Just as China’s economy begins to slow Australia may be about to benefit from the rise of a new Asian economic superpower – the Association of Southeast Asian Nations, or ASEAN for short.
That’s the view of ANZ’s economics team who, in a note released earlier this afternoon, believe the economic and political bloc has the potential to “emerge as the third pillar of Asian growth alongside China and India”.
Consisting of Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Cambodia, Laos, Myanmar and Vietnam the 10-nation association – already the size as the UK economy – “has the potential to become one of the world’s key manufacturing hubs and an emerging source of consumption for the world” according to ANZ.
Indeed, some of the projections the bank make suggest the bloc could be the next economic superpower.
They forecast that by 2030 650 million people will call the region home. Over 50%, more than 350 million people (more than the entire United States) will still be aged 30 or under.
That’s some staggering numbers which, if ANZ are correct, see the bloc replace China as the “world’s factory” over the next 10 to 15 years on the back of favourable demographics, comparative lower wages, productivity improvements and geographic location.
The implications of such as transition will be felt around the world.
Capital will flow in, infrastructure built, industries expand and, as was the case when China replaced the US, Europe and Japan as the “world’s factory”, see living standards of hundreds of millions of people improve.
As highlighted in red in the table below, within the next five years, the number of middle class population in the 10-nation bloc is projected to swell to 227 million – about double the population of Japan.
That’s an exciting prospect that will open up raft of opportunities for many developed nations, especially in Asia.
So, while there has been plenty of negative articles written about the slowdown in China’s economy just remember this. The next economic superpower is already readying to take it’s place.