International trade development trend
The ongoing conflict between the United States and China has forced some companies to move their supply chains out of China. Last year, the GDP (gross domestic product) of ASEAN countries all surpassed that of China for the first time. The key to the huge changes in the past 30 years is the transfer of supply chains.
In 2022, the economic growth rates of various countries are roughly announced. India is 6.7%, Vietnam is 8.62%, Indonesia is 5.31%, Malaysia is 8.71%, the Philippines is 7.2%, and Singapore is 3.6%. Thailand has not yet officially announced, while China is 3.3%.
Judging from the above figures, this is the first time in the past 30 years that the economic growth rate of all ASEAN countries has surpassed that of China. Since then Chinese Premier Zhu Rongji carried out exchange rate reform in 1994, the RMB has depreciated sharply, and the financial turmoil broke out in Southeast Asia. Since then, “ASEAN countries have undergone 30 years of economic adjustment, and last year was a year of great changes.”
The biggest factor causing this change is the movement of supply chains, among which Friend Shoring advocated by US Treasury Secretary Yellen is the most representative. In the past 30 years, the only factor that determined the production base was offshore outsourcing. As long as the cost was low enough, the manufacturing industry could move its factories there. The manufacturing industry moving out of China has the highest priority to move to the ASEAN countries, making the ASEAN countries the new winners.
This shift in the supply chain may turn the new southbound countries with a population of 600 million in the 10 ASEAN countries and India with a population of 1.4 billion, with a total population of 2 billion, into new production bases.
India’s total economic volume last year reached 3.38 trillion US dollars, surpassing the United Kingdom to become the fifth largest economy in the world. In the next few years, it may surpass Germany and Japan to become the third largest economy in the world. In addition, Indonesia’s economic growth rate last year hit a record high It has reached a new high in 10 years, and it seems that it is about to make a big leap. The role of dual printing is becoming more and more important, and Vietnam, Malaysia, and the Philippines are also rising.
Article from China Times News Network reported on March 20, 2023
