ASEAN Snapshot 2023
Focus on German-ASEAN business relation
Ladies and Gentlemen,
Welcome to ASEAN snapshots in 2023.
ASEAN, a market of 646 million people, has maintained its status as one of the most dynamic economic regions of the world, reaching a GDP growth rate of 5.0% in 2022. Slightly down by 0.5% compared to 2021, but still very respectable in the midst of worsening global economic conditions, with supply chain disruptions, rising energy costs, tightening monetary policies and high inflation rates.
Intra ASEAN trade has grown by more than 30%, helping to offset some of the decline in exports to the US, EU and China. Meanwhile Foreign Direct Investments (FDI) into ASEAN increased by 46.5% to 179.2 billion US$, indicating a shift of supply and productions chains away from China to ASEAN in 2022.
The total trade between ASEAN and Germany reached 85.1 billion US$ in 2022, an increase of 25.1% YoY. The flows of FDI from Germany to ASEAN grew to 3 billion US$ in 2021,
from a negative growth of US$ -2.1 billion US$ in 2020. More than 3,000 German companies are invested in ASEAN, their number has been growing steadily and is likely to increase even more in the future, considering long-term as well as recent geopolitical developments, like rising trade tensions and the reorganization of supply and production chains. Increasing regional and global integration, improving regulatory environments, competitive cost structures and diversification opportunities are positioning ASEAN very well as alternative or complementary investment destination for German companies.
The German Chambers ASEAN Business Council (GCABC) - #PartnerInASEAN, is pleased to introduce the 2023 edition of the ASEAN Snapshots, a booklet with a variety of up-to-date charts and infographics about ASEAN economic developments, ranging from demographics, economics as well as trade and investment information.
We look forward supporting you in doing business in ASEAN.
The ASEAN – the Association of Southeast Asian Nations – is among the fastest growing regions of the world with 10 member states: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
Vietnam joins ASEAN.
Laos and Myanmar become members.
Despite a more challenging macroeconomic environment, the uncertain global economic conditions and tightening monetary policy in recent years, ASEAN still proves its position and resilience in the new era, becoming the world’s bright spot in terms of security and economic growth.
In the upcoming time, ASEAN is expected to remain attractive to foreign direct investment with trends in commercial and state investment and provide investors with exposure to one of the fastest-growing regions globally.
Inception by ASEAN 5:
Indonesia, Malaysia, the Philippines, Singapore, and Thailand. Brunei becomes a member.
1967
Cambodia takes part in, forming the ASEAN 10.
Signing and implementing the free trade agreements with China (ACFTA); India (AIFTA); Japan (AJCEP); Australia-New Zealand (AANZFTA) and South Korea (AKFTA).
2000 1984
The establishment of the ASEAN Economic Community (AEC).
The Regional Comprehensive Economic Partnership (RCEP) was signed by 10 ASEAN member states, Japan, South Korea, Australia, New Zealand and China. It accounts for nearly one-third of the world’s population and GDP.
The kick-off of the EU-ASEAN Smart Green ASEAN Cities program elevated the EU-ASEAN relationship even further, which aims to support sustainable urbanization in the ASEAN region, reduce the environmental impacts of urban areas and improve the quality of citizens’ life.
2015 1995 2020 1997
2021 1999
55 years of development, ASEAN has become the world’s most successful bloc developing based on three pillars: politics-security, socio-culture, and economics. ASEAN continues to promote and expand relations with 11 important countries and international organizations including Australia, China, the US, Russia, Japan, Korea, India, and the EU, through many stances and regulations of ASEAN such as the ASEAN Charter and the Treaty of Amity and Cooperation (TAC).
2022
ASEAN Highlights 2022
03
ASEAN regionAn economic bright spot
The year 2022 marks a special milestone for the ASEAN as the organization of these 10 member countries turns 55 years old.
45th anniversary of ASEAN-EU relations
• The commercial benefits from countries gradually reopening their economies after the pandemic.
• Intra-ASEAN trade is growing by more than 30%, helping to offset some of the decline in exports to the US, EU and China.
• The restructuring of production chains from China to ASEAN has made FDI reach a new record, which increased by 46.5%, up 179.2 billion US$ in 2021.
• Flexible monetary policy was managed by central banks and the supply chains have shifted to the region.
04
05
Over the past 45 years, ASEAN-EU relations have developed positively and achieved many achievements. In 2021, ASEAN is the EU’s 3rd largest non-European trading partner while the EU is ASEAN’s 3rd largest trading partner with a total two-way trade value of 268.9 billion US$. Additionally, EU is ASEAN’s 2nd largest foreign direct investment with a total capital of 26.5 billion US$.
