Southeast Asia could attract manufacturing


Motorcyclists pass vendors selling food in a market at night in Ho Chi Minh City, Vietnam, on Wednesday, June 20, 2018.

Maike Elan | Bloomberg | Getty Images

Motorcyclists pass vendors selling food in a market at night in Ho Chi Minh City, Vietnam, on Wednesday, June 20, 2018.

The trade war between the Washington and Beijing is pushing many global companies to rethink the manufacturing and fabrication work they now do in China — and a bloc of Southeast Asian countries stands to benefit tremendously, according to a senior partner at consulting firm Bain & Co.

In the short term, there will be an adverse effect on the region as an exporting base for the world, and for the U.S. in particular, Satish Shankar, managing partner for Southeast Asia, told CNBC’s “Squawk Box” on Friday.

“Certain intermediate exports that go into China, and then onto the U.S., are going to be impacted in industries such as textiles and electronics,” he said. “However, in the long term, we feel pretty confident that ASEAN is a very attractive alternative supply chain base for companies looking to diversify away from China.”

The Association of Southeast Asian Nations (ASEAN) is made up of 10 countries in the region including Singapore, Thailand and Vietnam.

Bain predicted that as companies consider moving their supply chains into Southeast Asia, small and medium enterprises in the region will adopt more technologies into their daily operations that could potentially create a $1 trillion opportunity.



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