General

Standard Chartered Bank recently released a report entitled "Business Without Borders: China-ASEAN Trade Corridor", indicating that Chinese companies look forward to accelerating investment in ASEAN after the Regional Comprehensive Economic Partnership (RCEP) takes effect: nearly 90% of the interviewed Companies (88%) plan to increase investment in ASEAN by more than 25% within 3-5 years after the RCEP takes effect, and 42% of companies increase their investment by more than 50%, showing that Chinese companies are confident about the opportunities in ASEAN after the RCEP takes effect.

In the first quarter of 2021, ASEAN continued to maintain its position as China's largest trading partner, with a total import and export volume of RMB 1.24 trillion, a year-on-year increase of 26.1%. The trade exchanges between ASEAN and China continued to deepen.

The Chinese companies interviewed are generally optimistic about continuing to explore the ASEAN market. Ninety-five percent of the surveyed companies believe that their ASEAN business will continue to grow in the next 12 months, and 65% of the surveyed companies believe that the growth rate will exceed 10%.

The three ASEAN markets most favored by Chinese companies surveyed are Malaysia (65%), Singapore (60%) and Thailand (53%).

Interviewed Chinese companies believe that the driving force for the growth of the ASEAN market mainly comes from ASEAN’s rapid growth and promising consumer market (56%), preferential policies issued by ASEAN governments (53%) and ASEAN’s ability to become a reliable supply chain base ( 51%). In addition, 47% of the interviewed companies believe that with the blessing of a series of free trade agreements, ASEAN can become a bridgehead to enter other markets.

In terms of specific measures on how to promote local business growth, the most interviewed companies chose to carry out digital transformation (58%), followed by promoting sustainability projects or ESG (Environmental, Social and Corporate Governance) projects (47%), and Establish a new joint venture company or reach a new strategic cooperation (44%).

In addition, the Chinese companies interviewed believe that the main challenge in developing the ASEAN market is to develop a business model that meets the characteristics of the local market (58%), followed by understanding the local regulatory environment (56%), and establishing a supply chain system with local suppliers ( 56%).

The survey was conducted in April 2021 and interviewed 43 Chinese companies that have already established business in ASEAN, mainly from manufacturing, retail, and computer software and hardware industries, 93% of which have established production bases in ASEAN.