Facing west from the shores of Singapore, it‘s hard to see the strait due to the number of boats scattered across the water. Vast container ships, tugs and cruise liners all navigate through the strait, which narrows to one and a half nautical miles at its tightest point. The bustling activity through this crucial trading route is emblematic of the growth of Asian economies, which are increasingly trading with each other.

Developing Asia & shipping

  • Shipping is the lifeblood of Asian economies. Container shipping is the primary mode of cargo transportation between countries separated by wide bodies of water. 
  • It’s no surprise that, until the 18th century, Asia was the centre of world trade. The resurgence of intra-Asian trade has been driven by several factors, including an increasing number of free trade agreements, regional integration, and the rise of the Asian consumer.
  • Today, developing economies in Asia now handle 62% of the world’s port container traffic.
  • These links continue to expand. According to the IMF, intra-Asia trade will constitute approximately 40% of global trade by 2030. 

Green shipping revolution

  • The global shipping industry is responsible for some 3% of CO2 emissions.
  • In July 2023, IMO’s Marine Environment Protection Committee announced the industry’s ambition to achieve net zero emissions by 2050.  This bold goal will drive demand for new ships powered by cleaner, less carbon-intensive fuel.
  • We think this presents an exciting opportunity for investors as we enter a new multi-year upcycle for shipbuilding. Korean firms, especially KSOE – the world’s largest shipbuilding company by capacity  –   are at the forefront of developing vessels that run on alternative fuels.
  • The shift towards greener vessels will necessitate more complex engineering. This will play to KSOE’s scale and technological advantage. While investors have historically viewed the industry with scepticism, considering it value-destroying, the emergence of these innovative vessels heralds a positive shift in margin outlooks.  

Intra-Asia trade is growing rapidly. Korean shipbuilders are well-placed for alternative fuel vessels  

Our Emerging Markets Monthly Insights are brought to you by our Equities and Fixed Income investment teams and their emerging markets experts. This is a core strategy within our public-markets offerings. To find out more about our emerging markets equities offerings, visit our dedicated page.  

Alex Smith

Head of Equities Investment Specialists, Asia Pacific 

Rory Hardie

Associate Equities Investment Specialist 

Leo Morawiecki

Associate Fixed Income Investment Specialist


  1. Source: SEAN Stats, China Custom, Indian Department of Commerce, Korean Customs, Bureau of Foreign Trade, Taiwan, Ministry of Finance Japan. Japanese data based on Japanese yen, the rest is based on US dollar value (2022).