The Paradox of Southeast Asia's "Green Industrial Policy": How Developing Nations Can Balance Transformation, Competition, and Fairness

The Paradox of Southeast Asia's "Green Industrial Policy": How Developing Nations Balance Transformation, Competition, and Fairness

Global manufacturing is undergoing a profound structural reshaping, and Southeast Asia is at the forefront of this transformation. As a hub for about 12% of global manufacturing, the region is attempting to reshape its economic lifeline through "green industrial policies" in response to the pressures of climate change and global value chain restructuring. However, empirical studies on six major economies (including Vietnam, Thailand, Malaysia, etc.) show that this transformation path is not smooth; it is a complex interplay of institutional resilience, policy tension, and social contradictions.

Resilience and Institutional Advantages of the Developing Country Model

The rise of the Southeast Asian economy has largely drawn lessons from the experience of the Developmental State in post-war Japan. The core logic of this model is not pure laissez-faire free market operation, but rather a state-led, systematic industrial upgrading strategy. It effectively translates state will into the formation of industrial clusters by meticulously screening Foreign Direct Investment (FDI) through state institutions, implementing localization requirements, directing skill development, and establishing clear export-oriented policies. Taking Thailand as an example, its success in the automotive manufacturing sector is a manifestation of state institutions strategically guiding specific industries and allocating resources. This model demonstrates the powerful capacity of developing countries to achieve "late-stage development" by coordinating resources, managing technology absorption, and guiding capital flows, even in the absence of complete market-driven forces.

Structural Tensions in the Green Transition

Although governments in various countries have rapidly deployed national green policies, attempting to promote renewable energy deployment and the cultivation of green manufacturing through state coordination, research reveals a significant structural contradiction between this top-down policy deployment and grassroots industrial practices. Despite the widespread promotion of the "green" label, export-oriented industrial models often fail to fundamentally resolve existing labor preparedness uncertainties, and may even generate new pressures in terms of environmental governance. This suggests that simply "greening" policies is insufficient to automatically eliminate the social costs and environmental externalities in the production process during rapid industrialization.

Supply Chain Restructuring and the Gap in Global Competition

Southeast Asia is caught in the strategic squeeze between the two major economic powers, China and the United States. On one hand, policy competition within the region accelerates vertical integration and technological catch-up in specific industries. On the other hand, they must find new positioning within the existing global value chain. This dual pressure requires countries to be wary of the risk of being locked into low-value links while simultaneously promoting the absorption of "green" technologies (such as new energy and battery supply chains). The migration and upgrading of industrial chains is no longer just a technical issue; it is a comprehensive reflection of national strategy, geopolitical economic layout, and the contest over international trade rules.

Conclusion: Institutional Deepening Towards a "Just Transition"

The Southeast Asian case clearly shows that the success or failure of green industrial policy ultimately depends on the degree of "democratization" of the institutions.## Conclusion: Institutional Deepening Towards a "Just Transition"

The Southeast Asian case clearly demonstrates that the success or failure of green industrial policies ultimately depends on the degree of "democratization" of the institutions. While developing countries possess coordination capabilities that go beyond market-driven ones, achieving true ecological sustainability and social justice requires enhancing inclusivity in policy-making processes to ensure that the benefits of the transition are more equitably shared among all stakeholders. The key future challenge lies in how to upgrade existing policy coordination mechanisms from an elite-led model to a governance system with greater social inclusivity and transparency, in order to achieve a more resilient industrial future while addressing the climate crisis and maintaining economic vitality.