ASEAN Becomes the Global Connector Economy
New analysis from ISI Markets reveals that Southeast Asia is now the pivotal hub through which China and other major economies are rerouting supply chains to maintain access to global markets amid rising geopolitical and tariff pressures, according to fresh data.
A new study by ISI Markets, a global market intelligence company, shows that ASEAN has rapidly taken centre stage in global trade realignment. Major economies – with China at the forefront – are restructuring supply chains to avoid traditional bilateral dependencies, establishing Southeast Asia as the world’s essential «connector economy».
ISI Markets highlights that this transition reflects not a fragmentation but a rerouting of global trade channels – and ASEAN is now the switching mechanism that keeps supply chains intact.
Capital Repositioning
ISI Markets identifies a sharp acceleration in manufacturing-related FDI flows into Thailand, Malaysia, and Indonesia. Since diversification efforts began in 2017, these markets have recorded the most significant import-trend shifts globally, confirming their role as top destinations for rerouted Chinese manufacturing capital.
Trade data shows a strong positive correlation between China’s exports to ASEAN and US imports from ASEAN since 2018.
This measurable pattern underscores the bloc’s role as a processing and transshipment hub – a crucial mechanism that preserves supply chain continuity even amid geopolitical tensions.
Vietnam’s Strategic Trade Upgrade Accelerates
Vietnam continues to solidify its status as a manufacturing powerhouse. Its rising trade surplus with the US and simultaneous deepening trade deficit with China match the classic footprint of trade diversion.
China’s rapidly increasing import dependency on Vietnam for electrical machinery – HS 85 goods – further reinforces the shift.
Thailand Pushes Toward Next-Generation Manufacturing
Thailand is fast-tracking its transition into advanced manufacturing. Domestic electric-vehicle production rose from 1 percent to 7 percent in just eighteen months – a structural pivot that signals ASEAN’s emerging role in the future of global industry.
China’s outward direct investment since 2017 correlates strongly with the transformation of import patterns across ASEAN. In 2025 the trend intensified: Thailand, Malaysia, Indonesia, and Mexico now stand out as the essential recipients of manufacturing and capital seeking diversification routes.
Region Positioned for Secular Growth
With more than 650 million consumers and increasingly integrated trade frameworks, ASEAN is uniquely positioned to benefit from global diversification strategies.
As multinationals operationalise new supply routes, Southeast Asia’s role as the world’s economic bridge is no longer emerging – it is established.