On November 12 2022, ASEAN had upgraded their diplomatic relations with the US and with India to the level of Comprehensive Strategic Partnership (CPS). Regarding ASEAN - India relations, the two sides vowed to strengthen cooperation in digital, smart agriculture and public health. On the other side, ASEAN and US together committed to tackle the biggest issues from climate to health security and counter the threat to the rules-based world order.
At the 6th ASEAN - Germany Development Partnership Committee (AG-DPC) Meeting in November 2022, the two sides renewed commitment to enhance cooperation under the framework of their development partnership, which are: Expanding the long-standing ASEANGermany partnership, strengthening relations under the new PCA framework 2023-2027, addressing and mitigating the impact of emerging global challenges on food security, supply chain resiliency, green economy, climate change, and disaster risk management.
The total trade between ASEAN and Germany reached 85.1 billion US$ in 2022, 25.1% YoY increase.
The flows of FDI from Germany to ASEAN recorded a tremendous growth to 3 billion US$ in 2021 from a negative growth of -2.1 billion US$ in 2020.
7 6
GDP Growth
2021
ASEAN is in the TOP 5 economies by GDP in 2021
Export 2021 Import 2021
1.7 T US$
Total export volume: 1.7 trillion US$
Key export products: Electrical machinery and equipment; Nuclear reactors, boilers, machinery and mechanical appliances; Mineral fuels & oils; Animal or vegetable fats and oils and their cleavage products; Plastics and articles thereof.
1.6T US$
Total import volume 1.6 trillion US$
Key import products: Electrical machinery and equipment; Mineral fuels & oils and products of their distillation; Nuclear reactors, boilers, machinery and mechanical appliances; Iron and steel; Plastics and articles thereof.
Challenges Solutions
• Worsening global economic conditions;
• Energy supply crisis;
• Tightening monetary policy;
• Global rising inflation rate;
• Climate change;
• Resource depletion.
• More integration into the global supply chains;
• Improving investment in infrastructure, including the digital economy;
• Rapid expansion of renewable energy and energy efficiency;
• Prioritizing the development of high-tech agriculture system, which is competitive, adaptable to climate change and well-integrated into regional and global supply chains.
Industry 4.0
• FDI in Information and Communication Technologies (ICT) quadrupled in 2021 to 7 billion US$.
• German companies invested in the industry, including:
- Bosch is focusing on Vietnam as its key Industrial Internet of Things solutions hub, with the expansion plan of a software and engineering R&D center, accommodating 6,000 engineers until 2025.
- SAP has its offices in Indonesia, Malaysia, Philippines, Singapore, Thailand, Vietnam and data centers in Malaysia and Singapore.
Green and zero-emission commitment
• ASEAN Member States are adopting climate mitigation and adaptation measures, including carbon-neutral policies and reduction of carbon emission.
• Rise in FDI in electrical vehicles manufacturing.
• Germany’s PNE to build 4.6 billion US$ offshore wind farm with 2 GW in Binh Dinh, Vietnam.
• National program and institutional support:
EV Industry Development Road Map (Thailand); House Bill 10213 Electric Vehicle Industry Development Act (Philippines); Vietnam with Just Energy Transition Partnership with G7 to mobilize 15.5 billion US$ to support Vietnam’s green transition.
A growing regional semiconductor ecosystem
• Siltronic continued building a 2.4 billion US$ wafer fabrication facility in Singapore in 2021.
• In 2022, Infineon Technologies announced an expansion with a 2.6 billion US$ fabrication facility in Malaysia.
People
With a total of 646 million people and a wealth of natural resources, the region has an expanding middle class as well as a young, dynamic and increasingly well-educated population:
• Low unemployment rate 5% (2021).
• Labor force participation rate 66.6% (2021).
• Almost half of population were under 30 years of age (2021).
• Was the 3rd largest population in the world.
Global Gateway
In promoting the establishment of the FTA between the EU and ASEAN, the EU announced the investment of 10 billion EURO as a part of Global Gateway in ASEAN countries, focusing on the green transition, transport, digitalization and promoting sustainable value chains.
