The Association of Southeast Asian Nations (ASEAN) is regaining its economic clout to the extent that it is now time for Japanese corporations to think about the group's 10 members not only as huge markets for their products but also as production bases.
A number of factors have contributed to the recent rise of ASEAN in the regional and global economic arenas: its geopolitical advantage of being adjacent to two economic behemoths (China to the north and India to the west), benefits accruing from a series of free trade agreements it has concluded with a number of trading partners since the 1990s, a combined population of 600 million whose personal consumption is on the rise, and a slowdown of the Chinese economy, which has suffered from the rising value of the renminbi currency and steep increases in labor costs.
The Asian Development Bank surprised economists and market observers alike when it predicted in July that ASEAN as a whole would achieve a robust economic growth of 6.7 percent this year, up 1.6 percentage points from the previous forecast in April. This is a remarkable figure by today's global standards, and not far behind the 9.6 percent and 8.2 percent expected of China and India, respectively.