Kuala lumpur: ASEAN's significant dependency on exports, especially in Malaysia and Singapore, presents challenges as China's economic slowdown begins to impact regional growth prospects, said an economist.
According to BERNAMA News Agency, KSI Research and Advisory Services senior economic adviser Dr. Anthony Dass emphasized that ASEAN's close ties to China make the region vulnerable to economic shifts. "We must recognise that ASEAN's fortunes are closely linked to China, particularly at a time when the Chinese economy is slowing," he stated during the ASEAN CFO Sustainability Leadership Summit's 'Special Presentation: The Economic and Investment Outlook - What CFOs Should Look Out For?' held today.
Dass, who is also Kuala Lumpur Economic Club advisory council research director, highlighted that while China's economy may slow to between two and three percent in the coming years, Malaysia could still achieve growth of around four to five percent, supported by domestic resilience. However, he warned that an over-reliance on headline gross domestic product (GDP) figures, often driven by large infrastructure projects, may not accurately reflect broad-based economic strength.
He further stressed that ASEAN must actively explore alternatives beyond China. Trade integration initiatives such as the Regional Comprehensive Economic Partnership (RCEP) could be beneficial, but diversification remains crucial. Dass pointed out structural imbalances in global trade, including excess production capacity and subsidized labor, which are distorting competition and making it difficult for ASEAN companies to compete on prices.
"These are real challenges. We should not be overly dependent on one particular country. You should always be diversifying," Dass advised. He cautioned against relying on a single growth engine, noting that while India is emerging as a key driver much like China in the early 2000s, it should not be the sole focus. Dass suggested that ASEAN should diversify across multiple markets, with Indonesia and other rising economies also presenting strong opportunities.