Trade diversifying to Asean, even as China dominance grows
China may actually increase its share of global trade even as supply chain diversification creates positive spillover for Asean nations. Triangulating top-down and bottom-up data with results from our survey of manufacturing firms throughout the region, we find that Vietnam is the clear winner, although Malaysia, India and Indonesia are also beneficiaries. Survey responses confirm our fundamental analysts’ positive views on regional localisation plays and automation names, while from a market perspective, FDI flows should stimulate an Indonesian rerating.
Asean gets the best of both worlds
Asean markets are not just benefiting from spillover from global businesses diversifying their networks, they are also feeding the Chinese dragon with an increased share of China’s imports. And although US firms are increasingly looking inwards, Asean nations are still exporting more than ever to the USA. Top-down, Vietnam, Malaysia and Indonesia have raised their share of global exports and FDI.