ASEAN trade grows from strength to strength

As ASEAN trade grows rapidly, so does its economic clout – the combined Gross Domestic Product (GDP) of the region is set to reach USD3 trillion by 2024, making it among the top ten economies in the world were it a single country. What key trends will emerge as ASEAN trade forges ahead? Leon Perera, Chief Executive Officer, of Spire Research and Consulting shared his insights in China Daily – Asia Weekly.

The share of intra-ASEAN trade out of the region’s total trade has grown to over 27% in 2014 from 17% in 1990. The ASEAN region continues to be an export-oriented global manufacturing and services hub for thousands of multinationals. Economic growth has led to the rise of the upper and middle classes and an increase in the consumption of luxury goods.

Perera noted that Southeast Asia still imports aircraft and industrial equipment from Europe and the U.S. Moreover, toys and consumer electronics continue to be heavily imported from China. So there is no question of ASEAN becoming a self-sufficient region. It is very much plugged into the global trading system and global supply chains.

Malaysia and the Philippines continue to be important players in the global IT and business process outsourcing sectors. Thailand and Indonesia are expected to become major hubs for automotive production, which will drive import of components and parts. Indonesia’s production of commercial vehicles and cars is set to reach 1.9 million units by 2025 versus 1.27 million units in 2014. Interestingly, Vietnam has emerged as the new hub for production of electronic items such as printers, mobile phones and semiconductor chips as multinationals reposition some of their production away from China to lower costs.

One of the key sectors expected to grow is green products and services, which consist of eco-friendly technologies. Trade liberalization could possibly lead to a 7-13% increase in the trade volume for low-carbon technologies.

https://www.spireresearch.com/newsroom/media/asean-trade-grows-from-strength-to-strength/

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