China Becomes Main Supply Hub in ASEAN+3 Production Network

Singapore (ANTARA) - China has become the primary hub in the production network of the ASEAN+3 region, comprising ASEAN member countries plus China, Japan, and South Korea, according to a statement from the ASEAN+3 Macroeconomic Research Office (AMRO), based in Singapore, on Monday (6/4).

In its report titled “ASEAN+3 Regional Economic Outlook 2026”, the research institution noted that a fundamental structural shift has occurred over the past two decades, supporting the region’s resilience.

“On the supply side, the regional production network has evolved from being centred on Japan to a denser and more interconnected architecture with China as its pillar,” the report explained.

This is supported by manufacturing capacity, logistics infrastructure, and China’s continuously growing central position in the trade of intermediate goods, the report added.

“These supply relationships reflect positions of mutual interdependence, rather than one-way dependency,” the report stated.

On the demand side, ASEAN+3 has also emerged as a primary source of global final demand, collectively larger than the United States (US), with intra-regional demand now far more significant than two decades ago.

These relationships are also bidirectional: within ASEAN+3, China is the dominant demand centre, while other economies serve as the primary sources of final demand for China’s exports, the report explained.

At the same time, foreign direct investment (FDI) also strengthens these ties, with rising intra-regional FDI complementing trade and production relationships, the report continued.

In a press conference on Monday, AMRO’s Chief Economist He Dong told reporters that for supply chains to be resilient, it is important for the involved economies to increase domestic value-added content, meaning greater positive spillovers from FDI into the domestic economy.

Companies in ASEAN can benefit by enhancing local capacity.

By increasing domestic value added, regional companies gain more opportunities and supply chains become more resilient to external shocks, He said.