Roscongress Foundation experts outline the key economic trends in Asia

Experts at the Roscongress Foundation have outlined the key economic trends across Asian countries. They are set out in the analytical review entitled “Asia Trends 2026: The AI Boom, Industrial Relocation, and Geopolitical Fragmentation”, prepared ahead of the opening of the Eastern Economic Forum on 1 September.

The review notes, among other things, that Asia accounts for around 60% of global GDP growth and is becoming the world’s new centre of trade, industry, technology, finance, and military power. Within the region, however, economic growth is highly uneven, while technology and capital are concentrated in a small group of states, making consolidation difficult.

The ASEAN countries, meanwhile, face competition from Chinese manufacturers while also coming under growing geopolitical pressure from Washington. More broadly, the Asia-Pacific region is more exposed than any other to the effects of the energy crisis and to climate risks such as a super El Niño.

According to the International Monetary Fund, Asian GDP grew by 5% in 2025, significantly ahead of global growth of 3.5%. Within the region, however, countries face a range of specific challenges, from high labour costs and insufficient industrial capacity to balance-of-payments difficulties and currency instability. These factors are driving increasingly divergent development paths among Asian economies. The region’s advanced economies, such as Japan and South Korea, posted lower growth rates, at 1.2% and 1% respectively in 2025. Asia’s emerging economies grew by 5.5% overall over the same period, with performance ranging from a 2% contraction in GDP in Myanmar to an 8% surge in Vietnam.

Countries with the strongest growth prospects are attracting investment, leaving others with fewer opportunities to draw in capital. According to the United Nations Conference on Trade and Development, developing countries in Asia attracted USD 644 billion in foreign direct investment in 2025. That is around 40% of the global total and more than 70% of all investment in developing countries. Capital flows are unevenly distributed: eight of the ten largest recipients of foreign direct investment among developing countries are in Asia, and together they account for around 60% of all inflows to developing economies and more than 80% of inflows to the region.

Capital is becoming increasingly concentrated not only in a small number of countries but also in a narrow range of sectors, particularly artificial intelligence, clean energy, semiconductors, and critical minerals. In the longer term, this could deepen inequality and worsen the position of countries without a strong presence in these fields.

Asia is one of the principal beneficiaries of the global AI boom. The investment cycle associated with its development has driven up demand for semiconductors, memory, servers, network equipment, and related electronics. The region occupies a central position in the global supply chain for these products. Technology exports will remain a powerful engine of economic growth in Asia, although the benefits will be distributed unevenly depending on each country’s position in the value chain.

South-East Asia’s role as an industrial centre is growing as production capacity relocates there from China, which is no longer a low-cost manufacturing base. Chinese companies have begun redirecting production to Vietnam and Indonesia in particular in order to mitigate the impact of US tariffs. At the same time, China has increased its exports of industrial components and capital goods, supplying the equipment and parts needed by manufacturing centres in other countries.

Exports of intermediate goods, including memory chips, other semiconductors, and industrial components, rose by 9% in 2025. Part of this represented an indirect offset to reduced shipments to the United States, as components, particularly in electronics, were used by manufacturers in other countries to produce goods that were subsequently exported to the US. A fall of roughly $15 billion in smartphone exports, for example, was matched by a comparable increase in shipments of components, notably to India.

In many other cases, however, the growth in exports of components and equipment was not linked to replacing sales China had lost in the US. Instead, it supported the expansion of production in third markets, especially developing ones, reinforcing China’s role as a supplier of production inputs rather than an exporter of finished goods.

The result is an integrated supply chain taking shape across the region, encompassing research and development and the manufacture of high-technology components in China, assembly and packaging in an ASEAN country such as Malaysia or Vietnam, and the subsequent shipment of products to markets within the region and beyond.

Amid the fragmentation of the global economy and trade, the development of the Eurasian space calls for resilient regional supply chains and logistical connectivity between states. Russia’s Far Eastern Federal District can play a strategically important role here. Thanks to its location, the district can serve as a resource and logistics gateway within the transport corridors linking European Russia with Asia. For a long time, infrastructure constraints held back the expansion of ties between Russia and Asian states, but the situation has begun to change with the development of the Eastern Operating Domain, which comprises the Baikal–Amur Mainline and the Trans-Siberian Railway.

A programme to modernize the Eastern Operating Domain has been under way since 2013, aimed at eliminating bottlenecks on the railways of Siberia and the Far East. Over that period, its carrying capacity has increased by 84%, reaching 180 million tonnes in 2025. The modernization is expected to raise that figure to 210 million tonnes by the end of 2030 and 270 million tonnes by the end of 2032. The development of the rail network and port infrastructure will largely determine the prospects for Eurasia, and for the Asia-Pacific region in particular, as the world’s economic, financial, and trade centre shifts towards the region.

The Eastern Economic Forum is taking place from 1 to 4 September on the campus of Far Eastern Federal University. This year’s central theme is “The Far East: Development for the Benefit of People”. The EEF is organized by the Roscongress Foundation with the support of the Government of the Russian Federation.