Many businesses worldwide that focus on products depend heavily on manufacturing. You can get a sense of where other businesses outsource their production needs by looking at this list of Southeast Asia's top industrial nations. The list represents the world's manufacturing production in 2021, based on the latest recent data made available by the United Nations Statistics Division.
As the struggle between China and the United States intensifies, Southeast Asia is receiving increasing attention. Analysts stated that although the broad and diversified region of developing markets is posing as a significant geopolitical and economic battleground, it may also present prospects for Sino-U.S. cooperation.
A key pillar of China's regional diplomacy is Indonesia and the Association of Southeast Asian Nations (ASEAN), to which it belongs. The 10-member bloc has grown to become the third-largest economy in Asia and the fifth-largest in the globe.
It is located around the important canal that connects East Asia with the Middle East and Africa. With a population of 700 million people and policies that are open to the world, the region has enormous growth potential.
In the light of rising geopolitical tensions and Russia's ongoing war in Ukraine, the world is waiting to see how ASEAN plays its role as a potential bridge in high-level diplomatic discussions, especially between China and the U.S.
According to Luo Yongkun, deputy director and associate research professor at the Institute of Southeast Asian and Oceanian Studies of the China Institutes of Contemporary International Relations in Beijing, who was quoted in Nikkei Asia, Southeast Asian nations led by Indonesia are worried about any failure of multilateral mechanisms for international cooperation amid economic headwinds brought on by the pandemic and the war.
Southeast Asia's economic rise has been supported by a sizable market, a young population, and policies that are open to the world. Future expansion will face difficulties because to its extremely diverse culture and inconsistent degrees of development.
The average yearly economic growth rate for ASEAN nations was 4.4% between 2011 and 2020. Major economies began a strong recovery last year as virus controls relaxed, despite the COVID-19 pandemic disrupting economic activity and causing a 3.3% recession in 2020.
The World Economic Forum projects that within ten years, ASEAN would overtake China as the fourth-largest economy in the world. According to the Asian Development Bank, 70% of ASEAN's population will be middle class by 2030, presenting enormous commercial prospects and generating a $4 trillion market for consumer goods during the following ten years.
The region's economic engines are predicted to be the digital economy and the semiconductor sector.
As the industry moves toward lower-cost regions, Southeast Asia is a significant location for global semiconductor manufacturing. Due to the region's contribution of around 30% to semiconductor testing and packaging, the worldwide chip manufacturing industry has benefited greatly from its presence.
Global chip manufacturing behemoths are increasing their investment in Southeast Asian nations like Singapore, Malaysia, and Vietnam as the region's semiconductor and electronics industries expand.
Source: United Nations Statistics Division Report, Nikkei Asia