Dezan Shira & Associates Releases Asia Manufacturing Index 2026 Amid Intensifying Competition

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The Asia Manufacturing Index 2026 highlights intensifying competition as Asian economies vie for manufacturing leadership. China retains the top spot for the third year, while Malaysia climbs to second place, overtaking Vietnam. The report offers transparency with historical comparability and standardized scoring, helping businesses make informed location decisions.

Dezan Shira & Associates’ latest publication – the Asia Manufacturing Index (AMI) 2026 – highlights how manufacturing competition across Asia is intensifying as companies rebalance supply chains and reassess long-term production strategies. Now in its third year, the Asia Manufacturing Index 2026 (AMI 2026) examines a more competitive regional landscape where manufacturing economies increasingly compete across similar cost, scale, and capacity factors. Targeted industrial policy, infrastructure investment, and regulatory reform are narrowing performance gaps, reinforcing the need for structured benchmarking to assess relative manufacturing competitiveness across Asia.

The AMI 2026 offers manufacturers, investors, and advisors a comparative tool for understanding how the relative strengths of 11 major Asian manufacturing economies compare and evolve.

China remains Asia’s leading manufacturing economy, and Malaysia climbs to second place

China retains its position as Asia’s top manufacturing economy in the Asia Manufacturing Index 2026 for the third consecutive year, a position supported by its unmatched industrial scale, deeply integrated supply chains, and technological depth. Despite ongoing diversification efforts, China’s manufacturing ecosystem continues to set the regional benchmark for production depth and efficiency.

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Through our supply chain reengineering services, we help businesses diversify sourcing, secure stability, and explore alternative production hubs to mitigate risk and drive long-term competitiveness.

The most notable development in the AMI 2026 is Malaysia’s rise to second place, overtaking Vietnam in a closely contested field. This shift highlights Malaysia’s growing competitiveness across several weighted manufacturing parameters, rather than any weakening in Vietnam’s underlying manufacturing fundamentals, which remain strong.

Beyond the top three, Singapore advances to fourth place, reinforcing its role in high-value and advanced manufacturing within Asia. Thailand records a significant improvement, moving from 10th to eighth, while Japan, South Korea, and the Philippines experience incremental ranking changes that reflect stable but increasingly competitive positions. India and Indonesia remain in sixth and seventh, respectively, while Bangladesh continues to rank 11th.

Greater transparency and historical comparability in the 2026 edition

The 2026 edition of the Asia Manufacturing Index introduces two major enhancements designed to improve comparability and decision-making.

First, the index now features an archive, allowing readers to review previous rankings, parameters, and relative performance over time. Second, the AMI 2026 publishes exact scores on a standardized 1–100 scale for every parameter. This change allows for a more nuanced comparison of country-specific strengths and weaknesses across Asia.

No single “best” manufacturing location

The AMI 2026 reinforces a reality for manufacturers with data: there is no single “best” manufacturing destination.

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Through cross-country competitiveness benchmarking and deep regulatory analysis, we help businesses develop robust, long-term entry strategies that maximize operational advantages while minimizing risks.

Optimal location decisions depend on sector-specific requirements, supply chain structure, regulatory environment, cost sensitivity, and risk tolerance. Even small adjustments to factors like labor costs, logistics performance, energy reliability, or water pricing can significantly alter rankings for a specific manufacturing strategy.

While the AMI applies a consistent weighting methodology, Dezan Shira & Associates emphasizes that the index should be used as a strategic starting point, rather than a one-size-fits-all answer.

To address this complexity, the firm develops customized Asia Manufacturing Index models tailored to individual operational, financial, and sector priorities, helping manufacturers align location decisions with long-term business objectives.

Supporting manufacturing and supply chain strategy across Asia

The Asia Manufacturing Index forms a core part of Dezan Shira & Associates’ broader Asia-Pacific manufacturing research and advisory work, supporting companies as they navigate supply chain restructuring, market entry, and regional expansion across Asia.

The full Asia Manufacturing Index 2026 is available on the firm’s website. Organizations seeking customized rankings or deeper market analysis are encouraged to contact Dezan Shira & Associates for further discussion.

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China Briefing is one of five regional Asia Briefing publications. It is supported by Dezan Shira & Associates, a pan-Asia, multi-disciplinary professional services firm that assists foreign investors throughout Asia, including through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Haikou, Zhongshan, Shenzhen, and Hong Kong in China. Dezan Shira & Associates also maintains offices or has alliance partners assisting foreign investors in Vietnam, Indonesia, Singapore, India, Malaysia, Mongolia, Dubai (UAE), Japan, South Korea, Nepal, The Philippines, Sri Lanka, Thailand, Italy, Germany, Bangladesh, Australia, United States, and United Kingdom and Ireland.

For a complimentary subscription to China Briefing’s content products, please click here. For support with establishing a business in China or for assistance in analyzing and entering markets, please contact the firm at china@dezshira.com or visit our website at www.dezshira.com.