ASEAN Urged to Foster Regional Giants and Deepen Integration at 2025 Conference

Southeast Asia stands at a crossroads, with global trade tensions and supply chain shifts prompting calls for the region to cultivate its own industrial champions and strengthen intra-regional ties, according to panellists at the ASEAN Conference 2025. The event, held on July 3 at the Resorts World Convention Centre, saw regional leaders and industry figures advocate for a unified, ASEAN-led economic strategy to navigate a multipolar world.

Shifting from Foreign Reliance to Regional Strength

Malaysia’s Deputy Minister of Investment, Trade and Industry, Liew Chin Tong, emphasized the need for ASEAN to move beyond its traditional reliance on foreign direct investment (FDI) and export-led growth. “Do we still rely on a foreign direct investment-driven economic model or an export-led industrialisation model where we export to the US – or do we start thinking about growing ASEAN companies?” Liew asked during a ministerial dialogue titled “ASEAN Integration in the Multipolar World”. He argued that fostering regional industrial giants and developing home-grown technologies would bolster intra-ASEAN cooperation, making integration and trade more seamless as member states collaborate closely.

Liew’s vision aligns with broader sentiments at the conference, organized by the Singapore Business Federation (SBF) alongside United Overseas Bank (UOB), RSM Singapore, and Rajah & Tann. The dialogue, moderated by SBF chief executive Kok Ping Soon, included Singapore’s Deputy Prime Minister and Minister for Trade and Industry, Gan Kim Yong, and Indonesia’s Deputy Minister for Investment Cooperation, Tirta Nugraha Mursitama. The panellists explored how ASEAN’s 10 member states—Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam—can deliver on the bloc’s integration mandate amid global uncertainties.

ASEAN-Led Development as a Strategic Goal

Indonesia’s Tirta Nugraha Mursitama proposed a forward-looking approach, advocating for “ASEAN-led development” over state-centric models. “My optimistic way of thinking is that if we are internally strong as ASEAN… we can create the idea of not state-led development but ASEAN-led development” he said. Tirta stressed the importance of enhanced communication between governments and businesses to achieve this vision, highlighting the need for a cohesive regional framework to address challenges like geopolitical tensions and trade disruptions.

The call for regional unity comes at a time when ASEAN faces external pressures, including tariff wars and shifting global supply chains. SBF chairman Teo Siong Seng, also executive chairman of Pacific International Lines, noted that many businesses had initially adopted a “wait-and-see” approach, assuming tariffs were a temporary tactic. “It has become clear that action must be taken,” Teo said, underscoring the importance of a collective ASEAN response to maintain economic resilience.

Navigating Bilateral and Regional Dynamics

The discussion also touched on recent US trade policies, including a reported 20% levy on Vietnam, which raised concerns about a potential “divide-and-conquer” strategy by the world’s largest economy. Kok Ping Soon questioned whether such moves undermine ASEAN centrality, the principle that the bloc should lead its own regional agenda. Singapore’s Gan Kim Yong acknowledged that tariffs are negotiated bilaterally but emphasized ASEAN’s commitment to intra-bloc agreements. “Even while we negotiate with the US separately and bilaterally, at the same time, at the back of our minds, we remain committed to ASEAN cooperation and integration,” Gan said.

Gan’s remarks reflect ASEAN’s delicate balancing act: pursuing individual trade deals while upholding regional solidarity. The bloc’s economic integration efforts, such as the ASEAN Free Trade Area and the Regional Comprehensive Economic Partnership, aim to reduce trade barriers and enhance connectivity. However, challenges like regulatory disparities and uneven development levels among member states remain, as noted in a Reuters report on ASEAN’s strategic plan.

UOB’s Role in Regional Cooperation

The conference also marked significant steps toward deepening regional ties through business partnerships. UOB, a key player in ASEAN’s financial sector, signed five memorandums of understanding (MOUs) with government agencies and industry bodies across ASEAN and China. These agreements aim to foster cross-border growth and sustainable development. A notable MOU between UOB, the Federation of Malaysian Manufacturers, and the Singapore Manufacturing Federation targets opportunities within the Malaysia-Singapore manufacturing corridor, particularly in the Johor-Singapore Special Economic Zone.

Other MOUs include partnerships with Enterprise Singapore to support local enterprises expanding regionally, the Hong Kong Trade Development Council to strengthen ties, and China’s ZGC International to enhance financial services for cross-border development. A fifth agreement with J-Will Corporation and Hildrics Capital focuses on aiding Japanese companies entering ASEAN markets. UOB’s deputy chairman and CEO, Wee Ee Cheong, highlighted the region’s attractiveness despite global tensions, noting that “trade flows within ASEAN and between China and ASEAN are expected to increase” as supply chains rewire.

Digital and Sustainable Opportunities

Wee also pointed to the region’s rapidly growing digital economy and sustainability initiatives as key opportunities. “Artificial intelligence and environmental, social and governance factors are now central to government and business trends,” he said, urging small and medium-sized enterprises (SMEs) to adapt their business models to remain competitive. The ASEAN Digital Economy Framework Agreement, currently under negotiation, aims to harmonize digital trade rules and unlock a projected $2 trillion digital economy by 2030.

Malaysia’s launch of the ASEAN Simplified ESG Disclosure Guide for SMEs, announced at the conference, is a practical step toward helping small businesses adopt sustainable practices. This initiative addresses the challenges SMEs face in meeting global sustainability standards, particularly for smaller firms with limited resources.

Challenges and the Path Ahead

Despite optimism, ASEAN’s path to deeper integration faces hurdles. Economic disparities among member states, coupled with external pressures like US tariffs and China’s export surge, pose risks to regional cohesion. For instance, Thailand’s manufacturing sector, which accounts for 25% of its GDP, has seen factory closures due to Chinese overcapacity, with similar concerns emerging in Indonesia and Singapore.

ASEAN’s response will require balancing national interests with regional goals. Initiatives like the Regional Investment Promotion Action Plan 2025-2030, unveiled in October 2024, aim to attract sustainable FDI and position ASEAN as a unified investment destination. Yet, as Tricia Yeoh, Associate Professor at the University of Nottingham Malaysia, noted, “ASEAN needs to demonstrate efficacy in order for it to remain relevant”.

As ASEAN navigates these complexities, the push for regional industrial champions and deeper integration offers a bold vision. Whether the bloc can translate this ambition into action will shape its role in a rapidly changing global economy.