OPPORTUNITIES FOR MANUFACTURING GROWTH AND SUPPLY CHAIN OPTIMIZATION IN SOUTHEAST ASIA
Manufacturing companies investing in Southeast Asia can accelerate growth by having a deep understanding of the operating landscape and maintaining agile supply chain strategies. Situated at the confluence of major trade routes with US$3.4t of global trade passing through each year, Southeast Asia (SEA) has been a focal point for cooperation and tensions, among both regional and global powers. Amid rising global trade and technology tensions, a new EY report, Investing in Southeast Asia: Reimagining manufacturing and supply chains, highlights that SEA nations have now surpassed the US as China’s secondlargest trade partner. Rising imports from China have also put downward pressure on prices in the region. Despite these roadblocks, SEA is poised for growth in the upcoming years. With a combined GDP of over US$3.2t[1], it is currently the fifth-largest economy in the DD
world. Home to 656 million people, a young demographic and a growing middle class, the region holds immense potential, seen in the gross domestic product (GDP) growth in the region over the years. Multiple free trade agreements (FTAs) between SEA nations, along with its loosening tariffs, also attracts crossborder trade. Initiatives like the Southeast Asian Manufacturing Alliance (SMA) and Regional Comprehensive Economic Partnership (RCEP) connect companies with a network of trusted partners to navigate and grow in the diverse SEA region with confidence while being economically integrated to around 30% of the world. For companies and investors in search of their next phase of growth, SEA brings opportunities for integration of production processes and leverage the region’s unique natural resources, structural capabilities and labor skills. Further, the region’s digital economy is projected to exceed US$240b by 2025.
D [1] “ASEAN Matters for America / America Matters for ASEAN” , East West Center, https://www.eastwestcenter.org/system/tdf/private/aseanmatters2017.pdf ?file=1&type=node&id=36244, accessed 20 September 2021
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