One of the striking aspects of the recent visit by United States Vice-President Kamala Harris to Singapore and Vietnam was her emphasis on the need for more resilient supply chains in South-east Asia - a topic that was the main focus of her discussions with business leaders in both countries. The issue of supply chains has emerged as a priority for the Biden administration for at least two reasons. One is the fact that the Covid-19 pandemic has led to severe disruptions in supplies of a range of goods and components - many of which are made in Asia - arising from production stoppages and logistical breakdowns. Of particular importance have been the interruptions in the supply of semiconductors that have led to production delays in the auto and consumer electronics industries, among others.
A second reason why supply chains - especially those involving producers in South-east Asia - are high on the agenda of the US government is its desire to encourage US manufacturers to reduce their dependence on China by relocating more of their production from the mainland to South-east Asia. This process is already under way. For instance, since 2019, US imports of electronics from the region have increased while those from China have declined. Vietnam, in particular, has been a major beneficiary of the relocation of production from China in several industries.