New growth opportunities for NZ Agri as ASEAN becomes Asia’s third engine of growth
- Opportunity for NZ exporters to diversify from China, Australia -
A resurgent ASEAN will provide a significant opportunity for New Zealand exporters to diversify and reduce their reliance on the China and Australian markets over the next decade, according to ANZ Bank NZ.
A new ANZ Research report finds that greater economic integration could see ASEAN replace China as the world’s leading manufacturing centre over the next 10 – 15 years and emerge as a key market for New Zealand food and agriculture products with the potential for NZ-ASEAN trade and investment to increase from US$13 billion last year to US$22–US$27billion by 2025.
“ASEAN: The Next Horizon,” released today, highlights the region’s enormous potential driven by closer economic integration, demographics, low labour costs and its strategic position at the intersection of global trade and shipping routes.
Report Key Points
• ASEAN is
on track to become Asia’s third engine of growth alongside
China and India and will be the fifth largest economy in the
world by 2020.
• Greater ASEAN integration and the creation of the ASEAN Economic Community could spur annual regional GDP growth of 6-8%.
• Over the same period, annual intra-regional trade could reach US$1 trillion and G4 (US, Europe, Japan and China) trade of US$3.7 trillion.
• Foreign direct investment (FDI) into ASEAN from the G4 will continue to grow strongly to around US$106 billion as companies look to expand production bases in the region.
• Three ASEAN sub-regions to evolve:
• Myanmar, Cambodia, Laos providing a large youthful labour force for new production platforms.
• Thailand, Vietnam, Indonesia and the Philippines competing as the most cost effective mid-value manufacturing centres.
• Singapore, Malaysia will develop as dominant finance, technology and design hubs.
Graham Turley, ANZ NZ Managing Director Commercial & Agri, said New Zealand exporters were conscious of the risks of heavy reliance on a small number of large export markets.
“With its accelerating urbanization, rising incomes and consumption, ASEAN will be a market of considerable scale and will provide New Zealand exporters with an alternative to their two main export markets of China and Australia,” Mr Turley said.