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Cambodia-Vietnam to firm up border payment system

Cambodia and Vietnam agreed to promote further development in their banking sectors, especially to boost cooperation on the border payment system integration project.

The decision was taken during a meeting last Friday in Hanoi, Vietnam, between Chea Serey, Governor of the National Bank of Cambodia (NBC) and Nguyen Thi Hong, Governor of the State Bank of Vietnam (SBV).

Serey and Hong exchanged views on the economic, political and monetary situation as well as the development of the banking sector of the two countries. Also, they discussed the progress of cooperation on the cross-border payment system integration project, said an NBC press release.

“The 2024 bilateral meeting is aimed at strengthening and expanding bilateral cooperation to promote the further development of the banking sector between the two countries,” the release further said.

“We successfully completed our annual bilateral meeting between NBC and SBV. This annual meeting aimed to strengthen friendship and collaboration between the two central banks by sharing experiences and learning from each other,” Serey said.

Cambodia and Vietnam on December 3, 2023, officially launched a project to connect cross-border QR payment systems to promote tourism, trade and investment between the two countries.

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Source: Khmer Times

Commentary: China’s overcapacity may become a Southeast Asia problem if Trump’s tariffs materialise.

Commentary: China’s overcapacity may become a Southeast Asia problem if Trump’s tariffs materialise.

If Donald Trump follows through on tariff threats in the US-China trade war, all those cheap Chinese exports have to go somewhere else, says Shay Wester of the Asia Society Policy Institute.

 

WASHINGTON DC: Southeast Asia is already bracing for a wave of tariffs. Donald Trump's return to the White House brings a significant shift in US trade policy, with his proposed sweeping tariffs threatening to trigger retaliation and raising the prospect of a global trade war.

For a region whose exports to the US surged to US$143 billion in the first half of 2024 – overtaking shipments to China – Southeast Asia will likely come under increased scrutiny.

 

At the heart of Trump's agenda is rebalancing trade through robust tariff increases, which he views as both a powerful negotiating tool and a means to rejuvenate American manufacturing. On Tuesday (Nov 19), Trump announced China hawk Howard Lutnick as his pick for commerce secretary, tasking him with leading the administration's trade and tariff strategy.

On the campaign trail, Trump said he would impose tariffs of up to 20 per cent on all imports and a staggering 60 per cent or more on Chinese goods – which would effectively shut many Chinese exports out of the US market.

Southeast Asian economies such as Vietnam, Thailand and Malaysia export more to the US than they import, creating significant trade surpluses. Tariffs would raise the cost of their exports making them less attractive to American buyers. To maintain access to the critical US market, they may need to increase imports of American goods and curtail exports.

 

ASEAN economies could face short-term disruptions, with economists projecting that Trump's tariffs could cut regional growth by up to 0.5 percentage points in 2025.

CHINA'S OVERCAPACITY - ASEAN'S NEW PROBLEM?

But Chinese exports that are shut out of the US market need to go somewhere else. While this might be good news for consumers in the short term, Southeast Asian manufacturers are already struggling with Chinese industrial overcapacity.

Thailand, for example, has seen over 2,000 factory closures this year due to a flood of cheap Chinese steel and other goods. Indonesia's textile sector has lost tens of thousands of jobs in just six months, and local manufacturers across the region are struggling to stay competitive.

If tariffs cut off access to American buyers, this challenge could deepen as subsidised Chinese imports flood Southeast Asia and other emerging markets.

ASEAN governments are already taking steps to curb the influx. Vietnam and Indonesia have imposed a range of anti-dumping tariffs on Chinese goods, and Thailand recently announced measures to monitor cheap imports.
 

Exporters told to enhance sustainability via design

Exporters and manufacturers are called to enhance environmental sustainability of their products and services through design with the use of digital tools and avail programs and services. 

Dr. Mina Gabor, Philippine Exporters Confederation, Inc. (PHILEXPORT) trustee for the tourism sector, underscored the need to ensure minimal negative impact on the environment as they expand exports of design-driven products and services.

“Because of evolving market requirements, the process continues to get complicated and tough, including using renewable materials, minimizing wastes and reducing our carbon footprint and energy consumption,” she said during the recent PHILEXPORT General Membership Meeting.

Gabor said sustainability and innovation can be incorporated particularly into product design.

