Industrial Transformation in ASEAN A Cluster-Driven Model for Regional and Global Collaboration 2026

Expanding ASEAN’s global connectivity5 The region is emerging as a strategic industrial hub supported by its strategic partnerships with Japan, China, the EU and the US. As ASEAN advances its energy transition, it is emerging as a strategic industrial hub in the global clean economy. Partnerships with Japan, China, the EU and the US are expanding access to technology, capital and regulatory expertise, enabling ASEAN to shape emerging green trade and supply chain standards. Through these collaborations, industrial clusters can localize green manufacturing, attract investment and secure long- term demand, positioning ASEAN as a pivotal node in the energy transition and sustainable growth. Japan Japan is acting as a technology catalyst and regional integrator. Through cross-national initiatives, it enhances diplomatic influence, sustains market relevance relative to China126 and secures markets for its advanced technologies and resilient supply chains.127 Japan is advancing a range of initiatives including hydrogen, ammonia and energy efficiency solutions through the Asia Zero Emission Community (AZEC).128 Key initiatives include the Muara Laboh Geothermal Expansion (Indonesia), the Fuel-Ammonia Turbine (Malaysia), AZEC Developing Carbon Markets (DCM) and the Economic Research Institute for ASEAN and East Asia (ERIA), which is currently working on decarbonization roadmaps for Viet Nam and Indonesia. China China, as ASEAN’s largest trade partner,129 has invested over $2.7 billion in clean energy across ASEAN.130 Clean energy trade amounted to $4.3 billion,131 spanning solar modules, wind components, electric vehicles and batteries. China is also enhancing clean energy cooperation. The Electric Power Planning and Engineering Institute is working with select ASEAN partners to enable large-scale clean energy deployment. Complementing this broader cooperation, Global Energy Interconnection Development and Cooperation Organization (GEIDCO) is sharing grid expertise – including high-voltage DC technology – to support renewable integration. 30 Industrial Transformation in ASEAN: A Cluster-Driven Model for Regional and Global Collaboration