Chinese firms will expand presence in South-east Asia

Significance South-east Asia maintained its position as the largest recipient (40%) of China’s total Asia-Pacific engagement, which was valued at USD14.8bn, up USD12.4bn from 2022. In recent years, Chinese companies have established themselves as one of the major sources of inward foreign direct investment (FDI) in South-east Asia. Impacts China’s regional FDI will increase amid slowing domestic growth and reduced FDI elsewhere, linked to geopolitical tensions and restrictions. Geographical proximity and cultural similarities will provide an additional impetus for the South-east Asian investment drive. Rapid expansion will sharpen geopolitical and commercial competition between Chinese firms and their US and Japanese counterparts.