“So many tools are available now to make this happen –digitalization, artificial intelligence, laboratories, government and private sector programs and services– to create sustainable products and services that benefit our people, our planet and profitability,” she said.

“Design sustainability is not merely a password. It is a call to action, it requires us to rethink our entire approach to design –from conception to production and from usage to disposal. Each of us has critical roles to play in this pursuit,” she added. 
As they design and develop products and services, Gabor cited two important developments happening worldwide today, including the aging population in many countries and women as economic opportunities.

“The concern for more aging population because of new medical discoveries, they live longer and they have the money to travel and to buy goods,” she said.

"There are 10.2 million women worldwide, 20 percent of them are working wives but they earn more than their husbands. Sixty five percent of car buying decisions are made by women... Products that are decisively influenced by women –home furnishings, 94 percent; holidays, 92 percent; homes, 91 percent. What are we designing and developing for them today?,” she added. 

Source: PHILEXPORT News and Features

Asean fintech shows resilience amid global downturn: report

DESPITE a global downturn, South-east Asia’s fintech sector has shown remarkable resilience, with funding in the region’s six largest economies dipping by less than 1 per cent in 2024 – a stark contrast to the 28 per cent decline in global fintech funding over the same period.

This marks a significant improvement from the 71 per cent drop recorded in the previous year in the six largest Asean economies – Singapore, Thailand, Indonesia, the Philippines, Vietnam, and Malaysia – with funding this year largely concentrated in early-stage startups and payments.

In comparison, global fintech funding declined 28 per cent in the first three quarters of 2024, trending down for the third consecutive year, according to the Fintech in Asean 2024 report: A decade of innovation. It was jointly launched by UOB, PwC Singapore and the Singapore FinTech Association (SFA).

Based on data from Tracxn’s platform, the report said that early-stage companies received more than 60 per cent of the total fintech funding of US$1.41 billion in the region, which went to half of the top 10 funded companies in the first nine months of 2024.

Primarily boosted by two mega deals from GuildFi (US$140 million) and Longbridge (US$100 million), this suggests investors may be willing to bet on innovation at the foundational level for potential future returns.

“Such a momentum may bode well for the long-term adaptability of Asean’s fintech landscape, as fresh ideas continually get backed,” added the report.

Over the last decade, fintech funding in the region has grown significantly, surging by more than 10 times since 2015, and recording a peak of nearly US$6.4 billion in 2021.

Janet Young, UOB’s managing director and group head of channels and digitalisation, as well as strategic communications and brand, said that fintechs have evolved from a disruptive force to become an essential component of financial ecosystems.

She noted that the region’s fintech sector “continues to show promise”, supported by an improving macroenvironment and the emergence of advanced technologies.

Singapore – leader of the pack

Zooming in on Singapore, Shadab Taiyabi, president of SFA, said: “The fintech ecosystem in Singapore continues to attract robust funding, driven by strong regulatory support and opportunities for cross-border collaboration.”

A total of 62 deals were inked in Singapore, comprising about 62 per cent of the total deal volume of 99 recorded for the six Asean economies for the first nine months of 2024.

In terms of deal value, Singapore bagged 53 per cent, or US$745 million, snaring the lion’s share in Asean for the 10th consecutive year. 

Since 2015, the city-state has housed the most fintech unicorns in the region, with six of such firms valued at over US$1 billion, including Advance Intelligence Group – the parent company of buy-now-pay-later platform Atome; and cross-border payments firm Nium.

Meanwhile, Thailand rose to second place, ahead of last year’s runner-up Indonesia, with 24 per cent, or US$341 million of funding in the region for 9M 2024.

Indonesia fell to third place with 18 per cent of funding in the region for 9M 2024, as fewer large-scale investments resulted in a reduction in its share of the funding pie.

Among the nine categories of fintechs surveyed in the report, payments led funding numbers for 9M 2024, attracting 23 per cent of total fintech funding in the region, a 12 percentage point increase from 2023.

Blockchain in financial services came in second at 21 per cent, increasing by 19 percentage points from 2023. In third place was banking tech at 19 per cent, up 11 percentage points from 2023.

Alternative lending – which led funding numbers last year – faced a 31-percentage-point drop in funding share to 10 per cent, as high interest rates continued to weigh down the lending business.

