There’s more to Asia-Middle East trade than oil
Southeast Asia’s global supply chain is dominated by palm oil from Malaysia and cars from Thailand, says HSBC.
10/06/2024 (Free Malaysia Today), Petaling Jaya - There is some US$47 billion (RM221.84 billion) in untapped trade between Southeast Asia and the Middle East, said HSBC, highlighting an emerging economic corridor linking some of the world’s fastest-growing regions.
In a report last week, HSBC economists stated that this would expand trade between the two regions by over a third from the US$126 billion (RM594.77 billion) registered last year, with nearly 80% of which is oil imported by the likes of Thailand, the Philippines, and Vietnam.
Southeast Asia’s integration into the global supply chains could see it ship more electronics and machinery and potentially double its US$30 billion (RM141.58 billion) in exports to the Gulf.
Currently, this trade is dominated by palm oil from Malaysia and cars from Thailand.
Meanwhile, HSBC said Gulf states could tap Southeast Asia’s huge consumer markets and boost exports by US$18 billion (RM84.95 billion) through plastics, chemicals, and metals.
“A free trade agreement would help bring down the high tariff levels between the two regional blocs,” it added.
HSBC said tourism is another key sector especially with Southeast Asia still hard-hit by the slow return of Chinese tourists.
“Even though tourists from Gulf states only accounted for 2% of total arrivals, their spending power matters,” HSBC said, citing data out of Thailand, which saw Middle East arrivals surge 50% from pre-pandemic levels.
“Middle East tourists not only tend to stay for twice as long as the average tourist but they also spend 30% more,” the report said.