China and ASEAN Quarterly Q4 2025

To our dear readers,

On behalf of our team at Lundgreen’s Investor Insights, we extend our early greetings ahead of the holiday season.

We mark the end of the year by presenting this quarter’s issue of the China and ASEAN Quarterly where we put the services sector in focus. Major developing economies in the region are pinning hope on services to revitalise economic growth, which has been pulled down by highly volatile global financial markets in the past months. China and Southeast Asia can capitalise on its young, well-educated population now more than ever, at a time when inward-looking policies on goods trade have threatened global prospects.

The optimism towards services can be interpreted in multiple ways. Here, we explain how China is banking on services consumption to accelerate GDP growth as it looks to double the size of its economy over the next decade. The AI boom is also potentially a major driver of higher demand for services, contrary to initial fears that the emergence of highly intelligent chatbots would go on to replace human labour across professions.

One may also view this quarter’s theme as pinning hope on better public services from Southeast Asian governments, some of which are currently grappling with public dissatisfaction over corruption woes and bad governance. We see rising civil unrest as a fiery demand for governments to truly work for its people, as is the case for the Philippines, Indonesia, and Malaysia. Well-spent public resources have the capacity to improve living conditions and can unlock greater economic activity, which is of course always welcome.

New growth-inducing policies introduced in the Chinese and Southeast Asian markets are encouraging, fostering our long-held view that this region will be at the forefront of the global growth story.

We hope to provide useful insights that shape your investment decisions, and we are happy to receive any feedback that you may have.

Melissa Luz Lopez
Chief Economist for ASEAN