
ASEAN’s Strength in Numbers
Market watchers remain fixated on the slow descent to a more sustainable growth rate in China. The country’s economic ascension through the 1990s and 2000s and the strong stimulus package that bolstered growth to stratospheric levels after the 2008-09 global crisis were once-in-a-lifetime gifts to the global economy and those corporations leveraged off the global economic and trade cycle. Two reasons suggest concerns with a slowing China are overstated.
First, China is now a $10 trillion economy. Even if China were to grow at just 5%, it would still be adding $500 billion to the global economy – roughly the size of Norway or Argentina’s GDP – each year. Do not lose sight of the fact that though China is slowing, it is now a truly leviathan economy.
Second, we believe that just as China is slowing, the ASEAN economies are building the base for a more interconnected and productive economic union that will attract foreign direct investment (FDI) and see the ASEAN emerge as the new ‘Factory Asia’ in the next decade.
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