German Investment In ASEAN
Major sectors of German FDIs 2021
German Trade with ASEAN 2022
German exports to ASEAN
Turnover 2022
Major export products: Chemical products; Machinery; Electronics assembly; Electrical engineering; Motor vehicles and spare parts
German imports from ASEAN
Major import products: Electronics assembly; Textile & Garment; Electrical engineering; Footwear; Chemical products; Machinery, Foodstuffs
Gẻerman FDI Net Inflow to ASEAN
Opportunities Challenges
Potential sectors to invest in: Digital technology, green energy, advanced manufacturing, construction, healthcare, education and training, and social work activities.
Negative exchange rate movement, decrease in consumer demand, disruption in the supply chain, unstable economic policy frameworks and the high price of raw materials are main challenges for German business in ASEAN.
Export volume to Germany 2022
Import volume from Germany 2022
Export volume to Germany 2022
Import volume from Germany 2022
Export volume to Germany 2022
Import volume from Germany 2022
Export volume to Germany 2022
Import volume from Germany 2022
Export volume to Germany 2022
Import volume from Germany 2022
Export volume to Germany 2022
Import volume from Germany 2022
Export volume to Germany 2022
Import volume from Germany 2022
PopulationF (m)
Surface (km2)
Real GDP (YoY%)
Nominal GDP 2022 (billion US$)
PopulationF (m)
Surface (km2)
Real GDP (YoY%)
Nominal GDP 2022 (billion US$)
PopulationF (m) Surface (km2)
Real GDP (YoY%) Nominal GDP 2022
Population (m)
Surface (km )
Real GDP (YoY%)
Nominal GDP 2022 (billion US$)
Sources: GTAI, Destatis, Deutsche Bank
PopulationF (m)
Surface (km2
Real GDP (YoY%)
Nominal GDP 2022 (billion US$)
PopulationF (m)
Surface (km2)
Real GDP (YoY%)
Nominal GDP 2022 (billion US$)
Cambodia - Laos - Myanmar - Vietnam (CLMV)
East-West Economic Corridor
The CLMV sub-region consists of four countries: Cambodia, Laos, Myanmar and Vietnam. The purpose of this cooperative mechanism is to foster regional economic integration to ensure stability and prosperity of the four countries, and to narrow the development gap between the sub-region and other ASEAN members.
Fields of cooperation are trade and investment, digital economy, human resources development, agriculture, industry, energy, transport, information technology and tourism.
Action Plan for 2023-2024 period
• Deepening the cooperation.
• Implementation of regional commitments and post COVID-19 crisis recovery plan.
• Solutions and cooperation programs to help envision the CLMV in 2030 as upper-middle income countries.
FDI
• Accounted for 12.2% share of FDI inflow in ASEAN.
• Vietnam, Myanmar: simplifying administrative procedures and requirements, reduction, or exemption of administrative fees, fiscal incentives, assistance with recruitment and training of skilled labor/ assistance with immigration and residence procedures
• Laos: the 6 billion US$ rail infrastructure project linking the country with China opened in December 2021; the 2.4 billion US$ 728 MW Phou Ngoy hydropower plant signed in 2021.
• Infrastructure-related activities such as power and renewable energy receive the most FDI.
• Despite the impact of the pandemic, investors remained active in a wide range of industries in Cambodia.
Industry 4.0
• In Vietnam, Bosch Rexroth and SAP are among the prominent investors in 4.0 infrastructure of major companies.
• Siemens, Phoenix Contact are investing in Cambodia and Myanmar through training programs, authorized dealerships, and representative offices.
Sources: ASEAN Investment Report, GTAI, MoIT, Destatis
With the length of 1450 km, the economic corridor connects the most strategic provinces, ports and border gates of Myanmar, Thailand, Laos and Vietnam.
Running along National Highway 9 , the EWEC aims to facilitate transportation between International Border Gate Lao Bao (Laos) and the economic zones and major international seaports of the provinces of Quang Tri, Thua Thien Hue and Danang.
• Upgrading and expanding National Highway 9, the 14 km-long section from Cua Viet Seaport to National highway 1A, with capital of more than 19 million US$.
• National Highway 15D project connecting My Thuy deep-water seaport to La Lay International Border (Laos) with total length of 92 km.
• A 55-km long coastal road through the province Quang Tri. The total investment is set at 89.5 million US$, running from 2021 to 2025.
Free Trade Agreements
• EU- Vietnam FTA
• RCEP, TPP11, AEC, ASEAN FTAs
• Everything but Arms (EBA) removes tariffs and quotas for all imports of goods (except arms and ammunition), coming into the EU (applicable for Laos, Cambodia, Myanmar)
CLMV - sub-region remains one of the largest textile exporters of Germany
22.3B US$ 29.7%
Indonesia, the largest economy in Southeast Asia and the region’s only member of the G20, achieved a strong growth of 5.31% in 2022 amid global headwinds. With the advantage of having the world’s fourth largest population, Indonesia is emerging as a global economic player with key roles in the global electric vehicle supply chain and in the region’s digital economy.
