HANOI: South-East Asia is at a pivotal juncture as geopolitical tensions, supply chain restructuring and rapid advances in artificial intelligence (AI), digitalisation and the global energy transition reshape the world economy.
This is opening up new opportunities for Asean countries, including Vietnam, to strengthen the region’s position as a centre for production, consumption and innovation.
Yet economists said the region’s next phase of development will depend less on low-cost manufacturing and more on its ability to deepen regional integration, strengthen domestic demand and build the infrastructure needed to support higher-value industries.
For decades, Asean’s rise was driven by its role as a manufacturing base for global markets.
Factories across the region supplied electronics, garments, machinery and consumer goods to the rest of the world, helping transform once agrarian economies into export powerhouses.
But according to HSBC Vietnam chief executive Tim Evans, the region is now approaching a new stage of development.
Rather than functioning as a collection of separate economies, Asean has an opportunity to evolve into a more integrated economic ecosystem, one connected not only through trade but also through services, capital flows, digital infrastructure and energy networks.
With a population of nearly 700 million, a young workforce and expanding consumer markets, Asean has the potential to become one of the world’s key growth engines.
However, realising that potential will require deeper cooperation in logistics, energy, digital payments and trade, alongside greater policy coordination across the region.
Recent regional initiatives suggest that Asean is already moving in that direction.
One of the most significant developments is the upgrade of the Asean-China Free Trade Area, known as ACFTA 3.0.
The agreement extends cooperation beyond traditional goods trade into areas such as the digital economy, green development and supply chain connectivity.
As China remains Asean’s largest trading partner, the expanded framework is expected to facilitate greater trade and investment flows across the region, while supporting emerging sectors linked to digitalisation and sustainability.
Another pillar is energy integration.
The Asean Power Grid initiative is becoming critical, as countries seek to accelerate the adoption of renewable energy while ensuring reliable electricity supplies to help optimise resources, improve energy security and strengthen the region’s resilience against external shocks.
HSBC has also pointed out that one of the region’s most under-appreciated strengths lies in its domestic market, citing the World Bank data that average savings rates across six major Asean economies reached about 32% of gross domestic product (GDP) in 2024, nearly six percentage points above the global average.
Those savings represent a significant pool of capital that could support long-term investment and consumption growth.
At the same time, Asean’s digital economy is expanding rapidly. The region has become one of the world’s fastest-growing markets for real-time payments, digital banking and e-wallet adoption.
Its digital economy is projected to reach US$2 trillion by 2030.
The diversity of Asean’s economies also provides a competitive advantage.
Manufacturing capabilities are concentrated in countries such as Vietnam, Thailand and Malaysia, while Singapore serves as a financial and services hub. Indonesia and the Philippines offer large and growing consumer markets.
Within that broader transformation, Vietnam is increasingly being viewed as one of Asean’s most promising investment destinations.
The country recorded GDP growth of 8.02% in 2025, the highest among the Asean-six economies, and attracted US$38.42bil in foreign direct investment, reflecting growing investor confidence in Vietnam.
Participation in major trade agreements, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership, have also further strengthened Vietnam’s access to international markets.
Capital is increasingly flowing into high-value sectors, including semiconductors, electronics, digital infrastructure, AI and renewable energy, rather than traditional labour-intensive manufacturing industries.
In this context, Vietnam is well positioned to evolve from a manufacturing platform into an innovation platform, according to Evans.
Vietnam has already established itself as a key link in regional and global supply chains.
The challenge now is to move further up the value chain, strengthen domestic capabilities and build the infrastructure needed to support a more technology-driven economy.
It is critical for Vietnam to improve governance quality, regulatory transparency, policy consistency and fiscal credibility as well as logistics, digital trade infrastructure, customs procedures and cross-border payment systems. — Viet Nam News/ANN
