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Asia’s untapped manufacturing export potential to China’s Belt and Road highest globally
Asia still has $131b in untapped manufacturing export potential by 2027.
Developing Asian nations have $354b in manufacturing export potential to China’s Belt and Road Initiative (BRI) and nearly half of which is still unrealised, according to a study by the International Trade Centre (ITC).
A recent report showed overall exports from the region’s developing nations to China’s massive infrastructure development program amounted to $541b between 2018 and 2022, accounting for 68% of all the $798b exported goods to BRI from across the world during the same period.
In the years to come, ITC estimated the world’s exports to China’s BRI could increase further by as much as $318b by 2027, majority of which still lies in developing Asia where the unrealised export potential is as high as $206b.
Asia's manufacturing sector is poised to benefit the most, particularly the manufacturing powerhouses in East and Southeast Asia. Of the estimated $354b in manufacturing export potential, 11% or $41b remains untapped due to existing trade frictions between economies.
The remaining $131b or 37% of the total accounts for the projected exports growth by 2027, and $112b of which lies in East and Southeast Asia. By geography, the highest manufacturing export potential is seen in Vietnam estimated at $54b and the lowest is in Timor-Leste at $519,000.
ITC sees the highest export growth in electronic equipment, particularly in Vietnam, Malaysia and the Philippines. There are also untapped opportunities in the manufacture of machinery, electricity, plastics, rubber, as well as chemicals and optical products.
“To capitalize on the export potential of the more value-added sectors, targeted policies promoting sustainable and inclusive export growth are essential,” ITC said.
Globally, Asia is estimated to have the highest potential in boosting exports of manufactured goods to China’s BRI, followed by Africa whose manufacturing export potential is seen at $34b by 2027, Europe ($23b), the Americas ($22b) and the Pacific ($2b).
Realising the untapped potential could boost their total exports to China by 7.5% for Asia, by 7.3% for the Pacific, by 3.3% for Africa, and more than a quarter each for the Americas and Europe, according to the study.
