Supply chain diversification and technology poised to be the key enablers of trade growth in Asia
22 Jan 20254 min read
Summary
- A growing number of APAC businesses are building parallel and dual supply chains to manage geopolitical risks and maintain continuity amid trade fragmentation. According to new research by Economist Impact and DP World, 33% of firms are diversifying production to avoid disruption, while 29% are creating dual networks to serve both the US and Chinese markets.
- Regional trade agreements such as CPTPP and RCEP are accelerating supply chain reconfiguration by offering tariff reductions and cost advantages. 38% of APAC leaders report new opportunities from these frameworks, while nearly a quarter are enhancing local sourcing to strengthen regional supply resilience and reduce external dependencies.
- Companies are also investing in automation and AI to address labour shortages and drive efficiency, with more than a third reporting cost reductions and productivity gains. Supported by government-led digital initiatives, APAC businesses are positioning technology and diversification as twin pillars for growth and stability in a volatile global trade environment.
SINGAPORE, 21 January 2025: 33% of businesses based in the Asia Pacific (APAC) region are creating parallel supply chains to avoid disruptions caused by geopolitical risks, while 29% are creating dual supply chains to cater for the Chinese and US markets, as companies navigate the complexities of increasingly fragmented trade environments. This trend highlights the growing importance of supply chain diversification in the region.Research unveiled by Economist Impact and DP World highlights how businesses in APAC are adopting diversification strategies and digital innovation to maintain supply chain resilience in the face of growing trade tensions particularly between China and the United States.The fifth annual Trade in Transition study surveyed over 3,500 supply chain executives across the world. The global findings, which were launched at the World Economic Forum, reveal that firms are being forced to adapt at speed to rising protectionism and shifting geopolitical alliances, with business continuity and cost management as chief concerns.The research outlines three main trends in APAC trade:
Glen Hilton, CEO & Managing Director, Asia Pacific, DP World, said:
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"The Asia Pacific region is in an era of significant transformation. As businesses in the region implement bold strategies – diversifying supply chains, capitalising on regional trade deals and adopting frontier technologies – to drive expansion, they must also balance ambition with caution to sustain momentum in the face of global geopolitical instability. Our customers can count on DP World to help them strike this balance. With our suite of end-to-end supply chain solutions anchored by our strong network of ports and terminals, we stand ready to help businesses design agile supply chains for them to tap on Asia Pacific’s unparalleled growth potential."
John Ferguson, Global Lead, New Globalisation, Economist Impact, added:
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“In 2025 and the foreseeable future, global trade will be shaped by three forces: shifting geopolitics, climate change, and a new wave of AI and automation. Yet, businesses are not retreating from international trade but are stepping up to the challenge. Firms that stay agile and cost-efficient will have the edge. Firms that also combine risk management with AI experimentation and openness will be best placed to win in this new chapter of globalisation.”
Discover actionable insights and detailed strategies for thriving in the evolving global trade landscape. Click here to view the APAC report and here to view the full Global report.
KEY APAC INSIGHTS FROM TRADE IN TRANSITION 2025
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