The fintech industry is likely to benefit from the US Federal Reserve’s rate cuts. “Lower interest rates typically lead to cheaper funding, greater investor appetite from venture capital and higher valuations, ultimately improving exit opportunities,” the report indicated.

Wong Wanyi, fintech leader at PwC Singapore, said that “the growing impact of quantum computing and generative artificial intelligence (GenAI) will continue to push new frontiers in financial services, offering faster, more secure and intelligent solutions”.

The report indicated that GenAI can significantly enhance customer experience with innovative personalised financial advice and products, as well as improved fraud detection and risk management; while quantum computing can transform the fintech sector in areas such as optimising investment strategies.

Source: The Business Times
Link: Here

Asean has benefited from shifting trade patterns since start of US-China trade war: MAS

ASEAN countries have mostly benefited from the diversion of electronics trade between the US and China through increased foreign direct investment (FDI) inflows, which have built up their production and export capabilities, the Monetary Authority of Singapore (MAS) said in its half-yearly macroeconomic review on Monday (Oct 28).

Global merchandise exports continued to fluctuate around a range of 20 to 25 per cent of global gross domestic product from 2018 to 2023, after the onset of the US-China trade war. This is similar to that in the preceding period of 2009 to 2017 – but important compositional effects have occurred.

US’ bilateral trade with China has diverged further from its other trade partners in recent years, following a brief convergence during the pandemic, the central bank said.

In the first half of 2024, bilateral trade between the US and China fell by 6 per cent year on year, and was about 15 per cent lower compared with 2017. In contrast, overall trade between the US and the rest of the world grew by more than 40 per cent since 2017. 


By major commodity groups, electronics was the main drag on US-China bilateral trade between 2017 and H1 2024.

Said MAS: “Concomitantly, trade diversion to ‘connector countries’ gained traction in the electronics value chain.”

It noted that China has been exporting more electronics to Asean countries such as Vietnam, Thailand and Malaysia, as well as India; and US imports similarly recorded an uptick from Asean and India. 

Playing middleman
Asean and India are playing an intermediary role, as foreign firms de-risk and pursue a China+1 strategy, MAS explained.

“The emergence of the ‘connector’ economies stems from the adoption of a dual supply chain strategy by many large global firms,” it continued. ”In essence, these firms are producing in China for the domestic market, and outside of China for the rest of the world.”

This is a shift from how multinational firms previously channelled investments into production in China for both domestic and global markets.

MAS highlighted that while the announced greenfield investments value in the global electronics sector quadrupled to an average of US$200 billion in the 2021 to 2023 period, from 2015 to 2020 levels, this value has generally trended down over the period for China.

The Asean economies and India, however, marked substantial FDI inflows in recent years, particularly in the electronics industry. International companies such as Foxconn, Samsung, LG Electronics and Apple expanded their operations, made significant investments or ramped up production.


These increased inflows bolstered Asean and India’s production capabilities and contributed to their greater electronics exports. 

China supplies intermediate electronics inputs to these regions for production into final goods for the rest of the world.

Asean and India’s shares in China’s intermediate electronics exports have grown in recent years, and they have consequently gained market shares in US’ final electronics imports, MAS said.

It added: “Amid these trade reconfigurations, Asia has retained its centricity in the global electronics value chain, with Asean gaining prominence.”

As at 2023, Asia’s share of global electronics exports remained broadly unchanged from 2015, at around 70 per cent. Meanwhile, Asean in 2023 accounted for 18 per cent, up five percentage points over the same period.


Playing to strengths
The region can continue to gain by specialising in different parts of the value chain, MAS said. “To fully capitalise on new growth opportunities, regional economies could deepen trade agreements, press on with structural reforms, and invest in human capital and infrastructure, including by adopting artificial intelligence technologies.”

As for Singapore, it should see indirect spillovers from increased electronics production in the region, as foreign multinationals continue to pivot towards Asean.

It can complement the regional economies, leveraging its comparative advantage in the production of upstream and midstream electronics goods and providing intermediation services.

The Republic remains attractive for high-value-added semiconductor manufacturing, such as recent projects by Siltronic and VisionPower Semiconductor Manufacturing Company. Furthermore, it could leverage its strategic re-export role and provide supporting services such as transportation, financial and consulting services.

MAS said: “This collaborative approach bolsters regional connectivity and efficiency, positioning Asean as a key player in the evolving global manufacturing and trade landscape.”

