Presentation by AMRO Director/CEO Yasuto Watanabe
1st RCEP Business and Investment Summit
Business in the RCEP Economy: Competing, Connecting and Scaling Across East Asia
September 9, 2026
Your Excellencies, ladies and gentlemen,
Congratulations to the East Asia Business Council and Management Association of the Philippines on convening the first RCEP Business and Investment Summit. It is an honor to join you today.
We heard this morning about how the world is reorganizing itself. Amid these shifts, one region is impossible to overlook: RCEP, with ASEAN+3 at its core.
Let me begin by putting the RCEP region into perspective.
In 1990, North America and the euro area dominated the world economy. Together, they accounted for 55% of global GDP.
The RCEP region, by comparison, accounted for about 20%.
Three decades later, the map looks very different.
By 2025, RCEP’s share of global GDP had risen to 28%. That was about the same as North America’s share—and almost twice that of the euro area.
RCEP accounts for about 30% of the world’s population and 30% of global trade.
It is no longer simply part of the global economy. It is one of its main centers of gravity.
At the heart of RCEP is ASEAN+3: the ASEAN members, China, Japan, and Korea.
Together, ASEAN+3 accounts for 92% of RCEP’s GDP.
To understand where RCEP is heading, we need to look closely at ASEAN+3.
This is not only a story of economic size. ASEAN+3 has become central to how the world produces, trades, invests, and grows.
This is where AMRO comes in.
AMRO works closely with all ASEAN+3 economies through economic surveillance and technical assistance.
The region has a shared pool of resources: the USD 240 billion Chiang Mai Initiative Multilateralisation, or CMIM. That is about 20% of the IMF’s financial resources.
Our work across ASEAN+3 gives region-wide view of the forces shaping its economies—both today and over the longer term.
Let me first turn to the near-term outlook.
We expect ASEAN+3 growth to ease to 4.1% in 2026, and 4.0% in 2027.
At the same time, inflation is expected to rise from 0.9% last year to 1.6% this year.
Our baseline is slower growth and somewhat higher inflation.
But the baseline is only part of the story. What could move us away from it matters just as much.
Three forces could shift the outlook: the technology cycle, the Middle East conflict and energy prices, and shifts in trade policy.
If these forces intensify, the impact could be large.
In our downside scenario, a sharp slowdown in demand for AI could pull growth down to 2.5%.
A renewed escalation of the Middle East conflict could push inflation up to 4.6%.
Uncertainty over tariffs and broader trade policy shifts also remains a concern.
Despite this difficult global environment, ASEAN+3 is well placed to keep driving global growth.
We expect the region to continue outpacing the world economy in the years ahead.
AMRO estimates that ASEAN+3 will contribute about 44% of global growth for the remainder of this decade.
ASEAN+3 does not just share in global growth. It drives it.
Why has the region remained so resilient?
For many years, East Asia was often called the world’s factory. Goods were made here. But much of the final demand came from elsewhere.
That model is changing.
More goods are now being made, traded, invested in, and consumed within ASEAN+3 itself.
The region is no longer only a factory for the world. It is becoming a market—and a growth engine—in its own right.
Three shifts are driving this change.
First, regional supply chains have become much denser and more connected.
In 2000, global production centered on three main nodes: the United States in North America, Germany in Europe, and Japan in Asia.
Those nodes remain important. But China has emerged as another major production. Links across ASEAN+3 have become much stronger.
This has two effects.
First, more parts and inputs move among economies within the region before becoming final goods. Firms have more options. That supports trade, jobs, and investment.
Resilience begins with options.
Second, these networks support upgrading. Japan and Korea remain anchors of high-value-added production. Other ASEAN+3 economies are deepening their roles and building up new capabilities.
The result is a denser production network. ASEAN+3 is now a supply-chain hub in its own right.
We have long known the region as a strong production hub. What is striking is how much the source of demand has changed.
In 2000, ASEAN+3 accounted for about 20% of global final demand.
By 2024, that share had risen to 27.5%. ASEAN+3 had become the world’s largest source of final demand.
For many years, East Asia was where the world came to make things. Today, ASEAN+3 is also where the world comes to sell them.
A larger base of regional demand provides another source of strength when demand elsewhere weakens.
Third, deeper regional ties are being reinforced by stronger investment links.
ASEAN+3 has long been an attractive destination for global investment.
Over time, investment from within ASEAN+3 into ASEAN has grown strongly.
These flows do more than provide capital. They bring new capacity, skills, technology, and links between firms.
Trade creates connections. Investment gives them roots.
But deeper ties also increase our exposure to one another.
We can see this in the region’s economic cycles.
Global forces still matter greatly. But regional forces now explain just as much of the variation in ASEAN+3 growth—about 36% each.
This is an important shift.
The world matters. The region matters just as much.
When a major ASEAN+3 economy grows faster—or suffers a shock—the effects can now pass more quickly to its neighbors.
This brings me to the other side of deeper integration.
The region has moved into higher-value parts of global supply chains. That is a major achievement.
But upgrading has also increased reliance on a smaller set of key partners and sectors.
Concentration is the hidden risk of specialization.
Building deeper links is no longer enough. We must also build more diverse links.
How, then, should we think about deeper regional integration?
The benefits are clear.
Stronger demand can cushion shocks from outside. More diverse supply links can help firms adapt when one route is disrupted. Moving up the value chain can raise output, income, and skills.
But the risks must be managed.
Shared business cycles can create common exposure. High concentration can leave firms open to a shock in one market or sector. Close trade and financial links can spread stress more quickly.
The answer is not less integration. It is better integration: wider links, more diverse supply chains, sound policies, and stronger regional safety nets.
Ladies and gentlemen,
We have become very good at connecting our economies. We must become just as good at protecting those connections.
Let me close with this.
RCEP now accounts for close to one-third of the world economy. ASEAN+3 sits at its core.
The region is becoming more connected through trade, demand, and investment. That creates a major opportunity for our economies—and for our firms.
But connection alone is not enough. Our links must be deeper, safer, and better able to withstand shocks.
If we achieve that, ASEAN+3 will not only remain a key engine of global growth. It will become a stronger anchor for the global economy.
Thank you.