ASEAN Replacing China as World's Manufacturing Center

The global direct investment in the 10 member states of the ASEAN amounted to US$731 billion in 2016 to 2020, when that in China was US$698.9 billion. In that period, the investments in the ASEAN and China increased 30.4 percent and 10.4 percent compared to 2011 to 2015, respectively.

The Federation of Korean Industries commented on Aug. 18 that the ASEAN is replacing China as the center of the global supply chain. “The ratio of the direct investment in the 10 countries to the global total was 9.4 percent in 2017 and 11.8 percent in 2019, when China’s ratio was 8.3 percent and 9.2 percent, respectively,” it explained.

South Korea made a direct investment of US$31.7 billion in the ASEAN region in 2016 to 2020, up 74.2 percent from the preceding five-year period. China, Taiwan and Japan increased theirs by 65.4 percent, 40.6 percent and 21.8 percent, respectively.

“At present, the importance of the ASEAN in intermediate goods trade in Asia is almost equal to that of China,” the federation said, adding, “As of 2019, China accounted for 31.2 percent of the trade and the six ASEAN members of the Philippines, Indonesia, Vietnam, Thailand, Singapore and Malaysia accounted for 30.8 percent of the trade.”

South Korea’ direct investment in the ASEAN made up 16.2 percent of its total overseas direct investment in 2014 and the proportion reached 17.3 percent in 2019 and 20.3 percent in 2020. In that period, the ratio of South Korea’s direct investment in China to the total fell from 12.9 percent to 10.3 percent and then to 9.2 percent.