Chinese investment in Southeast Asia: (how) does it matter?

Foreign direct investment (FDI) is often conceptualized as an element of geoeconomics, whereby states wield economic influence, build alliances, and shape the global political and economic landscape in their favor. Southeast Asia is no stranger to such tussles because of its strategic location in the middle of major trade routes. In recent years, China has emerged as a prominent player in the region, apparently upending the hitherto stable environment. This paper explores Chinese FDI entering Southeast Asia, comparing it to three more mature investors: Japan, Korea, and Taiwan. The similarities and differences between these four providers are illustrated through an analysis of their FDI patterns over the last 10–20 years. Two interrelated arguments are posited. Firstly, Chinese FDI is considerably "smaller" than popular rhetoric suggests. Secondly, Chinese FDI entering the region focuses mainly on tertiary industries such as real estate and general business services, unlike the manufacturing-heavy nature of Japanese, Korean, and Taiwanese FDI. Because of the rather distinct characteristics of these four FDI sources, it can be inferred that there has been relatively little direct competition between them.