ASEAN 6 – North Asia: Connectivity dividend
Besides a growing intra-ASEAN pie, the group’s trade and investment links with North Asia is strengthening.
Group Research - Econs31 Aug 2026
  • ASEAN will continue to benefit from trade and investment openness
  • … despite rising geoeconomic fragmentation.
  • Besides growing intra-ASEAN pie, trade & investment links with North Asia are set to deepen further.
  • North Asia is ASEAN-6’s major trading partner, led by China and Hong Kong SAR, followed by Taiwan.
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We believe that Southeast Asia will continue to position itself as a region open to international trade and investments, despite rising geoeconomic fragmentation and protectionism. Its open policies have attracted foreign investments and facilitated trade, serving the region well with fast economic growth following the massive shock from the Asian Financial Crisis and subsequently the pandemic.

ASEAN-6’s high trade openness is reflected in its average goods and services trade-to-GDP ratio of nearly 130% across the six key economies, above key global economies and twice the world’s figure. The bloc achieved brisk goods trade growth of 6.8% CAGR between 2000 and 2025, above global trade expansion of 5.7%, and improved its global exports share.

The bloc remains committed to upholding an open and rules-based multilateral trading system, and deepening integration by actively upgrading existing FTAs while exploring new ones with like-minded partners.

Against the tide of US-led trade protectionism, the world could begin to transition to ‘Trade Outside the US (TOTUS)’, with ASEAN’s regional integration providing opportunities while potentially buffering against global shocks. Southeast Asia is therefore collectively enhancing its economic relations with other key Asian partners, while taking gradual improvements in its long-term path towards a cohesive and economically integrated ASEAN Economic Community (AEC).

Besides a growing intra-ASEAN pie, the group’s trade and investment links with North Asia (China, Hong Kong SAR, Taiwan, Japan, and South Korea) have strengthened in the past decade. North Asia is around 40% in ASEAN-6’s total goods trade, led by China and Hong Kong SAR, followed by Taiwan. Foreign direct investment (FDI) connectivity has also grown sharply, with Taiwan’s share in ASEAN-6’s FDI rising notably from under 2% in 2015-19 to nearly 4% post-pandemic. Singapore has been the main beneficiary of these flows, besides Vietnam, Thailand, and Malaysia.

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Chua Han Teng, CFA

Economist - Asean
[email protected]

Radhika Rao

Senior Economist – Eurozone, India, Indonesia
[email protected]
 


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