Commercial tensions with the United States have contributed to an increase in intraregional trade. The proportion of Chinese exports destined for the U.S. has been declining, initiating a diversification trend in 2018, while Asian partners are gaining more significance, the document states.
The IMF indicates that this phenomenon largely “reflects a reorientation of intermediate goods exports to ASEAN [Association of Southeast Asian Nations] countries for further processing.”
Data from China’s General Administration of Customs points to a year-on-year increase of 14.7% in Chinese exports to the region in September.
In the same report, the IMF estimates a combined growth of 4.3% for ASEAN economies in 2025, three-tenths above the April forecast, driven by reduced customs duties, higher external demand, and more favorable financial conditions.
Among Southeast Asia’s major economies, the Fund predicts growth of 4.9% for Indonesia, 6.5% for Vietnam, 5.4% for the Philippines, 2.2% for Singapore, and 2% for Thailand.
With export-oriented economies, countries in the region face U.S. tariffs ranging from 10% on Singapore to 40% on Cambodia, a country with strong trade ties to China.
Some ASEAN members, such as Vietnam and Indonesia, have already signed trade agreements with Washington. Others, like Malaysia, remain in negotiations, potentially striking a deal on the sidelines of the ASEAN summit and partners, which Kuala Lumpur hosts from October 26 to 28, expected to feature U.S. President Donald Trump.
The IMF also highlights ASEAN’s “relative integration” and “trade openness,” along with the dynamism of foreign direct investment and announcements of new projects in the region, which “suggest that companies continue to seek diversification of their supply chains.”
