ASEAN positioned as strategic hub for FDI amid global supply chain shifts: UOB

Speaking at UOB's annual "Gateway to ASEAN" conference in Singapore on Oct. 16, Frederick Chin outlined four key forces reshaping global supply chains today.

He noted that the reconfiguration of global supply chains, driven by increasing geopolitical tension, post-pandemic realignment as firms rethinks cost structure and resilience, U.S.-China trade tensions, and evolving consumer expectations which growing demand for speed, is accelerating nearshoring strategies. These strategies aim to enhance supply security, minimize dependence on a single market, and boost flexibility to comply with evolving regulatory requirements.

"Balancing security, reliability, and speed with cost is difficult. Things will get more expensive in the medium term, but over time, diversification and scale can help achieve all three objectives," Frederick Chin said.

Frederick Chin, Head of Group Wholesale Banking and Global Markets at UOB, speaking at the bank's annual "Gateway to ASEAN" conference in Singapore on Oct. 16, 2025. Photo courtesy of UOB

The shifting dynamics have already translated into capital flows. Inbound foreign direct investment into ASEAN reached $225 billion in 2024, and UOB projects this figure to rise to $370 billion by 2030. Over the past five years, UOB has assisted 5,000 companies in attracting over SGD50 billion ($38.6 billion) in investments to the region, resulting in the creation of almost 300,000 jobs.

Beyond manufacturing, Frederick Chin identified three structural growth areas that will attract foreign direct investment. First, the mining and industrial sectors across the supply chain, as illustrated by upstream investments from Chinese companies into Indonesia's nickel industry, expected to generate export values of over $30 billion.

Second, the digital economy is poised for transformation. The rise of AI and the development of data centers are set to redefine productivity and growth strategies. "AI will be a game changer," he remarked, pointing to the rapid build-out of regional digital infrastructure to meet computing demand.

Third, the energy transition presents an opportunity for ASEAN's abundant renewable resources, such as hydro, geothermal, and solar, to support Singapore's $60 billion renewable energy goals and facilitate the development of a future ASEAN power grid.

Frederick Chin (R) and Heng Koon How during the conference on Thursday. Photo courtesy of UOB

On the evolving ASEAN–China relationship, Frederick Chin noted that Chinese companies are increasingly relocating production to ASEAN countries to diversify their operations and access markets through free trade agreements. He cited sectors such as electric vehicles, steel, and textiles as areas where complementary partnerships can create win-win outcomes. Thailand, for instance, has benefited from becoming an EV manufacturing hub, with Chinese carmakers like BYD establishing significant capacity.

"My advice is for businesses to find complementary partners, bringing the best of China to ASEAN's markets and distribution networks," he said, noting that Chinese firms bring scale and cost advantages, while ASEAN markets offer access, resources, and increasingly sophisticated consumers.

Frederick Chin also highlighted policy priorities needed to unlock ASEAN's full potential. Intra-ASEAN trade currently accounts for less than 30% of ASEAN's total trade, held back by non-tariff barriers, regulatory inconsistencies, and varying digital standards. He called for governments to accelerate initiatives such as upgrading the ASEAN Trade in Goods Agreement to boost intra-regional flows, advancing the Digital Economic Framework Agreement to tap into a $2 trillion digital market opportunity by 2030, and realizing cross-border renewable energy cooperation.

"Government has to play a pivotal role in policy setting to help businesses realize ASEAN's potential," he stressed, adding that stronger coordination could help the region function as a more cohesive economic unit.

Looking ahead, UOB's leader believes ASEAN could eventually emulate Europe's integrated production model if it acts as a united economic bloc. "It's possible if ASEAN can be united as one economic block, creating national champions for global markets," he said, citing successful digital players like Grab and Shopee as examples of the region's global ambitions.

Frederick Chin also reaffirmed UOB's long-term commitment to supporting businesses that are tapping into ASEAN's growth opportunities.

"As companies expand across borders, they need trusted partners who offer both connectivity and deep regional insight. With our strong track record, we're confident in our role as the right partner to help clients unlock the region's full potential," he said, underscoring the Bank's commitment as it celebrates its 90th anniversary this year.