The outlook for the Asean market appears bright despite the pandemic as Western countries and its Asian neighbors are turning to the economic bloc for their production.
Benjamin Hung, Standard Chartered Bank (SCB) Asia chief executive officer, said at a briefing on Friday that Asean is an attractive destination for foreign investors seeking to establish additional supply chains.
“US is also very keen to develop Asean as an alternative into diversification of supply chain, likewise European markets also seeing Asean for that matter,” he said.
“We are also seeing within Asia a significant interest from Japan, from Korea, from China, all very interested in investing in Asean. And within Asean, of course, you have intra-Asean trade as well which is also providing very promising prospects,” Hung added.
He noted that the regional bloc has been the manufacturing hub for the consumption of the West, particularly European and US markets. As a result, Hung said, he sees “a significant rise” in the intra-Asean trade as well.
“Going forward, I think increasingly we will see Asia manufacturing all the consumption by the East and in particular, by the rising, growing population and consumption pattern,” he explained.
The digitalization is also aiding the consumption of the Asean community as it eases the transactions, he said.
Kingshuk Ghoshal, SCB’s head of global subsidiaries in Singapore and Asean, said that the growing middle class in the region—about 700 million residents—are also driving the consumption in the e-commerce and digital economy.
He said this is supported by the establishment of digital infrastructure that serves as the “connecting glue” for the online transactions.
Amid the positive prospects, however, Hung warned about the present concerns over the supply chains as these are currently clogged due to mobility restrictions, port closures and labor shortage, among others.
The global community has been reeling from the impact of container imbalance in pandemic, resulting into shipment delays for both exporters and importers. The delays have resulted in revenue losses, increased freight costs and even slowdown in production.