Southeast Asia emerges as one of the fastest-growing economic regions in the world.
With a large young population driving digital transformation, abundant natural resources, and skilled labor, ASEAN (Association of Southeast Asian Nations) has positioned itself as a key engine driving the global supply chain and industrial development, reports Xinhua.
Despite the global economic slowdown and geopolitical uncertainties, Southeast Asia's economy shows remarkable resilience, maintaining strong growth. Among the key factors in this trajectory is ASEAN's strategic partnership with China, its largest trade partner and major investor. With bilateral trade reaching new heights and China's proposed Belt and Road Initiative strengthening regional connectivity, Southeast Asia is poised to enhance its role in the global economy while facing future challenges.
ASEAN ECONOMIC DEVELOPMENT: A BRIGHT OUTLOOK
ASEAN emerges as a pillar of stability and economic growth amidst a turbulent global landscape. Indonesia's Coordinating Minister for Economic Affairs, Airlangga Hartarto, praised ASEAN's resilience by highlighting its role as the “most stable regional collaboration” in the Indo-Pacific.
According to the Asian Development Bank (ADB), Southeast Asia's economic growth rate in 2024 is expected to reach 4.6 percent, driven by strong domestic demand, consumption, and the recovery of the tourism sector. Cambodia, Indonesia, the Philippines, and Vietnam are projected to lead in economic growth.
Indonesia is expected to grow by 5 percent this year and in 2025, supported by effective inflation control measures, according to ADB's Country Director for Indonesia, Jiro Tominaga.
Indonesian marketing expert Hermawan Kartajaya also emphasized ASEAN's investment potential. "ASEAN is a very promising market for the global community. Therefore, countries need to open investment opportunities, particularly in human resource and technology development," he said.
CHALLENGES FOR ASEAN: FACING UNCERTAINTY
Despite impressive achievements, ASEAN faces serious challenges from geopolitical conflicts, political leadership changes, and rising protectionist policies worldwide. Rahadian Zulfadin, a policy analyst at the Fiscal Policy Agency under Indonesia's Ministry of Finance, warned that 2024 sees three main challenges. "First, geopolitical conflicts. Second, political leadership changes in many countries. Third, the global economy and major economies remain weak," he said.
Ongoing conflicts in Ukraine and Gaza, coupled with government changes in Syria, increase global instability. "We are in a globally uncertain situation," said Zulfadin, pointing out that these issues could disrupt global supply chains and trade flows.
Hoe Ee Khor, chief economist at the ASEAN+3 Macroeconomic Research Office, mentioned US protectionist measures as a significant risk. "The sharp but brief market adjustment we witnessed in early August is a reminder of risks of further volatility in financial markets. Potential increases in protectionist policies following the US presidential election are another major risk for the region," he said.
Arianto Patunru, chairman of the Indonesia Policy Studies Center board, stated that protectionist trends are strengthening amid global dynamics, indicating signs of deglobalization. He warned that protectionist measures could destabilize global supply chains, posing a risk to ASEAN's export-reliant economies.
CHINA: AN IMPORTANT DEVELOPMENT PARTNER FOR ASEAN
China continues to be ASEAN's largest trading partner, reflecting deepening economic ties. ASEAN Secretary-General Kao Kim Hourn emphasized the importance of strengthening supply chain connections between ASEAN and China to maintain economic resilience.
Kao also highlighted the role of infrastructure in facilitating trade and mobility, praising the Jakarta-Bandung high-speed railway and the Laos-China railway as examples of successful joint sustainable infrastructure projects. "I see great opportunities for China to collaborate with ASEAN and its member countries in meeting infrastructure needs. Through the Belt and Road Initiative, China can support ASEAN Infrastructure Projects and leverage its expertise and resources in infrastructure development," he added.
Cambodia's export performance highlights the positive impact of ASEAN-China collaboration. In the first 11 months of 2024, Cambodia's exports reached US$23.93 billion, increasing by 16.8 percent compared to the previous year. Key exports included garments, footwear, bicycles, car tires, and agricultural products, with China being one of Cambodia's major export destinations.