ASEAN manufacturing not hollowed out by China

ASEAN manufacturing not hollowed out by China

ASEAN is maintaining its hold on manufacturing without being clobbered by China's lure as feared, a U.S.-based financial house reported on Saturday.

The big hollowing out of Southeast Asia's manufacturing sector was predicted by many analysts who watched as industries poured into China in the last decade.

Morgan Stanley said that manufacturing output in Singapore, Indonesia, Malaysia, Thailand and the Philippines continued to expand despite China's buildup.

Their share of manufacturing output in gross domestic product (GDP) swelled from 25 to 30 percent in the 10 years through 2003, said the report authored by Daniel Lian.

"While the rise in China's manufacturing is real, as it has taken an additional 3.1 percent of the global merchandise export pie, it has taken share away from other manufacturing exporters, not from Southeast Asia," it said.

South Korea, Mexico and Brazil, China's other major competitors, have at least held onto their shares of manufactured exports, it added.

Advanced industrialized countries "are the economies losing manufacturing shares to China", the report noted.

ASEAN, or the Association of Southeast Asian Nations, has not idly stood by as China surged ahead.

Singapore and Malaysia diversified and shifted manufacturing up the value chain, Lian noted. They have beefed up service exports along with Thailand.

Malaysia and Thailand were also lauded for building up local enterprises and second track industries in agriculture. -- dpa