Singapore’s shares in China’s exports and US’ imports have largely been unchanged between 2017 and H1 2024.

Source: The Business Times
Link: Here

Great expectations as Malaysia is set to head Asean in 2025

KUALA LUMPUR – Malaysia is taking up the Asean chairmanship for 2025 against a backdrop of heightened diplomatic activity that has raised expectations of what Prime Minister Anwar Ibrahim’s government can achieve heading the usually less-than-dynamic South-east Asian bloc.

The premier has had a busy travel schedule in the two years since he was sworn in after Malaysia’s first-ever hung Parliament in November 2022, and has been vocal over a raft of geopolitical issues, many of which have played well to the domestic gallery.

The pace of his international work is set to continue as 2024 draws to a close, as he embarks on a South America tour in mid-November for the Asia-Pacific Economic Cooperation forum and Group of 20 summit, while also squeezing in a visit to Beijing – his third since March 2023.

This is after deciding to skip in October the Brics Summit in Kazan, Russia, and the Commonwealth Heads of Government Meeting in Samoa.

“One thing’s for sure, Malaysia wants to make sure this is the best ever chairmanship,” Professor Sufian Jusoh, Institute of Malaysia and International Studies (Ikmas) professor of international trade and investment, told The Straits Times.

He added that Datuk Seri Anwar “will probably try to address the most difficult elephant in the room, which is (the) Myanmar (crisis)”.

Officials have been bullish, according to diplomatic sources, about making great strides in 2025 ever since the Asean summit earlier in October, which culminated in the ceremonial handover of the chair from Laos to Malaysia.

“This is not an incoming train but the end of the tunnel,” Malaysia’s Foreign Minister Mohamad Hasan said of the Myanmar crisis on Oct 22 after unveiling the logo and theme – inclusivity and sustainability – for Asean 2025.

But little progress has been made by the military junta to achieve Asean’s five-point consensus since it was agreed upon in 2021. Nearly 6,000 people have been killed and 30,000 imprisoned in the war-torn country. A third of the 55 million population is in need of humanitarian aid as at August.

Failure to stop the violence and start a dialogue between all parties mediated by an Asean envoy with access to all stakeholders, along with allowing in adequate humanitarian aid, has seen Myanmar’s military chief Min Aung Hlaing barred from the bloc’s meetings since October 2021.

Institute of Strategic and International Studies senior fellow Thomas Daniel told ST: “There are heightened expectations due to past statements, but Anwar has been more circumspect on Myanmar.”

A pragmatic outcome, he said, would be to get the junta “to agree to meet Asean halfway” on the five-point consensus and allow a “formal consultation with a wide range of anti-coup stakeholders”, which would mean allowing access to political detainees.

More so than the worsening Myanmar crisis, Malaysia’s chairmanship will be closely watched on Asean’s other key challenge: the prolonged dispute in the South China Sea, given a growing closeness between the Anwar administration and Beijing.

However, Asean’s long-held stance of non-interference in the internal affairs of its members, and a steadfast commitment to acting only on consensus, continues to be a stumbling block to swift progress on both the Myanmar and China situations.

Professor Kamarulnizam Abdullah, principal fellow and founding head of Ikmas, told ST: “People who look from that perspective... of quick answers, Asean doesn’t work like that.”

Ikmas is a “knowledge partner” for Malaysia’s Asean chairmanship, with the government having consultations with the institute and potentially taking suggestions on board.

He said the so-called Asean way of non-interference and consensus-building has won respect from Beijing “because China is also relying on Asean as a conduit to the West”.

But the game of optics and perception in diplomacy can often be a double-edged sword. 

While Mr Anwar’s huge investment into building trust with China may help move things forward on the issue of disputed waterways – especially given the increasing tensions between Beijing and Manila – murmurs are growing over whether Malaysia can be an honest broker between China and Asean, given the extent of Kuala Lumpur’s tilt away from the West.

This can be seen not just in Malaysia’s fulsome support of Palestine and inviting Russian President Vladimir Putin to the 2025 Asean summit, but also Prime Minister Anwar’s effusive praise of President Xi Jinping and condemnation of “China-phobia”.

While some observers see nothing more than self-interest in Malaysia engaging with its top trade partner, diplomats, as well as think-tanks, are far more concerned over how having closer ties with China may erode trust in any attempt by Kuala Lumpur to accelerate a South China Sea resolution.