German companies’ spending on local investments in the next twelve months?
Based on the survey result of AHK World Business Outlook Fall 2022
EXPORT (2021) IMPORT (2021)
Coal; Oils, fats, waxes; Iron & Steels; Raw materials (excluding fuels); Chemical products
Chemical products; Machines; Food; Electronics; Petrochemicals
Metal goods; Electricity/Gas/Water supply; Transport/Logistics/Telecommunications; Paper/Printing; Mining
Major German export products (2021)
Chemical products; Machines; Measurement/ Control Tech; Electrical engineering; Food Textiles/Clothing; Shoes; Raw materials; Food; Electronics
Major German import products (2021)
Malaysia
Over the past 50 years, Malaysia has successfully reduced extreme poverty and diversified its economy from being agricultural and commodity-based, to becoming a manufacturing and global services hub. In the near future, the country is expected to grow from an upper middle-income to a high-income economy by 2024. Particularly, Malaysia has remained Germany’s biggest trade partner in ASEAN for the last two years. Indeed, trade activities contribute tremendously to the country’s employment creation and income growth.
Myanmar
Myanmar is the second largest country in Southeast Asia and a home to a skilled, motivated and young population. It has direct access to the developing economies such as China, India and other international markets through a number of seaports. Despite the current economic uncertainty, the establishment of efficient national and international supply chains, as well as new investment incentives and simplified processes for investors are prioritized to improve the country’s global competitiveness and future economic growth.
German companies’ spending on local investments in the next twelve months?
Based on the survey result of AHK World Business Outlook Fall 2022
EXPORT (2021) IMPORT (2021)
Export
INVESTMENT (2021)
15.1B US$ 14.3B US$
Major export partners
Major import partners
Major FDI contributors
2.1B US$
Major export products
Foodstuffs; Textile/Clothing; Natural gas; Raw material (without fuels); Non-ferrous metals
Major import products
Major FDI sectors
Petrochemicals; Chemical products; Textile/ Clothing; Foodstuffs; Machinery Power; Oil and Gas, Manufacturing; Transport & Communication; Real estate
Germany - Myanmar relations
German exports (2022)
0.1B EUR
1.6B EUR German imports (2022)
German FDI Net Inflow
2021F
8M EUR +
Major German export products (2021)
Chemical products; Machinery
Major German import products (2021)
Textile/Clothing; Footwear
The Philippines’ economic growth engine is rooted in strong consumer demand supported by a vibrant labor market and a young, growing middle-class population. With notable performance in the services sector including business process outsourcing, real estate, tourism, and finance and insurance industries, the country’s economy is expected to rebound strongly and to become an upper middle-income country in the short term.
German companies’ spending on local investments in the next twelve months?
Based on the survey result of AHK World Business Outlook Fall 2022
EXPORT (2021) IMPORT (2021)
INVESTMENT (2021)
Nominal GDP (Billion US$)
Hong Kong
Electronics assembly; Electrical engineering; Foodstuffs; Raw materials (excluding fuels); Non-ferrous metals
Electronics assembly; Chemical products; Foodstuffs; Petrochemicals; Electrical engineering
Information & Communication Technology; Manufacturing; Administrative services; Real estate management; Construction industry
GDP per capita (US$)
GDP growth (%) CPI (YoY %) Ann Avg
2B EUR 5.2B EUR
German exports (2022)
German FDI Net Inflow 2021
113M EUR +
Major German export products (2021)
Chemical products; Electronics assembly; Machinery; Other vehicles; Electrical engineering
Major German import products (2021)
Electronics assembly; Electrical engineering; Foodstuffs; Oil, Fats, Wax; Measurement and Control Technology
Singapore
Singapore remains ranking #1 in Asia in terms of sustainability, due largely to the government’s green initiatives and efforts in recent years, according to The Sustainability Cities Index by Arcadi. As one of the greenest cities in the world, Singapore has launched the ambitious Singapore Green Plan 2030, aiming at advancing the country’s national agenda on sustainable development.
German companies’ spending on local investments in the next twelve months?
