ASEAN, China, and India are re-evaluating global supply chains.

The new era of globalization is not a regression, but rather a re-entry into a new path. By 2569, ASEAN, China, and India are building a more resilient, transparent, and geopolitical-sustainable multi-center supply chain system.

The year 2569 is becoming a critical turning point for global supply chains. After years of challenges ranging from the shockwaves of pandemics and wars to US tariffs and export restrictions, businesses are shifting from temporary “resilience” measures to a “reinvention” in how and where they produce and source their goods.

"Asia" คือ At the heart of this strategic transformation... With ASEAN expanding its manufacturing role and diversifying its industrial base, China shifting from being the "world's factory" to a "bottleneck and high-tech powerhouse," and India accelerating the development of its local manufacturing base and reducing its reliance on imports, these trends are fundamentally rerouting global trade. Analysts predict a potential shift in global trade value of up to US$14 trillion by 2578 if these trends continue.

From "flexibility" to "preparedness".

Protectionism is intensifying and this is not just a temporary cycle. After volatile tariffs impacted global imports worth over $2.6 trillion by 2568, companies are accelerating the design of more diversified supply chains and building “transportation flexibility” whether by sea, air, or rail.

The global economy is projected to grow by only 2.6% in 2569. Major economies such as the US, China, and Europe have lost momentum, leading to forecasts of slower growth compared to last year. Developing economies excluding China are expected to slow to 4.2%, while many emerging economies may face risks from weak demand and tight financial conditions. Therefore, intra-regional trade and digital integration become key drivers in mitigating these impacts.

World Economic Forum (WEF) Multinational corporations are restructuring from traditional global supply chains to regional ones. Research from several companies indicates that "local-for-local" models and multi-country production networks are replacing traditional centralized supply chains. Meanwhile, data from a quality control provider (QIMA) shows that 2568 will see record-breaking diversification of production sources, with both buyers and suppliers accelerating network expansion and risk mitigation. This trend is expected to continue in 2569.

ASEAN: A New Engine for Diversification

ASEAN has been the leading recipient of foreign direct investment (FDI) among developing countries for several consecutive years. Manufacturing FDI increased by nearly 150% to US$44 billion, reflecting a shift from a low-cost assembly base to advanced industries such as semiconductors and automobiles.

While the China+1 strategy is causing global companies to relocate some of their production bases to Vietnam, Thailand, Malaysia, Indonesia, and the Philippines to diversify risk, regional cooperation, such as the Johor-Singapore Special Economic Zone, is simultaneously strengthening regional supply chains.

However, double taxation, regulatory discrepancies, port congestion, and maritime security risks remain obstacles. A 2569 Southeast Asia report clearly indicates that operators should prepare “reserve production capacity” and utilize risk management technologies more extensively.

China: From the world's factory to the controller of supply chain bottlenecks.

China is entering 2569 with a merchandise trade surplus exceeding US$1.076 trillion, and this surplus is a key driver for “new high-quality production capacity” such as electric vehicles, advanced batteries, AI, and clean energy technologies.

China's Ministry of Commerce has declared 2569 the year of strengthening export control laws, focusing on reviewing transactions involving sensitive technologies and dual-use goods such as drones and rare earth minerals. Despite these stricter controls, China emphasizes that the Asia-Pacific region should "expand common supply chains" rather than isolate itself, demonstrating its continued desire for a central role in regional production systems.

India A central hub for alternative options, attracting global businesses.

India's 2569 budget direction focuses on reducing reliance on imports of strategically important goods, particularly from China, by strengthening domestic production and building strategic buffers in energy, electronics, and defense. This aims to “target risk reduction” in areas where domestic production is feasible and supply chain stability is crucial.

The Indian government's PLI strategic initiative and the Make in India 2.0 domestic manufacturing promotion program aim to attract key manufacturers in the electronics, semiconductor, automotive, and pharmaceutical industries. This is supported by a flexible foreign trade policy that emphasizes digitalization and business facilitation. The private sector is responding with increased investment, driven by improvements in logistics and government investment, although progress varies across states and industries.

Despite increased domestic production, India's trade balance with China has widened, reflecting its continued dependence on raw materials and intermediate inputs from China, from machinery to key minerals, particularly in the electronics industry. Closing these gaps requires financial support throughout the supply chain, upgrading the quality of MSMEs, and accelerating the reduction of logistics costs to enable them to compete at the same level as their ASEAN rivals.

By 2569, businesses might consider strategizing by building a multi-regional supply chain portfolio instead of relying on a single country, investing in real-time risk analytics and digital twin models, designing complex modular manufacturing processes, building reserve capacity and stockpiling key raw materials in advance, and integrating sustainability with cost and resilience.

In summary, the new era of globalization is not a regression, but rather a re-entry into a new path. This will be in 2569. ASEAN, China, and India are building more resilient, transparent, and geopolitical-sustainable multi-center supply chain systems. If the public and private sectors collaborate to restructure infrastructure, standards, and technological capabilities, Asia could generate immense value from this major restructuring and undoubtedly shape the future of global supply chains in the coming decade.

Follow and read other columns in the February 2569 Bank Finance Journal, Issue 526, in digital format: https://goo.gl/U6OnIi

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