This might be compounded by Beijing wanting to make progress on a South China Sea Code of Conduct (COC) between Asean and China before the Philippines takes over chairmanship of the bloc in 2026. The territorial claims between Manila and Beijing have escalated into violence, with accusations of boat-ramming being hurled in both directions.

But Dr Ngeow Chow Bing, director of Universiti of Malaya’s Institute of China Studies, believes the obstacles to a COC are more structural.

“There are the often highlighted issues about whether parties external to Asean and China should play a role, and also on dispute settlement mechanisms. But the most crucial is geographical scope,” he told ST.

China would like the COC to apply to its so-called nine-dash line, while Malaysia, for instance, would say the COC should apply only outside of waters it claims absolute sovereignty over, and the Philippines would exclude territories already awarded to Manila through international arbitration.

But to show tangible progress, it is likely that agreement on certain paragraphs and clauses in the COC will be finalised while leaving more contentious sections for the future.

In its role as Asean chair, Malaysia will likely see more success on economic or socio-cultural pillars, such as upgrading relations with the Gulf Cooperation Council countries in the Middle East to include economic discussions.

Deputy Investment, Trade and Industry Minister Liew Chin Tong said on Oct 29: “For the first time, we are thinking of a new way of seeing the world, where we (Asean) are at the centre linking Gulf countries and China.”

Source: The Straits Times
Link: Here

Terengganu’s EPIC partners with Qaswa to explore opportunities in Brunei’s maritime cluster

Terengganu state-owned company Eastern Pacific Industrial Corporation Bhd (EPIC) has signed a Letter of Intent (LoI) with Qaswa Holdings on November 1 to explore opportunities within Brunei’s maritime cluster, focusing on its pioneering marine maintenance and decommissioning yard (MMDY).

The agreement paves the way for EPIC acquire shares and support the operations of Adinin Group’s Qaswa, who are the lead local partner in Anson International, operator of Brunei’s first MMDY on Pulau Muara Besar (PMB), scheduled to be operational by 2026.

EPIC’s involvement represents another foreign direct investment (FDI) in the MMDY project, joining Anson’s technical partners—South Korea’s Dongil Shipyard for marine maintenance and the UK’s CessCon Decom for decommissioning.

“This potential partnership represents a significant chapter for EPIC as we expand our international footprint and expertise. I am confident the LoI will unlock substantial opportunities beyond potential shared acquisitions, enabling valuable exchanges of expertise to elevate our capabilities and broaden our offerings in major infrastructure projects,” said EPIC Group CEO Hj Muhtar Suhaili.

Source: Biz Brunei

Read the full article here

Investment and tourism programme in Chennai to mark RB inaugural flight

Royal Brunei Airlines’ (RB) inaugural flight from Brunei to Chennai on November 5 will coincide with an investment and tourism promotion programme hosted in Chennai.

The Brunei Economic Development Board (BEDB) will host an investment seminar on the afternoon of 6 November, followed by a Brunei Night that evening to promote tourism in collaboration with RB, the Brunei High Commission to India, and Brunei Tourism.

The Minister of Transport and Infocommunications, YB Pg Dato Seri Setia Shamhary Pg Dato Paduka Hj Mustapha, shared the broader programme connected to the inaugural flight during RB’s ceremonial launch event for the Chennai route at Tarindak D’Seni on Friday evening.

The Brunei-Chennai route restores direct connectivity between the two nations after two decades. This milestone also follows a significant meeting between Brunei’s and India’s heads of state in September—the first visit by a sitting Indian Prime Minister to Brunei.

RB will operate three weekly flights to Chennai on its Airbus A320neo, with a flight time of approximately five and a half hours. The route is a welcome addition for the nearly 15,000 Indian nationals residing in Brunei and introduces the Sultanate to a wider Indian audience.

RB CEO Captain Sabirin Hj Abd Hamid highlighted that the airline’s interline and codeshare agreement with Air India enhances the Chennai route, allowing connectivity for passengers from other cities across India to Chennai and to RB’s network destinations, including Melbourne, Hong Kong, Jakarta, Singapore, Seoul, Manila, and Taipei.

