De-risking – ASEAN as an option?

Article by Cora Jungbluth
Bertelsmann Stiftung (Gütersloh)

De-risking is the new buzzword for reducing dependencies on China. The recipe usually includes re-shoring production, increasing domestic stockpiling (e.g., of critical raw materials), and diversifying supply chains – with ASEAN frequently mentioned as a potential alternative, sometimes with a touch of overexuberance. However, it is important to keep expectations tempered, as ASEAN has some potential in this regard but is certainly not "the next China".

The search for “the next China” is closely linked to the discussion of de-risking, i.e., reducing critical economic dependencies on a country whose friendliness cannot be relied upon. China is a crucial target of de-risking for good reasons. China’s ultimate political goal is to reshape the existing international order to make it more accommodating to Chinese values and interests and autocratic regimes in general.

One way for them to achieve this is to reduce technological reliance on the West while at the same time increasing the rest of the world’s dependencies on China. These dependencies could then be used to implement these political goals. Key policies include the Belt and Road Initiative and Made in China 2025. Recognizing the threat, The EU declared China a "systemic rival" in 2019, alongside its existing partner and economic competitor role.

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Source:
Bertelsmann Stiftung
GED - New Perspectives on Global & European Dynamics