Asia Pacific: Economic resilience driven by pragmatism and regional partnership
2025 has been anything but stable. Against a backdrop of trade shocks and rising protectionism, Asia Pacific’s export-oriented economies have held up remarkably well. GDP growth is largely on track, with inflation under control across the board – all without large-scale government stimulus. This is reflected by a mix of caution and optimism in the Deloitte APEC CEO survey, where seven in ten of Asia Pacific’s corporate leaders are optimistic about their company’s performance but only 44% are optimistic about the global economic outlook.
Animal spirits are stirring again
Hong Kong’s financial markets have come alive, with IPOs and trading volumes surging and the Hang Seng Index up 31% since January. Mainland China ’s pivot to domestic-led growth is paying off, with its “DeepSeek moment” in AI, biotech, and semiconductors—proving that flexibility and technological prowess can anchor resilience. Japan, too, is having a breakout year with a record US$232 billion in Q1 mergers and acquisitions (M&A), up 276% year-on-year, with projections reaching US$950 billion for the year1. With global investors diversifying away from the US, Asia Pacific’s relative value and expected weaker US dollar are only adding fuel to the fire. Across the region, Asia Pacific leaders expect access to capital to continue to ease and 59% will actively pursue M&A in the next three years, up from 39% in the year ahead2.
Regional partnerships setting the stage for accelerated recovery and future growth
But real strength comes from integration. The Regional Comprehensive Economic Partnership (RCEP), the world’s largest free trade agreement, covering over 30% of global GDP and is actively reducing tariffs and aligning regulations across its 15 member economies, while the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is expanding membership, further integrating Pacific Rim economies, and setting new standards for trade and investment. APEC’s business leaders are bullish on the potential, a third of businesses responding to the survey expect half or more of global sales from the APEC region in the next three years, up from 19% today3.
Digital integration is no longer a buzzword but a priority, with agreements like the Digital Economy Partnership Agreement (DEPA) and the ASEAN Digital Economy Framework Agreement harmonizing rules, cross-border payments, and cybersecurity, making digital trade and e-commerce seamless and secure.
Infrastructure connectivity, particularly through Mainland China ’s Belt and Road Initiative, remains central to regional integration, with new projects in Southeast Asia and Central Asia enhancing physical and digital links. Supply chain diversification and resilience is now a strategic imperative, with half of Asia Pacific leaders investing supply chain expansion and diversification in the year ahead4, while regional governments and businesses prioritize proximity and adaptability.
Intra-Asia trade is thriving
Intra-regional trade now accounts for nearly 39% of global exports, and 37% of imports propelled by complementary economies and external pressures to foster intra-regional flows. ASEAN has become Mainland China ’s largest export market, and policy innovations like Mainland China ’s zero-tariff for least developed countries and its push to join CPTPP are locking in long-term resilience.
Yet, challenges remain. The region’s manufacturing ambition is matched by climate risk: Asia Pacific produces 60% of global emissions, and emissions are not yet falling5. Moving to clean technology is both an environmental and economic opportunity: it reduces fossil fuel exposure, attracts green capital, and secures access to markets governed by the new EU low-carbon standards. From Mainland China’s dominance in low-carbon technologies to Australia’s clean energy export potential, the region can position itself as a global climate leader.
To unlock further growth, the region must activate domestic demand, deepen domestic capital markets, and strengthen currency swap mechanisms. The greatest competitive gains lie in coordinated, region-wide action—leveraging industrial expertise, technological advances, and investment flows.
Resilience is not built in isolation
The lesson from 2025: resilience is not built in isolation. It demands relentless integration, policy pragmatism, and a willingness to partner for the long term. For leaders, doubling down on collaboration, technology investment, and low-carbon solutions will turn challenge into opportunity and ensure the region not only withstands global shocks but shapes the future of growth and sustainability.
