SINGAPORE (Xinhua): China has become a primary hub in the production network of the Asean+3 region, comprising Asean member states plus China, Japan, and South Korea, the Singapore-based Asean+3 Macroeconomic Research Office (AMRO).
The past two decades have seen a fundamental structural shift underpinning the region's resilience, the institute said in its Asean+3 Regional Economic Outlook 2026.
"From the supply side, regional production networks have evolved from a Japan-centered hub into a denser, more interconnected architecture anchored by China," it said, noting that this was supported by China's expanding manufacturing capacity, logistics infrastructure, and central position in intermediate goods trade.
"These supply linkages reflect interdependence rather than unidirectional dependence," the report said.
On the demand side, Asean+3 has emerged as a major source of global final demand, collectively larger than the United States, with intraregional demand now far more significant than two decades ago.
This relationship is also two-way: within Asean+3, China is the dominant demand hub, while other economies are key sources of final demand for Chinese exports, the report noted.
At the same time, foreign direct investment (FDI) reinforced these links, with rising intraregional FDI complementing trade and production relationships, the report said.
During Monday's release conference, AMRO Chief Economist He Dong told reporters that for supply chains to be resilient, it is important for economies involved to increase domestic-value-added content, meaning larger positive spillovers from FDI into the domestic economy.
Firms in Asean can benefit by upgrading local capacity. By increasing domestic value-added, regional firms gain more opportunities and make supply chains more resilient to external shocks, He said. -- Xinhua
