General

Bringing in "and" going out "are hot topics for China and ASEAN to strengthen international trade and investment cooperation! With the continuous release of RCEP dividends, the enthusiasm of Chinese and ASEAN enterprises to "go global" and "bring in" remains undiminished.

The latest research report released by Dahua Bank China, "Dahua Bank Enterprise Outlook Survey Report (China Chapter)," points out that the surveyed companies will implement a series of plans to fully promote business growth, including business digitization, supply chain diversification, expanding new customer groups, improving employee skills or reducing costs. Meanwhile, over 90% of the surveyed companies have a strong demand for international trade expansion, and their main driving force for expanding overseas is to improve profitability and revenue, as well as enhance international trade reputation.

This report collects the main considerations of decision-makers or senior managers from nearly 600 large Chinese enterprises regarding their economic outlook and future development in 2023.

In 2022, the Regional Comprehensive Economic Partnership Agreement (RCEP) came into effect, injecting new vitality into cross-border trade and further deepening mutually beneficial cooperation between China and ASEAN.

This trend is still evident this year. According to data released by China Customs, in the first four months, ASEAN continued to remain China's largest trading partner, with a year-on-year increase of 13.9% in bilateral trade value, accounting for 15.7% of China's total international trade value.

In this context, ASEAN continues to become a highly favored market for Chinese enterprises, and ASEAN enterprises are also actively expanding into the Chinese market. The report shows that over 40% of Chinese companies plan to expand to Southeast Asia in the next three years, with Singapore, Thailand, and Malaysia ranking among the top three investment destination countries. In the ASEAN region, nearly 40% of surveyed companies hope to expand their business in mainland China, including 46% of wholesale trade enterprises and 45% of manufacturing and engineering enterprises. Companies from Thailand (52%) and Singapore (46%) have the strongest willingness to invest in the mainland Chinese market.

Regarding this, Zheng Jun, Vice President and Head of Wholesale Banking Department of Dahua Bank in China, stated: The trade industries between China and ASEAN have always had strong complementarity and geographical advantages. With the official implementation of RCEP, China and ASEAN have further strengthened trade and industry chain cooperation, and the enthusiasm for investment exchanges between the two sides continues to increase. As a bank that focuses on the interconnection between China and ASEAN, Dahua Bank China fully helps enterprises seize the opportunities brought about by this, and relies on the integrated business network of the group and its unique foreign direct investment Investment consulting services help enterprises directly connect with target markets, and provide professional advice and online resources in planning and layout, industry chain localization, cross-border fund coordination, foreign exchange and interest rate hedging, and other aspects

Although companies have a positive attitude towards their future development prospects, they still face two major challenges: global high inflation and diversified supply chain demand.

The survey found that although most of the surveyed companies expect high inflation to ease in the next six months to two years, high inflation has an impact on nearly 90% of surveyed Chinese companies and has led to an increase in operating costs and raw material costs for more than half of the companies. The main challenges faced by enterprises in building a diversified supply chain are procurement difficulties, rising supply costs, and just in case requirements. The interviewed enterprises also actively responded by establishing stronger supplier relationships, digitizing supply chain management, and reserving raw materials in advance to ensure the stability of the supply chain.

At the same time, as China's economy moves towards high-quality and sustainable development, enterprises also attach great importance to sustainable transformation. The report indicates that almost all surveyed companies indicate that sustainable development is important or crucial to them, however, only nearly half of the surveyed international trading companies have implemented sustainable development measures. One of the main obstacles that constrain enterprises from implementing sustainable development measures is the ability to obtain sustainable financing.

Zheng Jun stated: In February of this year, the first round of negotiations for the 3.0 version of the China ASEAN Free Trade Area began, which will continue to enhance the confidence of mainland Chinese enterprises in expanding cross-border investment and trade in the ASEAN region. Currently, the real economy is forging ahead, facing many challenges such as reducing costs and increasing efficiency, expanding financing channels, and stabilizing the supply chain. Dahua Bank China focuses on building efficient products and financial solutions for enterprises, helping customers improve financing and settlement efficiency Improve capital liquidity, manage supply chain costs, and provide innovative sustainable financing solutions to safeguard the development of the real economy and help international trade enterprises achieve sustainable development