Source: Biz Brunei

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Brunei’s potential as a gateway to ASEAN highlighted at inaugural Chennai seminar

Brunei Darussalam’s potential as a gateway to the ASEAN and regional markets was showcased at the Brunei Economic Development Board’s (BEDB) inaugural Investment Seminar in Chennai, held at the ITC Grand Chola on November 6, 2024.

Titled Weaving New Connections: The Brunei-Chennai Story, the event brought together over 100 business leaders from India and Brunei, spotlighting investment opportunities in the Sultanate’s diversifying economy.

Attending the seminar was Brunei’s High Commissioner to India His Excellency Dato Paduka Hj Alaihuddin Pehin Orang Kaya Digadong Seri Lela Dato Seri Utama Hj Awg Md Taha.

In his opening address, BEDB Acting CEO Daniel Leong presented Brunei’s unique proposition as a base for businesses looking to expand into Southeast Asia and the connecting region, owing to its strategic location and robust, familiar legal and business regulatory environment where English is widely used.

“Brunei’s low-tax regime—with no personal income tax, sales tax, or capital gains tax—offers financial advantages that are difficult to match within the region. Combined with Brunei’s strategic location, this makes it an excellent base for regional operations and a springboard into Southeast Asia’s broader markets,” said Leong.

Brunei’s advantageous position is further enhanced by its market access through an increasing number of trade agreements, including RCEP and CPTPP, connecting investors to over three billion consumers.

Source: Biz Brunei

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Brunei total trade grew by 2.9 per cent

The total trade for August grew by 2.9 per cent to BND2,025.8 million, compared to July. This growth was contributed by exports valued at BND1,260.4 million and imports valued at BND765.4 million.

According to a statement released by the Department of Economic Planning and Statistics (DEPS), the major contributors to export value were mineral fuels at 75.5 per cent, followed by chemicals at 18.9 per cent and machinery and transport equipment at 4.8 per cent.

The main export markets were China accounting for 17.2 per cent, followed by Japan and Australia at 16.1 per cent and 14.7 per cent. The largest export commodities to these countries were mineral fuels and chemicals.

Meanwhile, imports in August 2024 were valued at BND765.4 million. The three main import commodities were mineral fuels, accounting for 63.4 per cent, followed by machinery and transport equipment at 10.9 per cent and food at 8.3 per cent.

The largest import partners were Malaysia accounting for 39.8 per cent, followed by Australia at 10.5 per cent and China at 10.3 per cent. The main import commodities from these partners were mineral fuels, machinery and transport equipment as well as food.

Overall, the trade balance rose by 30 per cent, driven by a 7.3 per cent increase in exports, while import value recorded a decrease by 3.6 per cent. The imports for end use categories, were mainly used as intermediate goods processing accounting for 58.9 per cent, followed by capital goods for business operations at 37.3 per cent and consumption goods for household use at 3.8 per cent. The International Merchandise Trade Statistics report for August 2024 can be accessed through DEPS website https://deps.mofe .gov.bn.

Source: Borneo Bulletin

Read the full article here

Transforming Trade: The E-commerce Revolution in ASEAN

Global cross-border e-commerce is growing, fuelled by digitalisation and rising consumer demand. Global B2C e-commerce sales have more than doubled from USD 2.4 trillion in 2017 to USD 5.3 trillion in 2022 and are expected to maintain a high growth trajectory in the coming years. ASEAN countries are well-positioned to capitalise on this growing trend. This potential for e-commerce export growth in ASEAN is underscored by the increasing global demand for online shopping. Although physical retail remains popular, consumers worldwide are increasingly turning to e-commerce, driving substantial increases in export revenues for businesses in the ASEAN-6. Innovations in digital payments are facilitating smoother transactions both domestically and internationally while advancements in Artificial Intelligence (AI)-powered tools for use-cases like demand forecasting and marketing are helping businesses to access new markets.


For MSMEs, these technological advancements are particularly transformative. Digital solutions are breaking down traditional barriers to entry, enabling even the smallest businesses to compete on a global scale. By harnessing these digital tools, ASEAN-6 businesses can enhance productivity, improve customer reach, and capitalise on the growing global e-commerce market. As the region continues to embrace digital transformation, opportunities for cross-border e-commerce are set to expand, offering a robust pathway for economic growth and international trade.


