10/5/2015

GrowthhubsemergeinASEAN[2]ChinaDailyAsia

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Home>AsiaWeekly
Friday,September25,2015,15:10

GrowthhubsemergeinASEAN
ByRAJIVBISWAS

Textileindustrialhubs
TheChinaASEANFreeTradeAgreementthatwasimplementedin2010hasacceleratedthe
growthofbilateraltradeandinvestmentflowsbetweenASEANandChina,withtheregional
blocstextiles,clothingandfootwearsectorbeingamajorbeneficiary.
ThetextilesandfootwearindustryhasbeenakeydriverofCambodiaseconomic
developmentinthelastdecade.Totalexportsoftheseproductshavegrownfrom$27million
in1995to$5.8billionin2014,andareestimatedtoaccountfor600,000jobsinthecountrys
economy.
Industryexportsrose10.6percentyearonyearinthefirstquarterof2015,andareexpected
tobeanimportantlongtermgrowthenginefortheCambodianeconomy,whichwillbenefit
fromthefastgrowingChineseconsumermarket.
TheVietnamesetextilesindustryhasalsobeenexperiencingrapidgrowth,withtotalexportsof
garmentsandtextilesreaching$24.5billionin2014,up19percentonthepreviousyear.The
newEuropeanUnionVietnamFreeTradeAgreementagreedinprincipleinAugustwillprovide
afurtherboosttoVietnamesegarmentsexportstotheEU,whichisalreadyakeymarketfor
Vietnamesegarments.
TheTransPacificPartnershiptradeagreement,ifconcluded,willbeanothermajorboostfor
Vietnamsgarmentssector,asitwillprovidedutyfreeaccessforVietnamintotheUSmarket.
ITBPOindustry

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ASEANsinformationtechnologyandbusinessprocessoutsourcing(BPO)industryhasalso
becomeoneoftheregionsfastgrowingsectors,withMalaysiaandthePhilippinesamongthe
leadingglobalhubsfortheITBPOindustry.
ThecompetitivenessofMalaysiaandthePhilippinesinthisindustryhasbeenparticularly
helpedbythelargepoolofuniversityeducatedworkersaswellasthestrongEnglishlanguage
skillsoftheworkforceinbothcountries.

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InthePhilippines,theindustrysexportrevenuehasmorethandoubledbetween2008and
2014,reachinganestimated$18billionby2014,whileitstotalnumberofemployees
exceeded1million.
By2016,theindustryinthePhilippinesisprojectedtohave1.3millionemployees.Therapid
growthofthisindustryisalsodrivingeconomicdevelopmentinanumberofcitiesacrossthe
Philippines,withManilaandCebunowrankedamongtheworldsleadingITBPOhubs.
InMalaysia,theindustryhasalsopostedfastgrowth,withmajorhubshavingdevelopedin
KualaLumpurandPenang.AnewITBPOParkbeingbuiltinPenangisexpectedtocreate
around21,000newjobsby2020.
ASEANhasbecomeoneoftheworldsfastestgrowingeconomicregions,drivenbyarangeof
factors,includingitslargedomesticconsumerpopulationof600million,dynamiceconomic
reformsandtradeliberalizationtoboostcompetitiveness,andclosetradeandinvestmentties
withAsiaslargesteconomy,China.
WithChinahavingemergedasanuppermiddleincomeeconomywithafastgrowing
consumermarket,ASEANsindustrialhubsinawiderangeofindustries,includingautos,
electronicsandtextiles,arepoisedtoexperiencerapidgrowthinexportstotheChinese
market.
IntraASEANtradewillalsogrowrapidly,helpedbytradeliberalizationandeconomic
integrationastheASEANEconomicCommunityagreementisimplemented.Atatimewhen
manyemergingmarketsworldwidearestruggling,thelongtermgrowthandtradeprospects

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10/5/2015

GrowthhubsemergeinASEAN[2]ChinaDailyAsia

forASEANstilllookverybright.
TheauthoristheAsiaPacificChiefEconomistofIHSandthewriterofFutureAsia.

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