From Phar Kim Beng and CW Sim
Western analysts often paint a pessimistic picture of Asean’s economic trajectory. Henny Sender’s recent article, “Asean’s Tiger Economies Have Lost Their Roar”, is a prime example, arguing that China’s manufacturing dominance, global supply chain realignment, and high US interest rates have eroded Asean’s competitiveness.
However, this perspective grossly underestimates Asesn’s economic resilience and, more importantly, ignores Malaysia’s pivotal role in reshaping global supply chains. If Asean is adjusting its course in the global economy, Malaysia is in the captain’s seat, positioning the region for a new era of economic influence.
Asean isn’t 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 China’s 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 region’s status as a new global manufacturing destination.
China’s trade dependence on Asean has reached an all-time high of 24% (2024), surpassing its reliance on the US, Japan, and the EU.
Asean’s economic challenges have solutions already in motion
Thailand’s auto sector may be experiencing short-term headwinds, but Malaysia is already positioning itself as Asean’s EV supply chain leader. The Johor-Singapore special economic zone (JS-SEZ) and Malaysia-Singapore joint technology park are attracting high-end manufacturing investments.
Indonesia’s growth may have slowed, but its nickel reserves are critical to the global EV battery market, making it indispensable in the clean energy transition.
Asean’s financial integration, however, is accelerating. The upcoming Asean Digital Payments Interconnectivity Initiative (2025) will revolutionise cross-border transactions, strengthening regional trade dynamics.
Malaysia’s role in Asean’s economic renaissance
As the Asean chair, Malaysia must not only lead Asean’s collective economic revival but also secure its position as the driving force behind it. Here are three strategic imperatives for Prime Minister Anwar Ibrahim’s administration:
1. JS-SEZ: Asean’s “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 Asean’s 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 Asean’s 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 Asean’s 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.
Asean’s future is Malaysia’s opportunity
Sender’s article reflects a classic Western “pessimism bias”, focusing on Asean’s challenges while ignoring the region’s ability to capitalise on supply chain shifts and industrial transformation.
The reality is that Asean’s economy is not “losing its roar”. It is evolving into a more precise, high-value, and sustainable growth model. As Asean’s 2025 chair, Malaysia is uniquely positioned to lead this transformation.
Malaysia must be Asean’s economic leader, not a follower. This is not just about national interests; it is about how Anwar’s administration can demonstrate economic leadership ahead of the 2027 general election.
In 2025, the world will be watching Asean. And Asean’s direction will be determined by Malaysia’s 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.