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Connection seen as key to sustained trade growth

By YANG HAN in Hong Kong | China Daily | Updated: 2025-12-30 09:55
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A container vessel leaves Yangpu Port, Hainan province, for Vietnam. [Photo by WU MAOHUI/XINHUA]

Trade within Asia is expected to remain on an upward trend in 2026, with regional cooperation essential to enhancing resilience, experts say.

"The trend (in intraregional trade) will continue because we want to build more supply chain networks in Asia," said Park Chonghoon, Standard Chartered's head of research in South Korea.

He said economies in Asia should be more integrated in not only imports and exports but also consumption of end products to expand markets amid trade barriers created by the United States.

Global trade in goods and services is expected to exceed $35 trillion for the first time this year, up by about $2.2 trillion or a year-on-year increase of some 7 percent, according to a United Nations Trade and Development report in early December.

East Asia exports saw the strongest growth over the past four quarters at 9 percent, with intraregional trade growing by 10 percent, the report said.

While slowing goods trade reduces demand for transport and logistics, Asia's trade in commercial services is expected to grow 5.5 percent year-on-year in 2026, compared with 4.6 percent this year, said ING Think, the research division of Dutch bank ING.

Asian countries should gradually reduce dependence on the US and work toward creating a regional free trade zone, said Hidetoshi Tashiro, chief economist of Japan's Infinity LLC and CEO of Terra Nexus Project Management Services.

While US manufacturing is in decline and exports are increasingly constrained, Tashiro said East Asia's manufacturing sector continues to underpin the US economy.

"Facing likely US interference, the region must first reject outside pressure conceptually, while deepening economic ties to build a trust-based system capable of withstanding external meddling," said Tashiro.

Efforts to boost intraregional economic and trade cooperation can be found across Asia, such as among members of the Association of Southeast Asian Nations.

Countries in Central Asia also agreed in November to nearly double mutual trade within the area to $20 billion, according to The Times of Central Asia.

Echoing Tashiro's view, Suriyan Vichitlekarn, executive director of the Mekong Institute, said the intensification of global conflicts further highlights the importance of enhancing interdependence and cooperation among neighboring countries.

"We must recognize that relying on each other is essential for stability," said Suriyan, whose institute is an intergovernmental organization represented by all six Greater Mekong Subregion countries, namely Cambodia, China, Laos, Myanmar, Thailand, and Vietnam.

He also hopes that once the border demarcation between Thailand and Cambodia is properly addressed, the two nations can collaborate to build regional resilience, contributing to economic stability and the improvement of livelihoods.

Due to the border conflict, Thailand faces losing the Cambodian export market, which accounted for about 3 percent of total goods exports prior to tensions escalating in the summer, according to Oxford Economics. In October, deliveries to Cambodia plummeted by 66 percent, leaving a 2.5 percentage point drag on total goods export growth, the advisory firm said in a report on Dec 11.

Amitendu Palit, a senior research fellow at the Institute of South Asian Studies in Singapore, said economic architectures such as the Regional Comprehensive Economic Partnership, the largest trade deal on the planet, have been performing well.

"Perhaps we will soon see that Asian economic integration might become more issue-based," he said, adding that he expects to see regional economies collaborating more on issues such as climate change, digital trade, and connectivity.

Hou Junjie in Tokyo, Prime Sarmiento in Hong Kong, and Yang Wanli in Bangkok contributed to this story.

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