Business Opportunities & Risks in Asia-Pacific
Economy and Geopolitics
The Asia-Pacific region, with its significant economic and geopolitical importance, faces a multitude of complex challenges. From economic growth forecasts to tensions in international diplomacy, a differentiated picture emerges.
Economic dynamics
The region’s economies are showing remarkable resilience despite global uncertainties.
China as the world’s second-largest economy remains a key player. After a moderate growth in 2024, due to strict pandemic measures and regulatory uncertainties, the country is returning to a more robust development. Investments in green technologies, especially in renewable energies and the electrification of transport, are driving this recovery.
India is increasingly becoming the growth engine of the region. With a young population and a dynamic technology market, analysts refer to the country as the “new China.” The diversification of global supply chains, exacerbated by geopolitical tensions, puts India in a strategically advantageous position.
In Southeast Asia, one of the fastest-growing regions in the world, countries such as Vietnam, Indonesia and the Philippines are benefiting from a relocation of production from China.
Free trade agreements such as the Regional Comprehensive Economic Partnership (RCEP) strengthen economic integration and offer potential for long-term growth.
Australia and New Zealand, which are among the most stable economies in the region, face a double challenge.
On the one hand, they are benefiting from strong demand for raw materials such as lithium and rare earths, which are essential for the energy transition.
On the other hand, they are increasingly forced to find a balance between the United States and China, their main trading partners.
Geopolitical tensions
The geopolitical situation in Asia-Pacific remains tense. The rivalry between the US and China has intensified further. Conflicts over Taiwan and the South China Sea dominate the agenda. No quick solutions are expected in 2025, but the region could benefit from more intensive diplomatic efforts. In the midst of these tensions, regional actors are expanding their strategic measures. Japan and South Korea are investing heavily in their defense, while seeking closer ties with ASEAN countries and Australia. Australia, for its part, has deepened defence cooperation with the US and the UK through the AUKUS alliance, which China is watching critically. The Indo-Pacific region is increasingly becoming the center of global power games. The Quad alliance – consisting of the USA, India, Japan and Australia – aims to secure a rules-based order. At the same time, China is striving to further expand its influence globally with its Belt and Road Initiative.
Climate change and sustainability
Climate change remains a pressing issue for Asia-Pacific. The region is regularly severely affected by natural disasters such as typhoons, floods and heat waves. Southeast Asia and the island states of the Pacific are particularly vulnerable. International partnerships and green investments will be crucial to achieving climate goals. Australia has revised its energy policy and is increasingly relying on renewable energy to reduce its role as a net exporter of fossil fuels. At the same time, New Zealand and the Pacific are taking innovative steps to combine climate action and economic development.
Perspectives for Asia-Pacific
The economic and geopolitical landscape of the Asia-Pacific region remains dynamic and complex. Opportunities arise from technological innovations, a young and growing population, and increasing regional integration. At the same time, the risks, especially due to geopolitical tensions and the consequences of climate change, should not be underestimated. The region’s success will depend on how well countries are able to combine economic growth, social stability and international cooperation. In a changing world, the Asia-Pacific region remains a region with great potential – and equally great challenges.