From Phar Kim Beng and CW Sim
Western analysts often paint a pessimistic picture of Aseans economic trajectory. Henny Senders recent article, Aseans Tiger Economies Have Lost Their Roar, is a prime example, arguing that Chinas manufacturing dominance, global supply chain realignment, and high US interest rates have eroded Aseans competitiveness.
However, this perspective grossly underestimates Asesns economic resilience and, more importantly, ignores Malaysias pivotal role in reshaping global supply chains. If Asean is adjusting its course in the global economy, Malaysia is in the captains seat, positioning the region for a new era of economic influence.
Asean isnt losing its roar, merely recalibrating
Asean is not a passive observer in global economic shifts. Global giants, including Apple, Samsung, BYD, CATL, and Foxconn, are expanding their Asean footprint because Asean has become the biggest winner of the China+1 strategy.
Thailand leads in automotive manufacturing, while Vietnam is a key electronics assembly hub; Indonesia dominates nickel and battery supply chains. Malaysia on the other hand is the regional high-tech manufacturing and semiconductor leader. In 2023 alone, Asean attracted over US$150 billion in foreign direct investment (FDI), outpacing India, Latin America, and Africa.
Sender claims Asean is struggling under Chinas competition. The reality is the opposite China is becoming increasingly reliant on Asean markets.
In 2024, Chinese investment in Asean surged over 30%, particularly in electric vehicles (EV) production, battery technology, and digital finance. Companies like BYD and NIO are setting up production hubs in Asean, confirming the regions status as a new global manufacturing destination.
Chinas trade dependence on Asean has reached an all-time high of 24% (2024), surpassing its reliance on the US, Japan, and the EU.
Aseans economic challenges have solutions already in motion
Thailands auto sector may be experiencing short-term headwinds, but Malaysia is already positioning itself as Aseans EV supply chain leader. The Johor-Singapore special economic zone (JS-SEZ) and Malaysia-Singapore joint technology park are attracting high-end manufacturing investments.
Indonesias growth may have slowed, but its nickel reserves are critical to the global EV battery market, making it indispensable in the clean energy transition.
Aseans financial integration, however, is accelerating. The upcoming Asean Digital Payments Interconnectivity Initiative (2025) will revolutionise cross-border transactions, strengthening regional trade dynamics.
Malaysias role in Aseans economic renaissance
As the Asean chair, Malaysia must not only lead Aseans collective economic revival but also secure its position as the driving force behind it. Here are three strategic imperatives for Prime Minister Anwar Ibrahims administration:
1. JS-SEZ: Aseans Shenzhen-Hong Kong model
- Malaysia and Singapore must deepen industrial integration, with JS-SEZ serving as the primary hub for global investment. The two nations must attract at least US$20 billion in new manufacturing investments by 2026 to create Aseans largest cross-border industrial supply chain.
2. Asean-GCC energy investment fund
- At the Asean Summit, Malaysia should champion the creation of an Asean-GCC energy investment fund to channel Saudi and UAE capital into Aseans renewable energy, infrastructure, and industrial sectors. A target of at least US$50 billion in Middle Eastern investments into Asean markets by 2026 should be set.
3. Asean semiconductor supply chain alliance
- Malaysia must lead Aseans semiconductor supply chain development, working alongside Thailand, Vietnam, and Indonesia to reduce dependence on the US and China. The country should establish an Asean semiconductor cooperation agreement at the 2025 Asean Summit and develop a regional chip manufacturing hub by 2027.
Aseans future is Malaysias opportunity
Senders article reflects a classic Western pessimism bias, focusing on Aseans challenges while ignoring the regions ability to capitalise on supply chain shifts and industrial transformation.
The reality is that Aseans economy is not losing its roar. It is evolving into a more precise, high-value, and sustainable growth model. As Aseans 2025 chair, Malaysia is uniquely positioned to lead this transformation.
Malaysia must be Aseans economic leader, not a follower. This is not just about national interests; it is about how Anwars administration can demonstrate economic leadership ahead of the 2027 general election.
In 2025, the world will be watching Asean. And Aseans direction will be determined by Malaysias leadership.
Phar Kim Beng and CW Sim are FMT readers.
The views expressed are those of the writers and do not necessarily reflect those of FMT.