A deep dive into private sector sentiments can yield some insight into ASEAN’s preferred economic partner of choice. Kristina Fong Siew Leng, Lead Researcher for Economic Affairs at the ASEAN Studies Centre, ISEAS - Yusof Ishak Institute
The ASEAN region has been a hotbed of economic activity, drawing significant attention from developed economies for trade and investment opportunities. China remains ASEAN’s key trade partner, representing 18.8 per cent of total trade (US$722 billion) for the region in 2022, with the U.S. representing a more moderate 10.9 per cent share at US$420 billion.
That said, foreign direct investment (FDI) inflows from the U.S. into ASEAN outpaced those coming in from China, at US$37 billion versus US$16 billion in 2022 respectively
Given the ongoing push and pull in the region caused by the China-U.S. trade rift, ASEAN countries continue to strategically balance their delicate relationships with these two big economies. Using insights derived from the responses from private sector respondents in the latest ISEAS – Yusof Ishak Institute State of Southeast Asia Survey 2024, some interesting perspectives are uncovered. These may help to explain regional firms’ sentiments about ongoing geopolitical and geoeconomic tensions, and what preferences the firms may have in terms of strategic economic partnerships going forward.
Caught up in the crossfire of U.S.-China trade tensions, private sector stakeholder sentiments continue to show a strong preference to err on the conservative side. A larger proportion of respondents opted to indicate a neutral stance of not picking sides (31.4 per cent) compared to a year ago (26.5 per cent)