Despite the growing body of research on e-commerce in ASEAN, there are still significant knowledge gaps regarding the region’s export potential. While much attention has been given to domestic e-commerce, the export opportunities remain relatively unexplored. Access Partnership has estimated the size of e-commerce exports in key Asian countries, with this report containing the estimates for e-commerce exports from ASEAN-6 countries in 2023 and 2028. It also provides insights from MSMEs in ASEAN-6 on their current and future e-commerce engagement, as well as consumer insights from key overseas export destinations. Finally, the report analyses the policy landscape in the region and suggests potential policy references that can help expand the e-commerce industry in ASEAN-6.


Download the reports here: https://accesspartnership.com/transforming-trade-the-e-commerce-revolution-in-asean/

Skills mismatch: a barrier to economic growth

With its vigorous maritime transport sector, Asia is still the region best connected to global shipping networks, its leading position in shipping connectivity boosting trade and powering growth, according to the latest Review of Maritime Transport released by the United Nations.

The report published on October 22, 2024 by the UN Conference on Trade and Development (UNCTAD) showed Asian economies retaining top spots on the global Liner Shipping Connectivity Index. China came out on top, followed by the Republic of Korea and Singapore.

Other Asian countries in the top 10 were Malaysia, Japan, and Viet Nam, which incidentally has also recorded the highest long-term increase of 199% in shipping connectivity since 2006.

The index, first introduced in 2004 by UNCTAD, is based on main components of the maritime transport sector such as ship sizes, deployed capacity, numbers of service providers, and weekly calls.

In shipbuilding, China, Japan, and the Republic of Korea continue their dominance, accounting for about 95% of global output. For the first time, China delivered over half of the world’s new ships in 2023. The Philippines comes in fourth place in delivery of newbuilt vessels, followed by Viet Nam in fifth.

However, global trade route disruptions due to geopolitical tensions and impacts of climate change pose challenges to Asia, said the report.

Conflict in the Red Sea has severely affected shipping through the Suez Canal and exacerbated congestion in major ports elsewhere in Asia.

Between March and May 2024, waiting times in Singapore nearly doubled from 24 to 40 hours, while in Port Klang, Malaysia, the number went up from 20 to 26 hours.

Faced with low water levels linked to climate-induced droughts, draft restrictions in the Panama Canal in 2023 led to shipment delays and higher costs.

This has impacted trade routes exporting grains and minor bulk commodities from the Americas to Asia, with a 31% increase in sailing distances for completed journeys and a 25% decrease in cargo volume.

Meanwhile, the report showed that Asia continues to be an engine of merchandise trade, with 80% of trade transported by sea.

The report showed that in 2023, main maritime waterways connecting the East and West accounted for at least 36% of global containerized trade. These include routes from East Asia to North America, Northern Europe, and the Mediterranean.

On the other hand, South-South routes linking the developing world of East and Western Asia, Oceania, Sub-Saharan Africa and Latin America, achieved the highest increase (+9.3%) in its volume of global containerized trade in 2023.

By sector, technology exports from Asia—most notably green energy and artificial intelligence-related products –are expected to drive further recovery in global merchandise trade.

Iron ore trade will continue to grow, given a firm demand from steel producers, particularly in Asia, the report forecasts.

Global gas trade is also projected to increase, considering expanding infrastructure for the storage and transport of liquefied natural gas, as well as rising demand from Asia and Europe.

The paper also found that Asian hinterland complemented port connectivity. Inland terminals, or dry ports, have the potential to boost regional cooperation and benefit landlocked developing countries.

Their development is also part of the Asian Highway Network and Trans-Asian Railway Network, also known as the Eurasian Landbridge.

The network of dry ports in China and the various inland container depots in India, as the report highlighted, have helped improve trade flows by decentralizing seaport operations such as storage and inspections.

At the same time, the report indicated that global maritime trade grew by 2.4% in 2023, recovering from a 2022 contraction, but that the recovery remains fragile.

Key chokepoints like the Suez and Panama Canals are increasingly vulnerable to geopolitical tensions, conflicts and climate change.

These disruptions are extending shipping routes, straining supply chains and raising costs, with profound impacts on food security, energy supplies and the global economy, as over 80% of world trade volume is carried by sea.

The review called for urgent action to strengthen industry resilience, accelerate decarbonization and support vulnerable economies.

It underscored the need for new infrastructure that is sustainable and resilient, a faster transition to low-carbon shipping, and a crackdown on fraudulent ship registrations to safeguard global trade.

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