Shifting Asian supply chains amid ongoing US-China frictions
Manufacturing hubs in South East Asia are set to benefit from firms hedging against ongoing US-China frictions, in our view, and ASEAN countries will continue to be attractive destinations for investment.
What you will learn:
- We expect Vietnam in particular to be a big beneficiary given its proximity to China, participation in free trade agreements, and low-cost advantage.
- Although we expect ASEAN to become an increasing source of global manufacturing and goods exports, breaking the global and regional dependency on China would require a significant drop in the reliance on backward integration with Chinese industry. There is little evidence of this yet.
- We think it’s more likely that firms will opt for a ‘China plus-one’ strategy, reducing their dependency on China only marginally. We expect this strategy, along with growing domestic markets in ASEAN and China, will strengthen intra-regional economic linkages.

Tags:
Related Resouces

Post
Using economics to improve business dialogue with governments in Asia
In Oxford Economics’ Singapore office, overlooking the historic Singapore river, we count as our neighbours the Asian headquarters of most the world’s major multinational companies.
Find Out More
Post
Helping Us Help Them: Lessons from Five Years Consulting with Asia-based Clients
This “winter” marks my fifth year in Asia, after moving from London to Singapore to help build Oxford Economics’ consulting business in the Asian market.
Find Out More
Post
Asia Key Themes 2025: Global shocks and domestic resilience
Most likely, 2025 could well be a year of slower growth and more stubborn inflation for Asia than most believe.
Find Out More