Asia's growth edge: How scale became strength

Editor's note: Deng Liuchun, a special commentator for CGTN, is an associate professor of economics at Duke Kunshan University. The article reflects the author's opinions and not necessarily those of either CGTN or Duke Kunshan University.

Under the theme of "Innovating at Scale," the 17th Annual Meeting of the New Champions of the World Economic Forum, also known as the Summer Davos, is being held in Dalian, China. Personally, the most eye-catching word in the meeting theme is "scale," as breakthroughs are plentiful, but turning a prototype into an affordable, reliable product is challenging.

As leaders gather in Dalian, that distinction helps explain Asia's economic resilience. The region's advantage lies in its growing ability to carry ideas from laboratories to factories and then to everyday life.

Asia is expected to contribute about 60% of global growth in 2026. While the IMF warned in April that the latest energy shock is testing economies dependent on imported fuel, the region has kept moving forward through barriers of tariffs, weak overseas demand, and supply disruptions. Economic development also benefits from domestic consumption in large economies, enabling export manufacturing across Southeast Asia. The ability to adapt to a changing environment enhances the region's resilience.

For example, Asian production no longer runs along a single line from a low-cost factory to consumers in developed countries. Components, capital, and expertise move among China, South Korea, Japan, Singapore and emerging economies across Southeast and South Asia. When a trade route is disrupted, firms are often able to pivot quickly and identify alternative pathways.

According to the Asian Development Bank, trade remains the most powerful engine of regional integration, while intra-Asian investment has remained robust despite ongoing supply-chain realignments. This resilience is rooted not in self-sufficiency, but in deep economic interconnectedness. Rather than attempting to replicate entire supply chains within national borders, Asian economies strengthen their competitiveness through extensive regional linkages and mutually reinforcing partnerships.

Manufacturing itself is undergoing a profound transformation. Rather than a stage of development that economies eventually leave behind, it remains a critical arena where businesses acquire the capabilities needed to deploy new technologies at scale. Advancing up the industrial ladder is not simply about producing more goods; it involves mastering complex processes such as product design, process optimization, brand building, and the services that surround production.

Research suggests that Chinese exporters have steadily enhanced their competitiveness by substituting imported components with increasingly sophisticated domestic alternatives. The significance of this trend extends well beyond China. Economies capture a greater share of value when local enterprises evolve alongside multinational firms, rather than remaining confined to low-cost labor or resource-based roles.

Nowhere is this transformation more visible than in Southeast Asia. In Vietnam, for instance, the World Bank estimates that exports account for roughly half of economic output and support one in every two jobs, either directly or indirectly.

Yet attracting additional assembly lines alone will not be sufficient to achieve high-income status. Sustainable progress requires stronger technical education, more competitive local enterprises, and deeper participation in engineering, business services, and product innovation. Across emerging Asia, policymakers face a similar challenge: converting foreign investment into enduring domestic expertise and industrial strength.

China remains the largest and most influential component of this regional ecosystem, though it is by no means the whole of it. Its advantage lies in the close integration of research talent, supplier networks, manufacturing capacity, and a vast consumer market. New ideas can be tested, refined, and commercialized rapidly, enabling innovations to reach scale and affordability in a relatively short time. The benefits often extend far beyond China's borders.

According to the International Energy Agency, solar module prices have fallen by roughly half since 2023, while battery pack costs have declined by nearly 30%. China's prominent position in clean-technology supply chains has played a significant role in accelerating the global adoption of greener technologies by driving down costs.

Institutions and rules are every bit as important as production capacity. The Regional Comprehensive Economic Partnership may lack the excitement generated by the latest breakthroughs in artificial intelligence, but its practical impact is considerable. By establishing common rules of origin and streamlining customs procedures, the agreement enables goods assembled across multiple economies to move more efficiently throughout the region.

Such seemingly technical details often determine whether supply networks operate smoothly or encounter costly delays. In this way, Asia is quietly shaping the future of economic governance not through grand declarations, but by creating workable frameworks that reflect the realities of regional commerce.

Against this backdrop, the most important question facing participants at the Summer Davos in Dalian is how promising ideas can be transformed into broad-based improvements in living standards. Part of the answer lies in China's industrial depth, the aspirations of emerging Asian economies and the regional connections that facilitate the flow of knowledge, investment and intermediate goods across borders.

The greatest risk is fragmentation. If these linkages stay weak, interdependence can quickly become vulnerability. If they remain open and adaptive, Asia could accelerate the development of the next generation of technologies. It could play an increasingly influential role in shaping the rules, institutions and growth models that can define the next phase of the global economy.

(If you want to contribute and have specific expertise, please contact us at opinions@cgtn.com. Follow @thouse_opinions on X to discover the latest commentaries in the CGTN Opinion Section.)