ASEAN urged to shift from Chinese rerouting hub to value creation

September 23, 2026 at 02:54 PM2 min

This digest was compiled by AI from multiple sources — links to the originals are below.

ASEAN faces a strategic dilemma between deepening production dependence on China and preserving access to US markets. The Diplomat proposes a 'Made in ASEAN 2.0' framework to transform the region into a high value-added hub. Japan is positioned as a key partner for co-creation in next-generation industries.

Key Facts

China's BRI infrastructure investments and manufacturing expansion reinforce ASEAN's role in global supply chains.
The United States has distanced itself from the GATT and WTO free trade order and imposed unilateral high tariffs.
The proposed 'Made in ASEAN 2.0' aims to cover R&D, design, components, materials, production, certification, and services.
Japan's expertise is to be applied to EVs, semiconductors, digital solutions, AI, green transformation, and critical minerals.

Strategic Dilemma

ASEAN's growth model depends heavily on China for key components and intermediate goods. This dependence raises American suspicions that ASEAN serves as a hub for rerouting Chinese goods to third-country markets. If the model hardens into simple assembly of Chinese-origin inputs, it will limit added value and economic impact within the region. The United States, long seen as a counterweight to China, is no longer an unconditionally reliable partner. Washington has distanced itself from the GATT and WTO free trade order that underpinned ASEAN's growth.

Made in ASEAN 2.0

The Diplomat proposes shifting ASEAN from conventional assembly and export to a high value-added 'value creation hub'. The framework covers research and development, design, components and materials, production, certification, and services. The key is not to exclude China but to promote substantial processing and accumulation of technology and knowledge within ASEAN. The 'Made in ASEAN 2.0' label signals to global markets that products are not Chinese goods merely rerouted through ASEAN.

Japan Co-Creation

Japan and ASEAN can pursue 'co-creation' beyond conventional support for industrialization. The aim is to advance ASEAN jointly into a production region that generates distinctive value for global markets. Japanese companies have accumulated expertise in human resource development, local supplier formation, production management, and technology transfer. This expertise is to be applied to next-generation industries such as EVs, semiconductors, digital solutions, AI, green transformation, and critical minerals.