Supply chain shifts and reshoring to have mixed credit impact on Asean: Moody's

SHIFTING supply chains as countries reconfigure trade relationships following the Covid-19 pandemic will result in mixed credit implications for the Association of Southeast Asian Nations (Asean), said Moody's Investors Service in a report.

"While the technological capabilities of the Asean region still lag those of more advanced Asian economies, particularly in electronics, a general openness to foreign direct investment and lower production costs will offer some advantages," said Moody's assistant vice president and analyst Deborah Tan.

"We expect many governments and companies will reduce their dependence on China in global value chains moving forward, driven by the coronavirus outbreak, the China-US trade conflict, and heightened national concerns over economic security," she added.