China’s position as a leading exporter in global trade is being challenged. Trade tensions with the US followed by the COVID-19 pandemic have raised questions about the sustainability of China’s trade and GDP growth. Efforts to re-shore and friend-shore are disrupting China’s exports as well as the production structure of its trading partners. Added to the mix is China’s increasing transition up the production chain, from labor-intensive to high-skill sectors. This AMRO Analytical Note kicks off our Trade Wind Series of research notes on supply chain and FDI reconfiguration within the ASEAN+3 region.

This issue analyzes China’s and ASEAN’s trade performance to assess (1) if their respective contributions have materially changed; and (2) China’s changing comparative advantage across sectors and how the rest of the region may be adjusting to benefit from it. It also identifies the other ASEAN+3 economies that have stepped in to take up some of China’s market share in the latter’s declining sectors, and those that are successfully leveraging off its ascendant sectors.