By Phar Kim Beng & CW Sim

Western analysts often paint a pessimistic picture of ASEAN’s economic trajectory. Henny Sender’s recent article, “ASEAN’s Tiger Economies Have Lost Their Roar,” is a prime example – arguing that China’s manufacturing dominance, global supply chain realignment, and high US interest rates have eroded ASEAN’s competitiveness.

However, this perspective grossly underestimates ASEAN’s economic resilience and, more importantly, ignores Malaysia’s pivotal role in reshaping global supply chains. If ASEAN is adjusting its course in the global economy, Malaysia is in the captain’s seat – positioning the region for a new era of economic influence.

ASEAN is not “Losing Its Roar” – It is Strategically Recalibrating

ASEAN is not a passive observer in global economic shifts. As the 2025 ASEAN Chair, Malaysia has the unique opportunity to redefine regional economic leadership and global positioning.

1. ASEAN’s Supply Chain Evolution: An Upgrade, Not a Replacement

• Global giants – including Apple, Samsung, BYD, CATL and Foxconn – are expanding their ASEAN footprint, not because China is failing, but because ASEAN has become the biggest winner of the “China+1” strategy.

• Malaysia’s semiconductor industry is a linchpin of the global supply chain. ASEAN’s regional division of labour is already well-defined:

• Thailand leads in automotive manufacturing.

• Vietnam is a key electronics assembly hub.

• Indonesia dominates nickel and battery supply chains.

• Malaysia is the regional high-tech manufacturing and semiconductor leader.

• In 2023 alone, ASEAN attracted over US$150 billion in foreign direct investment (FDI) – outpacing India, Latin America and Africa.

2. ASEAN Is Not Under Pressure from China – China Is Becoming More Dependent on ASEAN

• Henny Sender claims ASEAN is struggling under China’s competition. The reality is the opposite – China is increasingly reliant on ASEAN markets.

• In 2024, Chinese investment in ASEAN surged over 30 per cent, particularly in EV production, battery technology and digital finance. Companies like BYD and NIO are setting up production hubs in ASEAN, confirming the region’s status as a new global manufacturing destination.

• China’s trade dependence on ASEAN has reached an all-time high of 24 per cent (2024), surpassing its reliance on the United States, Japan and the EU.

3. ASEAN’s Economic Challenges Have Solutions Already in Motion

• Thailand’s auto sector may be experiencing short-term headwinds, but Malaysia is already positioning itself as ASEAN’s EV (electric vehicle) supply chain leader. The Johor-Singapore Special Economic Zone (JS-SEZ) and Malaysia-Singapore Joint Technology Park are attracting high-end manufacturing investments.

• Indonesia’s growth may have slowed, but its nickel reserves are critical to the global EV battery market, making it indispensable in the clean energy transition.

• ASEAN’s financial integration is accelerating. The upcoming ASEAN Digital Payments Interconnectivity Initiative (2025) will revolutionise cross-border transactions, strengthening regional trade dynamics.

Malaysia’s Role in ASEAN’s Economic Renaissance: Anwar’s Three-Pillar Strategy

As the 2025 ASEAN Chair, Malaysia must not only lead ASEAN’s collective economic revival but also secure its position as the driving force behind it. Here are three strategic imperatives for Prime Minister Datuk Seri Anwar Ibrahim’s administration:

1. Johor-Singapore Special Economic Zone (JS-SEZ): ASEAN’s “Shenzhen-Hong Kong” Model

• Malaysia and Singapore must deepen industrial integration, with JS-SEZ serving as the primary hub for global investment.

• Target: Attract at least US$20 billion in new manufacturing investments by 2026, creating ASEAN’s largest cross-border industrial supply chain.

2. ASEAN-GCC Energy Investment Fund: Mobilising Middle Eastern Capital into ASEAN’s Economy

• At the 2025 ASEAN Summit, Malaysia should champion the creation of an “ASEAN-GCC Energy Investment Fund” to channel Saudi and UAE capital into ASEAN’s renewable energy, infrastructure and industrial sectors.

• Target: Secure at least US$50 billion in Middle Eastern investments into ASEAN markets by 2026.

3. ASEAN Semiconductor Supply Chain Alliance: Strengthening ASEAN’s Position in the Global Chip Industry

• Malaysia must lead ASEAN’s semiconductor supply chain development, working alongside Thailand, Vietnam and Indonesia to reduce dependence on the United States and China.

• Target: Establish an ASEAN Semiconductor Cooperation Agreement at the 2025 ASEAN Summit and develop a regional chip manufacturing hub by 2027.

Conclusion: ASEAN’s Future Is Malaysia’s Opportunity

Henny Sender’s article reflects a classic Western “pessimism bias” – focusing on ASEAN’s challenges while ignoring the region’s ability to capitalise on supply chain shifts and industrial transformation.

The reality is that ASEAN’s economy is not “losing its roar”. It is evolving into a more precise, high-value and sustainable growth model. As ASEAN’s 2025 Chair, Malaysia is uniquely positioned to lead this transformation.

Malaysia must be ASEAN’s economic leader – not a follower. This is not just about national interests; it is about how Anwar Ibrahim’s administration can demonstrate economic leadership ahead of the 2026 General Election.

In 2025, the world will be watching ASEAN. And ASEAN’s direction will be determined by Malaysia’s leadership.

-- BERNAMA

Phar Kim Beng is Professor of ASEAN Studies at the International Islamic University of Malaysia (IIUM).

CW SIM is an independent consultant.