KUALA LUMPUR: South Asia and Asean have emerged as key beneficiaries of the ongoing reorganisation of global trade flows, as companies accelerate supply chain diversification amid tariff volatility and rapid artificial intelligence (AI) adoption, according to Citi’s latest Global Perspectives & Solutions (Citi GPS) report.
In its report titled Supply Chain Financing – Durable Global Trade in the Age of AI, Citi said shipments from North and East Asia to South Asia and Asean surged 44%, underscoring a structural shift towards more regionalised and multipolar supply chains.
The United States has also broadened its import base, with shipments from South Asia and Asean rising 50%, outpacing growth from traditional North and East Asian trade partners.
Despite US tariffs increasing to about 16.8% from 2.4% previously, Citi’s proprietary Global Supply Chain Pressure Index showed that supply chain stress levels remain near pre-pandemic norms.
Businesses have navigated tariff shocks through strategic inventory management, supplier diversification and nearshoring initiatives.
“Technology is fundamentally reengineering how trade finance operates. AI-powered intelligent document processing enables exceptionally high accuracy rates and reducing processing to just minutes.
“Through a pilot of blockchain-based conditional trade payments, we have seen the potential for an evolution from standard paper-based guarantees to near 24/7 digital execution and automated settlement,” Citi global head of trade and working capital Adoniro Cestari said in a statement.
The report also highlighted AI’s role in driving a capital expenditure supercycle in data centres, with Citi Research estimating US$7.75 trillion in global AI-related capex by 2030.
Trade finance solutions are increasingly supporting this buildout, while adoption of AI tools among large corporates has risen to 36%, up 18 percentage points from a year earlier.
With 64% of companies citing rising input costs as their primary concern, working capital management has become a C-suite priority.
On average, 6.3% of working capital is now tied up in tariff-related costs, prompting firms to deploy inventory finance, structured receivables and dynamic discounting to unlock liquidity.
Citi’s survey of 710 large corporations found that 65% are actively diversifying supply chains away from one or more countries, with Vietnam, Thailand, India and Mexico among the preferred destinations.
