Asia Pacific Firms Turn to Parallel and Dual Supply Chains to Navigate Geopolitical Risks
A new study by Economist Impact and DP World reveals that 33% of businesses in the Asia Pacific (APAC) region are creating parallel supply chains to avoid disruptions caused by geopolitical risks, while 29% are establishing dual supply chains tailored to the Chinese and US markets. The research underscores how companies are recalibrating their operations to manage increasingly fragmented trade environments and safeguard business continuity.
These findings come from the fifth annual Trade in Transition study, which surveyed over 3,500 supply chain executives across the world. Released at the World Economic Forum, the report shows that firms globally are moving swiftly to mitigate rising protectionism, shifting geopolitical alliances, and intensifying tensions, particularly between China and the United States. For many APAC businesses, this involves adopting “China Plus One” strategies and enhancing production in alternative hubs such as Thailand and Vietnam, helping distribute risks and costs across multiple locations.
Regional integration also features prominently in supply chain adaptation. The negotiating and implementation of preferential trade agreements like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP) have prompted 38% of APAC business leaders to see increased opportunities in the region. Almost 30% have reported cost savings stemming from reduced tariffs on exports within member countries, while nearly a quarter cited enhanced sourcing within the region. As APAC supply chains become more localised and interlinked, companies are strengthening oversight, reducing dependence on external markets, and supporting local economies.
Amid this transformation, Glen Hilton, CEO & Managing Director, Asia Pacific, DP World, notes the delicate balance businesses must strike as they diversify and deploy new strategies in turbulent times.
“The Asia Pacific region is in an era of significant transformation,” he says. “As businesses in the region implement bold strategies—diversifying supply chains, capitalising on regional trade deals and adopting frontier technologies—they must also balance ambition with caution to sustain momentum in the face of global geopolitical instability. Our customers can count on DP World to help them strike this balance. With our suite of end-to-end supply chain solutions anchored by our strong network of ports and terminals, we stand ready to help businesses design agile supply chains for them to tap on Asia Pacific’s unparalleled growth potential.”
Beyond trade deals and reconfigured networks, technological innovation is taking centre stage in APAC as companies look to maintain efficiency and counter labour shortages. Investments in automation and artificial intelligence are already yielding measurable benefits: 36% of APAC business leaders surveyed reported significant reductions in trade operation costs, while 28% identified improvements in resource planning and overall supply chain efficiency. Governments, too, are actively promoting digital transformation. Japan’s Society 5.0 initiative, for instance, encourages businesses to harness cutting-edge technologies as a means of boosting productivity and competitiveness.
Looking ahead, John Ferguson, Global Lead, New Globalisation, Economist Impact, predicts major shifts in the global trading landscape. “In 2025 and the foreseeable future, global trade will be shaped by three forces: shifting geopolitics, climate change, and a new wave of AI and automation,” he says. “Yet, businesses are not retreating from international trade but are stepping up to the challenge. Firms that stay agile and cost-efficient will have the edge. Firms that also combine risk management with AI experimentation and openness will be best placed to win in this new chapter of globalisation.”
As APAC businesses pursue parallel and dual supply chains to manage geopolitical headwinds, and as governments spearhead trade agreements and support technological progress, the region stands at the forefront of a pivotal moment in global commerce. Adaptability, innovation, and cooperation will be key for firms looking to thrive in this next era of interconnected trade.
Click here to view the APAC report and here to view the Global report.
