South Korean media: ASEAN may replace China as the global supply chain center

Data shows that from 2016 to 2020, global direct investment in the 10 countries of the Association of Southeast Asian Nations (ASEAN) was US$731 billion, and direct investment in China was US$698.9 billion. The Federation of Korean Industries (FKI) said on August 18 that ASEAN is replacing China as the center of the global supply chain.

According to BusinessKorea, global investment in ASEAN and China during the above period increased by 30.4% and 10.4% respectively compared with 2011-2015. In 2017, global direct investment in ASEAN countries accounted for 9.4% of the global total, and in 2019 the proportion increased to 11.8%, while China's proportion was 8.3% and 9.2% respectively." 

Taking South Korea as an example, in 2014, South Korea's direct investment in ASEAN accounted for 16.2% of its total outward direct investment. This figure increased to 17.3% in 2019 and reached 20.3% in 2020; the proportion of South Korea's direct investment in China fell from 12.9% to 10.3% and was 9.2% in 2020.

From 2016 to 2020, South Korea's direct investment in ASEAN was US$31.7 billion, an increase of 74.2% over the previous five years; investment in mainland China, Taiwan and Japan increased by 65.4%, 40.6% and 21.8% respectively.

According to the Federation of Korean Industries, ASEAN's position in Asia's intermediate product trade is now almost equal to that of China. As of 2019, China accounted for 31.2% of Asia's total trade, while the six ASEAN member countries (the Philippines, Indonesia, Vietnam, Thailand, Singapore and Malaysia) accounted for 30.8%.