ASEAN is positioning itself to capture shifting global investment and supply chains amid intensifying international trade turmoil, according to policy experts speaking at the Southeast Asia Trade and Development Forum 2026 in Bangkok. The bloc’s long-term direction, guided by the ASEAN Community Vision 2045 adopted by leaders in May 2025, focuses on strengthening economic resilience to build a resilient, innovative, dynamic, and people-centered ASEAN.
Investment Growth and Global Value Chain Realignment
ASEAN has so far avoided severe economic disruption feared by some, benefiting from companies diversifying production bases and steady foreign direct investment (FDI), according to Richard Bolwijn, director of investment research at UN Trade and Development (UNCTAD). UNCTAD’s 2025 ASEAN Investment Report showed the region attracted $226 billion in FDI, while manufacturing investment surged nearly 150% to $44 billion.
Megaprojects worth more than $1 billion now account for almost half of ASEAN’s FDI, Bolwijn noted. However, manufacturing in lower-value goods remains important in some ASEAN countries due to disparities within the region and varying levels of Global Value Chain (GVC) participation among ASEAN nations. For countries such as Thailand, the challenge is to move beyond lower-value manufacturing by adopting and attracting more sophisticated services and technology, according to Bolwijn.
Navigating US-China Competition and Middle Power Strategies
Middle powers in Asia are caught between intense economic, political, and security competition between the US and China, said Jay Rosengarten, an adjunct lecturer in public policy at Harvard Kennedy School. This rivalry creates instability, economic disruptions, and strategic vulnerabilities, but it also offers middle powers an opportunity to strengthen regional cooperation and develop strategies to reduce risks.
Complete decoupling from either major power is neither possible nor advisable, Rosengarten argued, instead advocating for greater self-reliance combined with strategic coalitions and regional cooperation. Rosengarten also emphasized that Thailand’s investment in human capital—especially its education sector—is crucial when the region is experiencing economic shifts and when there is a shrinking population domestically.
Structural Challenges and the Path to 2030
ASEAN entered a new chapter as the region becomes increasingly important in the global economy, according to Denis Hew, director of the Centre for Asia and Globalisation at the Lee Kuan Yew School of Public Policy. Combined gross domestic product for ASEAN reached about $3.9 trillion in 2024, making it the world’s fifth-largest economy and the third-largest in Asia, according to figures presented at the forum. ASEAN has set an ambition of becoming the world’s fourth-largest economy by 2030.
However, Hew warned that the region faces structural challenges, including digital transformation and artificial intelligence, persistent development gaps, aging populations, low productivity, and an increasingly fragmented global economy. Trade protectionism and the reconfiguration of global value chains could also raise operating costs as companies pursue near-shoring and reshoring strategies.
Did You Know? A July survey by the Japan External Trade Organization (JETRO) found that more than half of Japanese companies in ASEAN were planning to expand or expanding investment, with local staff having been promoted to management or department head positions.
Frequently Asked Questions
What is the ASEAN Community Vision 2045?
Adopted by leaders in May 2025, the ASEAN Community Vision 2045 guides the bloc’s long-term direction to build a resilient, innovative, dynamic, and people-centered ASEAN.
How much was ASEAN’s combined GDP in recent reports?
ASEAN’s combined gross domestic product reached about $3.9 trillion in 2024, making it the world’s fifth-largest economy and the third-largest in Asia.
What are the primary FDI figures for ASEAN?
According to UNCTAD’s 2025 ASEAN Investment Report, the region attracted $226 billion in FDI, while manufacturing investment surged nearly 150% to $44 billion.
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