Based on the survey result of AHK World Business Outlook Fall 2022
EXPORT (2021) IMPORT (2021)
458B US$ 407B US$
INVESTMENT (2021)
99.1B US$
Nominal GDP (Billion US$)
Major
Electronics assembly; Chemical products; Machinery; Petrochemicals; Electrical engineering
Major
Electronics assembly; Petrochemicals; Machinery; Chemical products; Mineral oil
Finance & Insurance; Wholesale & Retail; Manufacturing; Professional and Administrative & Support Services; Transportation & Storage
GDP per capita (US$)
GDP growth (%) CPI (YoY %) Ann Avg
7.7B EUR 6.9B EUR German imports (2022) Sources:
German exports (2022)
German FDI Net Inflow
2021
8,554M EUR +
Major German export products (2021)
Machinery; Chemicals products; Electrical engineering; Electronics assembly; Other vehicles; Motor vehicles & spare parts
Major German import products (2021)
Chemical products; Electronics assembly; Measurement and Control technology; Machinery; Electrical engineering.
Thailand
As the second largest economy in ASEAN, Thailand has advanced into an upper middle-income country and well on track to reach the Sustainable Development Goals.
One of the main contributors to Thailand’s prosperous economy is its automotive industry with high capacity of vehicle production and great export volume, thanks to abundant skilled workforce. Since the first launch in 2016, Thailand’s Eastern Economic Corridor has been considered as Southeast Asia’s new engine of growth, with the vision of upgrading manufacturing, transport and logistics and creating areas for sustainable economic and social development.
German companies’ spending on local investments in the next twelve months?
Export volume Import volume FDI net inflow
Major export partners
Major import partners
Major FDI contributors
Nominal GDP (Billion US$)
Major
Electronics assembly; Foodstuffs; Motor vehicles and spare parts; Chemical products; Machinery
Electronics assembly; Chemical products; Mineral oil; Machinery; Electrical engineering
Manufacturing; Motor vehicles and spare parts; Finance & Insurances; Real estate; Wholesale & Retail
Germany - Thailand relations
GDP per capita (US$)
GDP growth (%) CPI (YoY %) Ann Avg
Major Unit: % 1.5
exports (2022) 5.4B EUR 8.6B EUR
products; Machinery; Motor vehicles and spare parts; Electrical engineering; Electronics assembly; Measurement & Control technology
export products (2021) Major German import products 3.3 3.8 3.8
German imports 31.4 54.3 11.4 2.9 Higher Unchanging Lower None 7,658 7,561 7,875 29 28
Vietnam
Shifting from a centrally planned to a market economy, Vietnam now is one of the most dynamic growing countries in Asia. Deutsche Bank forecasts Vietnam’s economic growth at 5.5 percent in 2023, following a solid recovery to 8.02 percent in 2022. Thanks to a great number of favorable incentives and relevant free trade initiatives, including CPTPP (TPP11) and EV-FTA, Vietnam will continue to be an important link in the global supply chain and a potential investment destination in the region.
German companies’ spending on local investments in the next
Electronics
59M EUR +
Indonesia
Malaysia
German-Indonesian Chamber of Industry and Commerce
Jan Rönnfeld
info@ekonid.id
+62 21 3154685
www.ekonid.com
Vietnam
Myanmar
Cambodia
Laos
Daniel Bernbeck
daniel.bernbeck@malaysia.ahk.de
+60 3 92351800
www.malaysia.ahk.de
Philippines
and
Marko Walde
walde.marko@vietnam.ahk.de
+84 28 3823 9775
www.vietnam.ahk.de
www.myanmar.ahk.de
Singapore
Thailand
Christopher Zimmer
christopher.zimmer@gpcci.org
+63 2 85198110 loc 812
www.philippinen.ahk.de
Dr. Tim Philippi
tim.philippi@sgc.org.sg
+65 64335331
www.sgc.org.sg
Dr. Roland Wein
wein@gtcc.org
+66 2 0550611
www.thailand.ahk.de
Imprint
Delegation of the German Industry and Commerce in Vietnam
Ho Chi Minh City Office
Deutsches Haus Ho Chi Minh City
4th Floor, 33 Le Duan Blvd, Ben Nghe Ward, District 1, Ho Chi Minh City, Vietnam
Tel.: +84 (28) 3823 9775
Fax: +84 (28) 3823 9773
Hanoi Office
Lotte Center Hanoi, East Tower 18th Floor, 1803 - 1804, 54 Lieu Giai,
Ba Dinh District, Hanoi, Vietnam
Tel.: +84 (24) 3825 1420
Fax: +84 (24) 3825 1422
www.vietnam.ahk.de
