1,032.6 1,074.4 1,236
312、.4 -Footwear(US$mn)443.0 599.1 529.7 527.6 558.2 -Furniture(US$mn)123.1 157.9 139.1 140.5 144.7 -Sports requisites(US$mn)36.5 59.5 59.5 65.9 67.0 -Imports(yoy growth%)-22.3 14.3 -18.3-8.3-14.8-12.5 Imports(US$mn)15,347.6 21,279.6 17,150.5 19,570.3 18,879.8 17,341.5 Source:Statistics Indonesia,Bank I
313、ndonesia,S&P Global PMI reports EXCHANGE RATES Source:Bank Indonesia 14,00014,20014,40014,60014,80015,00015,20015,40015,60015,800USD:IDR buy rate(April September 2023)32 COUNTRY SOURCING REPORT ISSUE 21 PAKISTAN Country&sourcing updates Macroeconomic trends Pakistans economy experienced a difficult
314、time in the 2023 fiscal year(July 2022 to June 2023,FY2023),with a GDP growth of only 0.3%yoy during the period.Since the start of fiscal year 2024(July 2023 to June 2024,FY2024),Pakistan has shown some signs of recovery although its a long road ahead.The International Monetary Fund(IMF),in its Worl
315、d Economic Outlook report published on 10 October 2023,kept Pakistans economic growth forecast for FY2024 unchanged at 2.5%.In July this year,the IMF approved a nine-month Stand-by Arrangement(SBA)in the amount of about US$3 billion,which will temporarily ease a debt default pressure on the country.
316、However,long-term economic stability and sustainable growth can only be achieved through fundamental economic reform,which has taken years of Pakistans efforts and needs more time and strong determination going forward.The Large Scale Manufacturing Industries output dropped by 10.3%yoy in FY2023,but
317、 decreased only 1.1%yoy in July 2023,the first month of FY2024.The monthly inflation rate in September 2023 was 31.4%yoy,and lower when compared to the record high of 38.0%in May 2023;however,Septembers rates are a slight increase when compared to 27.4%yoy in August and 28.3%yoy in July.The two mass
318、ive fuel price hikes witnessed in August and the upward adjustment in energy tariffs are expected to increase inflationary pressures in the coming months and continue to put heavy burden on Pakistans people and economy.The IMF,in its latest forecast in October,set Pakistans inflation rate at 23.6%fo
319、r FY2024,a bit higher than its April forecast of 21.9%.Pakistans exports were down 12.7%yoy to US$27.7 billion in FY2023.In the first three months of FY2024(July-September 2023),exports shrank 3.8%yoy to US$7.2 billion.Meanwhile,Pakistans trade deficit narrowed by 42.9%yoy to US$27.6 billion in FY20
320、23 and by 42.3%yoy in the first three months of FY2024 to US$5.3 billion,a result of the governments strict measures to limit imports.Net FDI inflows into Pakistan were US$1,455.8 million in FY2023,a 24.8%yoy drop from US$1,935.9 million in the previous fiscal year.In the first two months of FY2024,
321、net FDI inflows increased by 16.1%yoy to US$233.8 million.During the July-August 2023 period,the power sector(thermal,hydro,and coal generation)attracted the highest FDI of US$97.6 million(41.7%of the total value of net FDI inflows),followed by oil&gas explorations(US$29.2 million,12.5%),pharmaceuti
322、cals&OTC products(US$25.4 million,10.9%),and the financial business sector(US$24.3 million,10.4%),as data from the State Bank of Pakistan showed.China was the largest foreign investor in Pakistan during this period,with an investment of US$50.4 million,accounting for 21.6%of the total value of net F
323、DI inflows.The Netherlands was the second largest foreign investor during this period(US$42.6 million,18.2%),followed by Switzerland(US$36.5 million,15.6%),Hong Kong SAR,China(US$33.0 million,14.1%),and the United Arab Emirates(US$17.1 million,7.3%).The increase in net FDI inflows in the first two m
324、onths of FY2024 showed that foreign investors have more confidence in Pakistans ability to walk out of its debt crisis,especially with the signing of the SBA and the support from friendly countries like China,Saudi Arabia,and the 33 COUNTRY SOURCING REPORT ISSUE 21 United Arab Emirates.These countri
325、es had been trying hard to help the country tackle its debt crisis and secure more funds from international organizations by rolling over existing loans and providing billions of US dollars of new loans over the last three months of FY2023.The Pakistani rupee closed at 287.8848 against the US dollar
326、 on 28 September 2023,a year-to-date depreciation of 21.4%.Industry&sourcing developments Textile exports is the biggest export sector of Pakistan,contributing about 60%to the total.Presently,Pakistan reports that it has 6,300 registered textile and clothing manufacturing companies,along with over 1
327、,800“associations of persons”in this sector.Of these,2,000 are registered as textile and clothing exporters with the Ministry of Commerce.The sector experienced a troubling trend of negative growth right from the beginning of FY2023.Textile exports fell 14.6%yoy to US$16.5 billion,while accounting f
328、or 59.5%of Pakistans total export value in the fiscal year.The three key causes of the export decline are the discontinuation of concessionary energy tariffs for the textile sector starting from 1 March 2023,the increase in local cotton prices,and higher financing costs.During the same period,the im
329、ports of textile machinery declined by 57.0%a sign that expansion or modernisation of the textile sector will slow down in the near future.Import bans,exchange rate fluctuations,high energy costs,elevated interest rates,reduced cotton production,and overall political and economic uncertainty continu
330、e to inflict doubt to the export sector in FY2024.In the first three months of FY2024(July-September 2023),textile exports dropped by 10.0%yoy to US$4.1 billion,which accounted for 57.5%of the countrys total export value during this period.However,a positive trend in the textile sector has been obse
331、rved by Chinese investors in Pakistan,who see an opportunity to further modernise the industry for more efficient production.-Many major fabric categories in Pakistans textile industry use larger amounts of cotton,while having lower profit margins comparing with competing South Asian countries.Due t
332、o the current shortage of cotton yarn,local companies have increased the proportion of polyester applications.-Digital textile printing is also increasingly used in Pakistan as it offers better and higher-definition textile print design and reduces effluents and energy usage.Even some small-scale fa
333、ctories have advanced textile materials and technologies,such as polyurethane coating,aramid finishing,waterproof finishing,etc.-Chinese manufacturers that specialise in textiles auxiliaries and organic silicone products have been joining hands with local partners to bring technological innovation support to the textile printing and dyeing industry in Pakistan.Pakistans cotton arrivals(the amount