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What’s driving ASEAN’s resiliency

ANZ Insights

2024-04-10 00:00

Economic activity in south-east Asia remains resilient, according to ANZ’s Khoon Goh, as capital continues to shift from a slowing China into the broader region – even, in some cases, from China itself.

While China’s $US19 trillion economy is expected to play a critical role in the global economy for many years to come, it is forecast to grow just 4.2 per cent in 2024 - still high by international standards.

Speaking at the 2024 ANZ Debt Conference in March, Goh – ANZ’s Head of Asia Research – said while many may have expected China’s challenges to weigh on the ASEAN (Association of Southeast Asian Nations) region, activity had instead held up well.

“In fact, south-east Asian growth accelerated in the second half of [2023],” he said. “I think this highlights the resiliency of the region.”

Part of this resilience is due to the ongoing shift in investment out of China – an evolution of the so-called “China plus one” strategy - which Goh expects to continue.

“There has been a massive amount of investment that's been diverted away from China to places like Vietnam, for example, [and] increasingly now India,” he said.

“And we're going to see an acceleration of that.”

But a new factor, according to Goh, is regional diversification of investment from Chinese corporates.

“I think the impression most people get is it's typically your multinationals, Western companies that are making the shift,” he said. “But increasingly Chinese companies themselves are actually accelerating their outward FDI. Now, this is a new trend, and we can only see that continuing.”

Goh made the comment on a panel chaired by Mahjabeen Zaman, Head of FX Research at ANZ. You can watch an edited version of the discussion below.


This strength across the ASEAN region offers a significant opportunity for Australian businesses, Goh said.

ASEAN is a $US4 trillion combined economy, he said, and is expected to grow to $US6 trillion by the end of the decade.

In 2022, trade between Australia and ASEAN economies reached $A307 billion. In March, the Australian government unveiled $A2 billion in funding aimed at boosting investment in the region.

“[There are] huge opportunities [for Australia}, in terms of a fast-growing region at the doorstep,” Goh told the conference. “And huge opportunities in terms of growing trade and investment flows.”

You can watch the video above to find out more.

What’s driving ASEAN’s resiliency
Staff Writer
ANZ Insights
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