The Great Trade Realignment: Asia’s Once-a-Generation Opportunity

Global trade continues to enjoy robust growth, but geopolitical uncertainty has significantly impacted both its complexity and interconnectivity. Change is the new constant as strategic shifts in investment and sourcing emerge and realignments become clearer. This dynamic environment, albeit uncertain and disruptive, offers unprecedented opportunity for nations and businesses to reorient themselves toward new partners and industries.

Asia is at the heart of this strategic trade shift. Corporates in the region are set to drive the future of global trade through their early embrace of industries of the future and insightful expectations for coming demand. Asia is one of the most highly integrated trading regions in the world, and its interconnectivity, coupled with preeminence in future growth sectors, such as AI and other disruptive technologies, presents it with clear and considerable opportunity. Its leaders can drive new trade alliances and corridors—reshaping the geometry of global trade itself.

Industrial policy and competition for critical raw materials are driving early shifts in foreign direct investment (FDI) that are already starting to reshape traditional business corridors worldwide. The impact of this could be profound. Up to 30% of global trade—$14 trillion in value—could shift from one corridor to another through 2035.^[1]

Corridors may also shift in response to sustainability factors. Significant opportunities will emerge along green corridors in renewable energy and sustainability as investment is directed into decarbonization technologies.

McKinsey has identified three future trade scenarios and their outcomes for trade volumes. The baseline scenario sees growth reaching $45 trillion; a fragmented scenario involving significant tariffs reduces this number to $42 trillion; and a diversification scenario, where businesses diversify supply chains for all concentrated imports, reaches $44 trillion.

This realignment opens a white space as relationships strengthen or weaken between specific regions or countries. Paying attention to investment flows can assist in understanding which future trading scenarios are becoming more probable and how corridors are being redrawn. These flows can further highlight specific corridors that may see accelerated growth, making them proportionately safer bets for stakeholders.

Navigating the Future

As new global forces rewrite traditional trade rules, the ability to navigate FDI signals and changes in the ecosystem of new products will be crucial. All business leaders now face the challenge of how to move fast enough to unlock new sources of growth in the industries of the future, while maintaining a flexible approach in a more contested operating environment.

The geographical distribution of investment is changing as it moves away from traditional hubs for many future-shaping sectors. By 2030, new FDI-driven data center capacity outside Mainland China and the United States is set to nearly double from its 2022 level, and electric vehicle battery manufacturing capacity outside China could grow fourfold.^[2]

Farsighted industry leaders can now identify new industrial hubs and take advantage of the opportunities they present. This extends beyond sectoral boundaries, influencing infrastructure, logistics and business services, and often drives growth in a host of other industries. For example, McKinsey estimates that AI’s global economic potential could be between $15.5 trillion to $22.9 trillion annually by 2040.^[3]

Asia sits at the center of this growth story: AI investments in the region are projected to reach $110 billion by 2028, reflecting a 24% compounded annual growth rate from 2023.^[4] The region dominates the trade and manufacture of chips for most electronic devices, and 33 of the world’s 40 largest chip corridors involve Asia alone.^[5]

Asia has swiftly established its manufacturing prowess in emerging technologies that are undergoing quick, disruptive change, such as advanced displays and generative AI. Indeed, half of the world’s top 50 life sciences companies have set up global capability centers (GCCs) in India, transforming the country into a global innovation hub. With 1,700 GCCs focused on innovation in AI, engineering and software design, India alone is set to generate exports of $105 billion from these activities by 2030, up from $65 billion today.^[6]

Business leaders are now faced with unprecedented challenges—but also unprecedented opportunities. Navigating the new trade and investment ecosystem will require adaptability and resilience, together with the ability to pivot at speed when required.

By paying close attention to investment flows, industry leaders can read the early signals about how and where global economic ties may form or fray, and how the geometry of global trade may evolve. Corporates that use this intelligence, combined with a robust and forward-looking strategy, can drive the reshaped global markets of the future. Those within Asia have a once-in-a-generation opportunity to propel the change they want to see.

Gautam Kumra is chairman of McKinsey’s offices in Asia, based in Singapore.

Sources:

[1] International Monetary Fund data, accessed November 2025; “Latest statistics,” UN Trade and Development (UNCTAD) Data Hub, accessed November 2025; McKinsey Global Institute analysis. [2] McKinsey [3] McKinsey [4] International Data Corporation [5] McKinsey [6] Ministry of Labour & Employment, Government of India