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Asia's economies are set to remain the global growth engine in 2025, despite geopolitical tensions and economic headwinds. The Asia House Annual Outlook 2025, launched on Thursday in London, spotlights the resilience of the region's economy.
"Asia continues to demonstrate its resilience in the face of global turbulence," said Michael Lawrence OBE, Chief Executive of Asia House. "This report provides critical insights for businesses and policymakers to navigate risks while capitalizing on the opportunities the region has to offer."
The report forecasts growth exceeding 6 percent in India, Vietnam and the Philippines, with Indonesia and Malaysia following closely behind at over 5 percent. Digital acceleration, higher consumer spending and progress in green initiatives are identified as key drivers.
Southeast Asia's rapid adoption of digital technologies is another highlight, fostering financial inclusion and opening new markets. Malaysia and Singapore are emerging as semiconductor hubs, benefiting from the ongoing China-U.S. technological rivalry.
China's role in the global economy
China's economic growth is projected to stand at around 4 percent in 2025, but its leadership in renewable energy and digital innovation remains a cornerstone of its strength. The Chinese Ambassador to the UK, Zheng Zeguang, emphasized the country's contributions during his address at the launch.
"China's GDP is expected to exceed 130 trillion yuan [$17.74trn] in 2024," Zheng stated. "China's contribution to world economic growth remains at around 30 percent, still the biggest engine driving the world economy."
Ambassador Zheng Zeguang, speaking at the Asia House forum. /CGTN
Zheng highlighted China's achievements in green and low-carbon transformation, noting that renewable energy now accounts for 54.7 percent of the country's installed capacity. Additionally, China has made strides in integrated circuits, artificial intelligence, and quantum communications.
"These achievements have once again exceeded outside forecasts and proved those Western politicians wrong," he remarked.
Strengthening China-UK relations
Zheng also stressed the importance of strengthening economic ties between China and the UK. "Counting Hong Kong, the annual bilateral trade between China and the UK has surpassed 110 billion pounds [$134bn]," he noted. Recent high-level dialogues between the two countries have produced 69 outcomes in areas including market access and green development cooperation.
"Now, China-UK relations stand at a critical juncture," Zheng said, referencing UK Chancellor Rachel Reeves' recent visit to China. "We should seize the moment and keep up the momentum to work together."
Looking ahead, Zheng called for deeper cooperation within the Asia-Pacific region to promote stability, connectivity, and innovation. "We need to make green innovation a catalyst for the Asia-Pacific," he said, urging the region to strengthen cooperation in frontier areas like AI and quantum information.
Challenges on the horizon
While opportunities abound, the return of Donald Trump to the White House is cited as a significant challenge for Asia. His threats of widespread tariffs could disrupt the region's economies and heighten tensions with China.
"Geopolitics poses the greatest risk," the report notes. "Central to that is the return of Donald Trump to the White House, with his threats of widespread tariffs potentially becoming a major disruptor."