API 2020 Briefing Paper No. 01 – Post-COVID Supply Chain Reconfigurations: Convergence or Divergence in ASEAN Economic Integration?

The Covid-19 pandemic has exposed a systemic risk within the complex web of global value chains. Factory closures and human movement restrictions in one country will have an impact on another. Many multinational corporations are now considering adopting the China Plus One strategy, diversifying their supply chains out of China to protect against future shocks. The ASEAN region appears to be on the receiving end of these relocations.

But, with the various economies each vying for scarce investment, will ASEAN member states see each other as partners or rivals? This briefing paper considers the divergent trends in regional economic integration in the various ASEAN member states, to understand how these relocations might impact regional economic integration. It argues for domestic policy convergence, with ASEAN-wide cooperation as key to long-term recovery.

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