ASEAN as the Super-Connector: Unlocking Regional Trade and Global Growth

With approximately a third of the world’s seaborne trade passing through its waters,^[1] the Association of Southeast Asian Nations (ASEAN) has become a pivotal trade super-connector, linking businesses across East and West.

The region’s unparalleled market access, strategic location, and growing manufacturing capabilities are strengthening supply chains and attracting significant foreign investment.

As ASEAN prepares for its next phase of growth, the next five years will be crucial in shaping its role as a global trade leader, driven by investment, innovation and stronger regional connectivity.

Investment inflows will continue to drive growth

ASEAN has emerged as one of the world’s fastest-growing regions for foreign direct investment (FDI) in recent years. Inflows into ASEAN hit a record US$226 billion in 2023, bucking the trend of global investment flows decreasing over the same period. This represented a 17% share of global FDI, compared to an average of around 8.2% between 2015 and 2019.^[2]

As a result, Vietnam has become a key manufacturing hub for electronics, textiles, and machinery, while Thailand and Indonesia are attracting investments in electric vehicle (EV) production.

With its pro-trade policies, modern transport and manufacturing infrastructure, and easy access to all 10 member markets, ASEAN is viewed as a stable and attractive investment destination. FDI inflows could eventually reach $300 billion annually by 2030.^[3]

Strengthening ASEAN’s trade resilience

ASEAN’s growing integration into global trade is supported by robust intra-ASEAN trade networks and stronger connectivity with external partners. Driven by expanding trade corridors connecting East and West, ASEAN exports are forecast to grow by 6.7% annually through 2030, outpacing the global average of 5%.^[4] East Asia is the region’s biggest export partner and forecast to grow to US$958 billion by 2030—up from US$584 billion in 2021^[5]—followed by the United States, with bilateral trade reaching almost US$500 billion in 2023.^[6] ASEAN-South Asia trade is also growing, with imports and exports set to double by 2030.^[7]

Trade between ASEAN member states is also a key growth driver, accounting for almost 10% of total investment flows in ASEAN in 2023.^[8] Supported by the ASEAN Free Trade Area (AFTA) agreement, which reduces tariffs on goods traded within the region, intra-ASEAN trade is expected to increase by 8.7% annually until 2030,^[9] led by the electronics, manufacturing, and agriculture sectors.

Innovation and partnerships are driving connectivity

Innovation and collaboration are at the heart of ASEAN’s trade boom. Standard Chartered is playing a critical role in this expansion by leveraging cutting-edge digital platforms to help its clients operate more efficiently across borders. For example, Partior uses blockchain technology to facilitate real-time, multicurrency payments, while Straight2Bank Autoquote, simplifies cross-border transactions for businesses by enabling them to digitally request and accept pricing quotations for letters of credit on demand, at any time.^[10]

Collaboration with key stakeholders such as the Asian Development Bank amplify these efforts by removing trade barriers and enabling businesses to grow in emerging markets.^[11] As a founding member of Singapore Trade Data Exchange (SGTraDex), a platform that collates data from various actors within the trade ecosystem, Standard Chartered also helps businesses to streamline supply chain data sharing, facilitating faster and more cost-effective cross-border trade.

Empowering MSMEs and driving inclusive growth

Micro, small, and medium-sized enterprises (MSMEs) are the backbone of ASEAN’s economy, comprising over 97% of all businesses^[12] and contributing nearly half of the region’s GDP.^[13] However, six in 10 MSMEs face significant challenges in accessing financing.^[14] For example, many small businesses lack the formal financial records or credit histories required by traditional lenders, limiting their access to credit, and female entrepreneurs often encounter greater obstacles in obtaining funding due to gender bias in financial systems.

Standard Chartered is helping to address some of these challenges through a number of targeted initiatives. In Malaysia, it collaborates with the Credit Guarantee Corporation^[15] to offer loans tailored to SMEs. In Singapore, the Enterprise Financing Scheme provides businesses with risk-shared loans. Additionally, Standard Chartered’s Women’s International Network (SC WIN) initiative is designed to support women entrepreneurs globally. Active in seven markets, including Singapore, Malaysia, and Vietnam, the programme has already extended $300 million in financing to women-owned SMEs.^[16]

By finding solutions to these challenges, Standard Chartered is helping the region tap into the potential of underserved businesses and drive more inclusive growth.

A vision for the future

ASEAN is committed to sustaining growth and reinforcing its position as a global trade hub. By focusing on future-ready sectors such as renewable energy, advanced manufacturing, and digital transformation, it aims to drive sustainable development, strengthen supply chains and bolster global economic resilience in the coming years. To further enhance its appeal, the ASEAN Trade in Goods Agreement (ATIGA) is reducing trade barriers such as tariffs, while initiatives such as the ASEAN Infrastructure Fund^[17] are mobilising capital to fund and improve transport and other critical infrastructure across the region.

With a presence in all 10 ASEAN member markets, Standard Chartered is uniquely positioned to guide businesses through this transformation by fostering innovation, building strategic partnerships, and delivering tailored financial solutions. The bank’s deep regional footprint ensures a comprehensive understanding of the diverse opportunities and challenges across ASEAN’s vibrant economies.

Looking ahead, the bank’s commitment to sustainability, connectivity, and digital transformation will continue to enable businesses in ASEAN to unlock new markets and growth opportunities, helping them to thrive in the interconnected global economy. For businesses and investors alike, there has never been a more opportune time to connect with ASEAN.

--- Sunil Kaushal, Co-Head, Corporate and Investment Banking, Standard Chartered

Sources:

[1] Global Maritime Hub [2] Standard Chartered [3] ASEAN Investment Report 2024 [4] Standard Chartered [5] Standard Chartered [6] US Government [7] Standard Chartered [8] ASEAN Statistical Brief [9] Standard Chartered [10] Standard Chartered [11] ADB Trade & Supply Chain Finance Program [12] ASEAN [13] ASEAN [14] WEF [15] Standard Chartered [16] ASEAN [17] ASEAN Infrastructure Fund