Chinese investment in ASEAN expands to benefit both sides

Strategic opportunities

Analysts and industry players expect that Trump — who started his second term as president by slapping an additional 10 percent tariff on Chinese goods in February — will push more Chinese companies to move production out of China to ASEAN countries.

"Chinese companies are facing strategic opportunities amid the golden decade of going global," Feng Qingqiang, general manager of Youdao Ads, told China Daily.

Youdao Ads is a digital marketing solution provider launched by Youdao Inc, a subsidiary of Chinese internet company NetEase Group. By using emerging technologies such as artificial intelligence, the platform connects over 10 million influencers, and reaches over 2 billion users worldwide in 75 countries and regions.

With the improvement of the Chinese manufacturing sector and brand management capabilities, coupled with a slowdown in domestic consumption growth, there are more opportunities for international expansion, said Feng. Many high-quality, innovative, and cost-effective Chinese products are becoming increasingly competitive in overseas markets, he added.

Southeast Asia's geographical location, young population, and the similarity of its current economic development to China's past growth, present significant market potential for Chinese enterprises, Feng said.

"After the pandemic, the e-commerce market in Southeast Asia has seen rapid growth, with the e-commerce penetration rate in key regional countries to reach 6.5 percent by 2025, a notable increase from the pre-pandemic level of 5 percent," he said.

In Malaysia, China is one of the top three FDI sources, hitting over 28 billion ringgit ($6.33 billion) in 2024, according to the Malaysian Investment Development Authority.

Safwan Nizar Johari, acting investment consul for the Malaysian consulate in Guangzhou, Guangdong province, said most of the recent Chinese investments are in the EV, battery, and other allied industries.

After China and Malaysia celebrated the 50th anniversary of diplomatic relations in 2024, Chinese companies are keen to do business in Malaysia as the multicultural country has a big ethnic Chinese population, Safwan said. "So it's easy for a Chinese company to do business in our country. When they go to Malaysia, they say many people can speak Chinese, there are many similarities with Chinese culture," he said.

Safwan said Malaysia also positions itself as a regional hub, allowing Chinese companies to use it as a production base to export around ASEAN.

One of these companies that bet big in Malaysia is the Geely Holding Group from Zhejiang province.

In 2017, the Hangzhou-based carmaker acquired a 49.9 percent stake in local car manufacturer Proton, with the goal of jointly developing it into the No 1 brand in Malaysia and one of the leading brands in ASEAN.

"Following years of integration, Proton has achieved a comprehensive transformation in research and development, manufacturing, quality, procurement, and marketing, securing the second position in sales and market share in Malaysia for six consecutive years," a Geely spokesperson told China Daily.