China, ASEAN companies eye each other's markets

2023-05-24 08:15:32China Daily Editor : Li Yan ECNS App Download

A view of the booth of UOB during an expo in Shanghai. (CHINA DAILY)

Chinese companies as well as their counterparts from the Association of Southeast Asian Nations are expressing a keen interest in exploring business opportunities in each other's markets, propelled by the Regional Comprehensive Economic Partnership pact taking effect early last year, according to a report released by United Overseas Bank (China) Ltd on Tuesday.

The Singapore-based bank found in a poll that Southeast Asia and Hong Kong Special Administrative Region tied as the top overseas investment destinations among the surveyed companies. The survey was conducted on 588 top executives or decision-makers of Chinese mainland companies with an annual sales revenue of 100 million yuan ($14.2 million) to 4 billion yuan or higher.

The Americas ranked third among the companies with outbound plans, followed by North Asia and Europe.

Specifically, over 40 percent of the surveyed companies planned to expand their operations in Southeast Asia over the next three years. Singapore, Thailand and Malaysia were the top three investment destinations for Chinese companies, the survey showed.

Hotel and property, construction and infrastructure, as well as consumer goods retailing were the three sectors that companies on the mainland were most interested in overseas.

Southeast Asian markets have stronger demand for these sectors as they are still at a relatively earlier development stage, said Adaline Zheng, alternative CEO and head of wholesale banking for UOB China. Meanwhile, China has taken the lead worldwide in these industries.

The poll found that about 40 percent of companies in the ASEAN region wished to expand their businesses in the Chinese mainland. About 46 percent of wholesale companies and 45 percent of construction and engineering enterprises from ASEAN economies have expressed such plans, showing the strongest willingness.

Companies from Thailand and Singapore were the most interested in investing in the Chinese mainland market, according to the UOB report.

UOB's findings are in line with the overall trend.

Data from the General Administration of Customs in early May showed that ASEAN continued to be China's biggest trade partner during the first four months of the year, accounting for 15.7 percent of the country's total foreign trade value. The value of bilateral trade jumped 13.9 percent year-on-year to 2.09 trillion yuan by the end of April.

Amid the ongoing economic recovery, market sentiment is generally upbeat in China, as 94 percent of the interviewed company managers believed the business environment is sound at present. On the outlook for their companies' performance for 2023, 92 percent of the company managers held a positive attitude.

Despite the overall optimism, companies should address two major challenges — of soaring inflation globally and diversified demand in the supply chain, said Jimmy Koh, managing director for the group strategic communications and brand department at UOB.

Although inflation is expected to be lower in the next six months to two years, 89 percent of the surveyed Chinese mainland companies said they would remain affected, especially by rising cost of operations and raw materials, according to UOB.


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