SINGAPORE – South-east Asia is an important market for Chinese businesses, given global uncertainties and the reconfiguration of supply chains, noted the secretary-general of the China Chamber of International Commerce (CCOIC).
Mr Sun Xiao, who was in Singapore as part of a 100-strong business delegation, added that Chinese companies can sidestep obstacles resulting from trade tensions between China and the United States by investing in the region and capitalising on its resources and labour.
He said these tensions mean that many goods from China, the world’s largest manufacturer, now have to “make a few more detours” before reaching the US and Europe.
Mr Sun also noted that Chinese companies pay special attention to South-east Asia, not just because of the region’s geographical and cultural proximity to China, but also because of free trade pacts and policies that benefit businesses.
The recently announced mutual visa exemption agreements between China and the Asean countries of Singapore, Malaysia and Thailand are examples, he said.
Mr Sun told the media here that an increasing number of Chinese enterprises in high-tech and innovative sectors such as the digital economy had set their sights on expanding into South-east Asia.
Industries related to the Belt and Road Initiative, such as infrastructure, energy and logistics, were also looking to invest more in the region.
Meanwhile, UOB renewed a memorandum of understanding on Jan 31 with the China Council for the Promotion of International Trade – with which Mr Sun’s CCOIC is affiliated – to further boost foreign investment and trade between China and South-east Asia.
UOB reported that it has so far helped more than 1,300 Chinese companies expand into South-east Asia and has facilitated the flow of about $22 billion in foreign direct investment from China into the region since 2020.
The memorandum of understanding allows the 350,000 or so Chinese companies that are members of CCOIC to access UOB’s local and cross-border solutions and to tap the bank’s partners in the region.
It also aims to enhance supply chain resilience along China-Asean investment and trade corridors, focusing on five industries – green agriculture, smart mobility, new energy, digital technology and healthcare, said Mr Sam Cheong, who is the head of UOB’s foreign direct investment advisory unit.
Mr Sun also noted that moves by foreign firms to relocate supply chains from China to South-east Asia were corporate decisions that were “only natural” amid an ongoing reconfiguration of industrial and supply chains.
However, he pointed out that while there had been some diversion of industrial chains, many of these companies had not withdrawn completely from China.
