With an average annual economic growth rate of more than five percent, the countries that comprise this dynamic region represent a thriving trade and economic hub, despite infrastructure and regulatory challenges.
Consisting of 11 countries reaching from eastern India to China, Southeast Asia is generally divided into "mainland" and "island" zones. The mainland—comprising Burma, Thailand, Laos, Cambodia, and Vietnam—is an extension of the Asian continent, while Island Southeast Asia includes Malaysia, Singapore, Indonesia, the Philippines, Brunei, and the new nation of East Timor, formerly part of Indonesia. These countries' diversity lies at the heart of the region's rapid economic growth.
Southeast Asia's 11 countries have a combined gross domestic product (GDP) of $1.9 trillion; a population of almost 600 million people; and an average per-capita income nearly equal to China's, according to Southeast Asia: Crouching Tiger or Hidden Dragon?, an article published by the International Economic Bulletin.
Over the past decade, the countries have averaged a growth rate of more than five percent per year. If Southeast Asia were one country, it would be the world's ninth-largest economy. It would also be the most trade-dependent, with a trade-to-GDP ratio in excess of 150 percent.
U.S. imports from Southeast Asia have grown steadily over the past few years, reports global trade intelligence firm Zepol (see chart below). Much of this import traffic comes from Malaysia and Thailand, but Vietnam is quickly catching up. The region as a whole experienced significant U.S. import growth in the third quarter of 2012, rising 1.3 percent from the third quarter of 2011.
"Trade activity is increasing in Southeast Asia, particularly from Vietnam, " says Paul Rasmussen, CEO, Zepol. "As labor costs rise in China, more companies are turning to nearby countries to fill their orders."
All 11 Southeast Asian countries belong to the Association of Southeast Asian Nations (ASEAN), a 45-year-old regional organization that promotes economic integration, and aims to create an Economic Community—a single market for goods, services, investments, and skilled labor—by 2015.