Southeast Asia will take up China’s mantle as a factory to the world over the next 10-15 years, as companies move to take advantage of cheap and abundant labour sources, according to ANZ Bank economists.
The economists said that the transformation will be driven by the growth of ASEAN with the bloc becoming the “third pillar” of regional growth after China and India.
By 2030, more than half of the 650 million people in Southeast Asia will be under the age of 30, part of an emerging middle class with high rates of consumption, said ANZ.
Moreover, the establishment of the ASEAN Economic Community by the end of 2015 will enable free movement of goods, services , capital and labour between its member states.
ANZ estimates that the Southeast Asian nations could lift intra-regional trade to US$1 trillion by 2025. Foreign direct investment into ASEAN from the major economies could climb to US$106 billion in 2025.
ASEAN can participate in Asia’s expanding production network as it possesses advantageous land and maritime routes.
Founded in August 1967, ASEAN consists of Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Laos, the Philippines, Singapore, Thailand, and Vietnam.