The Emerging Asia
Manufacturing Index 2024

The Political Risk Tier provides a comprehensive assessment of the country's government, regulatory stability, and levels of corruption. It is weighted at 6% within the EAMI 2024 and showcases the politically stable environment manufacturers enjoy in Malaysia, China, and Vietnam.

The Business Environment Tier, at 19% weightage, offers detailed insights into the regulatory framework, operational conditions, and specific restrictions within each economy. Three out of the six parameters for this criterion include the Manufacturing Registered Capital Minimum Average, Average Company Setup Time, and ease of hiring foreign staff. Each parameter undergoes thorough research and scrutiny by our experts at Dezan Shira & Associates, guaranteeing the provision of up-to-date rankings and detailed insights into specific facets of each parameter.

The International Trade Tier, with a weight of 12%, offers a glimpse into the level of openness for international trade within each economy. This segment presents a comprehensive analysis of the trade dynamics of each country, the presence of trade barriers, and an evaluation of domestic suppliers for key industries. Vietnam stands out in this tier, demonstrating a significant strength in attracting foreign manufacturers: its low tariffs, attributed to its robust integration into various free trade agreements, serve as a compelling advantage.

The Tax Policy Tier measures the tax incentives in each economy for the manufacturing sector. Key parameters include Corporate Tax Rates, available Tax Incentives for Manufacturers, and measured Tax Efficiency. At the time of compiling the EAMI 2024, the OECD's Global Minimum Tax (GMT) and its effect on MNE profits have not been factored into this Tier yet. However, they are expected to have a significant impact on next year's ranking.

The Infrastructure Tier, at 21%, holds the highest weight within this index and evaluates the quality of infrastructure across 11 parameters. It encompasses diverse infrastructure aspects, including Energy Cost, which assesses electricity prices supporting manufacturing operations in each country, and Infrastructure Investment, reflecting the percentage of GDP invested in infrastructure by the government. Additionally, it analyzes Water Availability, the state of the country’s internet development, and International Freight Costs. China leads in this tier due to its unparalleled investments into infrastructure.

Equally important, The Workforce Tier, constituting 19% of the index, evaluates the current state of the labor force. Key parameters include population, wage, and productivity measurements, which are pivotal in identifying markets with cost-effective labor. Bangladesh leads among the eight countries in terms of average wage and labor market mobility. However, India's large population and low minimum wage, as well as the Philippines' population growth, median age, and English language proficiency, position them ahead of the other six countries in this tier overall.

With a weight of 5%, the Innovation tier assesses two primary parameters: R&D expenditure and Innovation/Technology Access, which are crucial for high-tech manufacturers. Both parameters are sourced from the World Intellectual Property Organization’s Global Innovation Index 2023, with China, Malaysia, and Indonesia emerging as frontrunners in this aspect.