No decoupling between Southeast and China

Despite political tensions, no one wants to do without trade relations with Beijing

By Tommaso Magrini

A new survey released by HSBC showed that nearly half, 45 percent to be precise, of Southeast Asian companies plan to expand their supply chain to China in the next 12 months. Ninety-two percent of Indonesian companies expressed interest in expanding their supplier network in China in the next three years, a figure slightly higher than 89 percent of Vietnamese companies and 87 percent of Philippine companies. 

The survey results were released in conjunction with the China International Import Expo (CIIE) in Shanghai, which was attended by large delegations from Southeast Asian countries but also the largest U.S. shipment since the event's launch. This sixth edition of the survey was the first to be conducted since the lifting of Covid-19 restrictions in China in January this year, with the participation of more than 3,300 companies from 16 countries including the United States, South Korea, Canada, the United Kingdom, France and Germany. Overall, about three-quarters (73 percent) of respondents expect to increase their supply chain footprint in China in the next three years, and about 25 percent indicate that the increase will be "significant." HSBC said the survey results suggest that many of China's long-standing fundamentals, including its deeply integrated supply chain networks, continue to attract international companies. China's imports and exports to ASEAN reached 6.52 trillion yuan ($970 billion) in 2022, a significant 15 percent increase. Of these, exports accounted for 3.79 trillion yuan, an increase of 21.7 percent, and imports 2.73 trillion yuan, an increase of 6.8 percent. The data show that China's cumulative investment in South Asia reached nearly $15 billion.