The creation of the ASEAN Economic Community (AEC) on December 31 is a milestone event in the history of the Association of Southeast Asian Nations. It opens the door to huge opportunities in regional economies with a combined population of more than 620 million people and a GDP worth US$2.6 trillion.
Paul Skelton, HSBC’s Regional Head of Commercial Banking for Asia-Pacific, comments on what this step means for international businesses both within and outside ASEAN:
“The AEC will further liberalise the flow of goods, services, capital and skilled labour within one of the world’s most dynamic regions. It will open the door to significant new investment opportunities to enhance ASEAN’s already flexible and diverse supply chains.
“Foreign direct investment has poured into ASEAN in anticipation of this new reality, with a world-beating US$136 billion committed in 2014 alone. That speaks to the opportunities businesses see in the potential of the AEC to provide a gateway to growth in the face of stiff economic headwinds around the world.
“The AEC will help make ASEAN an increasingly attractive production base for internationally-oriented businesses wanting to tap into one of the world’s fast-growing middle class consumer markets, as well as being well-positioned to offer routes into neighbouring China and India.
“The formation of the AEC aims to sweep away internal barriers to doing business for companies already inside ASEAN and for those thinking about where to establish a base. International businesses would be wise to develop a strategy to benefit from the evolving ASEAN region and the ongoing policies and projects that the AEC will drive in the years ahead.”
