Chinese companies with an appetite for the Asean region are favouring Malaysia in their expansion plans, according to a pulse survey commissioned by Standard Chartered on growth opportunities in the China-Asean corridor.
Most are also planning to increase their investments in the Asean region significantly, especially in the medium term. But many are conscious of the risks posed by the pandemic, geopolitical uncertainty and trade conflicts, and a tepid rebound.
Adapting Chinese business models to local contexts will also be a key challenge, that may require partnerships with Asean actors.
Senior executives at 43 China-based companies with a focus on Asean were polled for the survey, of which nearly two-thirds (65 per cent) said they thought Malaysia offered their companies the best opportunities to capture sales and production opportunities.
Singapore ranked second (60 per cent), and Thailand third (53 per cent). The Philippines (44 per cent) and Indonesia (37 per cent) came next, while Vietnam trailed at only 30 per cent.
Singapore and Malaysia have typically been considered as hubs for Chinese investments, noted the report by Standard Chartered, which was released on Thursday. Nearly half of respondents (47 per cent) are keen to tap Singapore as a major regional procurement hub, and a regional research & development and innovation centre (44 per cent).
More than 60 per cent of those surveyed are looking to expand their sales and production in the region by over 10 per cent, over the next 12 months. Over half said they were driven by access to the large and growing Asean consumer market, local government incentives and support, and a reliable supplier base.
This article originally appeared on The Business Times. You can view the original article here: https://www.businesstimes.com.sg/asean-business/chinese-companies-look-to-malaysia-for-expansion-plans-standard-chartered
28 May 2021