Logo of Phnom Penh Post newspaper Phnom Penh Post - Maybank: China’s BRI investment jumps in SE Asia

Maybank: China’s BRI investment jumps in SE Asia

Content image - Phnom Penh Post
hinese President Xi Jinping unveiled ambitious plans in 2013 to build a series of roads, railways, ports and industrial parks linking the country to other parts of Asia, the Middle East, Africa and Europe.

Maybank: China’s BRI investment jumps in SE Asia

China's Belt and Road Initiative (BRI) has made a renewed push into Southeast Asia, a recent report has found.

It noted that Chinese BRI investments in the region are showing signs of recovery while the Sino-US trade war is pushing Chinese companies to relocate manufacturing facilities to Southeast Asia and escape the punitive US tariffs.

Chinese President Xi Jinping unveiled ambitious plans in 2013 to build a series of roads, railways, ports and industrial parks linking the country to other parts of Asia, the Middle East, Africa and Europe.

Since then, China’s outward investment in the Belt and Road countries has risen faster than its total outward investment.

But this investment slowed sharply in the second half of last year on the back of the trade war and a “debt trap” backlash from some developing countries, including Sri Lanka, Pakistan and Malaysia, according to the report by Maybank.

While geopolitical conditions have not improved much this year, the analysts noted a jump in Chinese investments in the region.

Chinese investment and construction contracts in Southeast Asia nearly doubled to $11 billion in the first half of this year, from $5.6 billion in the second half of last year.

“Asean will likely see a stronger recovery in China’s BRI flows, as other regions push back against China investments,” the analysts added.

The new BRI contracts for the past six months are largely in Cambodia, Indonesia, Singapore and Vietnam, and primarily for transport and energy projects.

No recovery for Malaysia

In contrast, Malaysia, which used to attract the largest BRI flows, has not seen a recovery. Still, it remains the largest recipient of cumulative BRI contracts since 2013, followed by Indonesia and Singapore.

The report noted that Malaysia’s new government recently re-negotiated and revived the East Coast Rail Link and Bandar Malaysia projects, which may restart investment flows.

The Sino-US trade war is also fuelling the flow of Chinese investments into Southeast Asia as firms move parts of their supply chains to the region to circumvent the higher US tariffs.

Maybank analysts say the beneficiaries appear to be Vietnam, Thailand and Malaysia.

Total newly registered foreign direct investment from both China and Hong Kong into Vietnam surged by 200 per cent in the first seven months of this year.

Notably, GoerTek, one of Apple’s main contract manufacturers, has invested $260 million to set up a plant in Vietnam to make the popular AirPods wireless earbuds.

Tech and the digital economy form another area that is drawing Chinese money into the region, said the Maybank report.

China Global Investment Tracker noted that Chinese investment in Southeast Asia’s tech sector hit $2.5 billion in the first half of this year, surpassing the amount for the whole of 2017.

Maybank analysts expect more of China’s tech money will be diverted into Asean, given US moves to raise barriers and increase scrutiny of Chinese tech investment. They noted that China’s venture capital investment in Asean start-ups rose more than fourfold to $667 million in the first half of this year.

And the biggest Chinese venture capital firms such as Qiming Ventures and CGV Capital – backed by Alibaba, Xiaomi and Meituan-Dianping – are also opening offices in Singapore.

The development and roll-out of 5G mobile networks in Southeast Asia will also see Chinese investments flowing into the region, as Asean is generally staying neutral and open to using Chinese telecoms equipment giant Huawei’s technologies, the analysts added.

MOST VIEWED

  • Wing Bank opens new branch in front of Orkide The Royal along Street 2004

    Wing Bank celebrates first anniversary as commercial bank with launch of brand-new branch. One year since officially launching with a commercial banking licence, Wing Bank on March 14 launched a new branch in front of Orkide The Royal along Street 2004. The launch was presided over by

  • Girl from Stung Meanchey dump now college grad living in Australia

    After finishing her foundational studies at Trinity College and earning a Bachelor’s degree from the University of Melbourne in 2022, Ron Sophy, a girl who once lived at the Stung Meanchey garbage dump and scavenged for things to sell, is now working at a private

  • Ministry orders all schools, public and private, to close for SEA Games

    From April 20 to May 18, all public and private educational institutions will be closed to maintain order and support Cambodia's hosting of the 32nd SEA Games and 12th ASEAN Para Games, said a directive from the Ministry of Education, Youth and Sport. Cambodia will host the

  • Wat Phnom hornbills attract tourists, locals

    Thanks to the arrival of a friendly flock of great hornbills, Hour Rithy, a former aviculturist – or raiser of birds – in Kratie province turned Phnom Penh tuk tuk driver, has seen a partial return to his former profession. He has become something of a guide

  • Almost 9K tourists see equinox sunrise at Angkor Wat

    Nearly 9,000 visitors – including 2,226 international tourists – gathered at Angkor Wat on March 21 to view the spring equinox sunrise, according to a senior official of the Siem Reap provinical tourism department. Ngov Seng Kak, director of the department, said a total of 8,726 people visited Angkor Wat to

  • Angkor Beer strengthens national pride with golden new look and fresher taste

    Angkor Beer – the "Gold of Angkor" – has a new look, one that is more stylish and carries a premium appeal, as well as a fresher taste and smoother flavour, making it the perfect choice for any gathering. Angkor Beer recently launched its new design, one