vietnam-briefing.com November 21, 2023

Amid evolving dynamics in Asia’s supply chain and labor markets, extensive discussions have unfolded regarding the notable shift of manufacturing operations to Southeast Asian countries. While much of this discourse has traditionally centered around foreign companies relocating from China in pursuit of cost-effective alternatives, a compelling aspect often overlooked is the surge in such endeavors by Chinese corporations themselves.

Driven in part by rising domestic wages and operational costs, Chinese companies have increasingly directed their investments towards the manufacturing sector in ASEAN countries. What was once a less pronounced trend has rapidly transformed, reflecting a strategic recalibration of Chinese business interests and a major shift in where the majority of global manufacturing takes place.

The significance of Chinese investment in ASEAN’s manufacturing landscape is underscored by the fact that China holds the position of ASEAN’s largest trade partner, and is fast becoming one of the most important sources of investment in the region.