Despite movement towards ASEAN integration, the new export landscape in Asia reveals that ASEAN is at a cross roads according to a DHL Express commissioned study by the Economist Intelligence Unit (EIU), on regional trade flows.
The report entitled Trading Up: A New Export Landscape for ASEAN and Asia, said ASEAN must decide whether it wants to pursue deeper integration with fellow ASEAN member countries, or develop individual bilateral trading relationships with China.
The share of exports to China from all ASEAN countries in the study, except Vietnam has risen sharply, while intra-ASEAN trade has shown a declining growth trend, according to the report.
The study concentrated on the ASEAN bloc’s six largest economies – Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam – and analysed the trade of its closest regional competitors, China, Japan and India. This report shows that trading volumes have changed over the past seven years, the composition of trade has shifted and, most importantly, trade flows have realigned to respond to changing economic and business conditions. DHL believes that for ASEAN to sustain growth, governments and businesses alike have to understand how trade patterns and flows are evolving, particularly as new centres of manufacturing such as China and India rise in the global trading system.
"This report provides ASEAN governments with an understanding of the evolving trade patterns within and outside of ASEAN, as well as equipping businesses with the insights to re-assess their strategies in the new export landscape," said Dan McHugh, CEO, DHL Express – Asia Pacific. While the study highlighted that intra-ASEAN trade has declined compared with the stellar rise of China, DHL believes that the region will stand firm and continue to grow. It strongly advocates that governments and businesses play a part to move the trade bloc up the export value chain by investing in infrastructure and focusing more on the high-value imports and exports category such as consumer electronics, information technology and medical devices.
"We urge the Governments of ASEAN to redouble their efforts to reduce trade barriers in their own countries. Intra- ASEAN trade still has great potential to provide economic opportunity and raise living standards," McHugh added.
