If considered one market, ASEAN would be the fifth largest economy in the world. Growing at approximately 5% a year, it may rank as the fourth largest economy by 2030.
One of the biggest trends of the past 30 years has been the development of global supply chains. When they began those chains were typically linear, with Chinese manufacturers catering for the demands of Western consumers. But over time - both in terms of supply and demand - new markets and regions have emerged to challenge the traditional linear model. Today's global supply chains are increasingly complex and interconnected and span an ever increasing share of the world.
One of the beneficiaries of more dispersed trade flows has been ASEAN, so called since 1967 when Indonesia, Malaysia, the Philippines, Singapore and Thailand signed the ASEAN Declaration. ASEAN has prospered in recent years, especially since the creation of the ASEAN Economic Community (AEC) in 2015 and is well placed to progress further, especially against a backdrop of a US and China trade dispute that is disrupting longstanding trade patterns.
While the challenges must not be minimised, as ASEAN Insights – a report for business on the regional policy and regulatory environment makes clear, now is an exciting and pivotal time for businesses operating in and the governments of ASEAN member nations.
But if it is to achieve its full potential the members of ASEAN must further harness the opportunities of foreign investment from regional and multinational companies, and better manage the regulatory challenges that currently exist, as outlined in the report.
ASEAN has been attracting significant Foreign Direct Investment (FDI) since the 1980s. In 2017 Indonesia was the leading destination for FDI in ASEAN, followed by Vietnam, Malaysia and Thailand. In recent years Indonesia, Malaysia, Thailand and Vietnam have been tweaking incentives and regulations to encourage investment in advanced industries and technology transfer. The use of technology to connect the region is seen as paramount, and the recent signing of a new e-commerce agreement at the 17th ASEAN Economic Community (achieved after 9 rounds of negotiations which commenced in June 2017) is seen as further evidence of the region's commitment to digital solutions. As the report outlines, Clyde & Co sees ASEAN as being well placed to progress further.
The report covers:
- Towards true ASEAN integration - implementation of the AEC
- ASEAN FDI trends and barriers
- The implications of US tariffs and Chinese, EU, Japanese countervailing measures on ASEAN
- The rise of economic nationalism and protectionism in ASEAN
- The direction of transparency and corrupt practices in ASEAN
The aim of this report is to help you consider and do business in ASEAN markets, we hope you find it of interest.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.