Editorial | USA - China, in the South-East the challenge is (also) digital

It is not only geopolitics, in the ASEAN region the giants of Washington and Beijing compete for a fast-growing market

Editorial by Lorenzo Lamperti, Editorial Coordinator Associazione Italia-ASEAN

South China Sea, diplomatic relations, strategy and geopolitics. All true, but the rivalry between the US and China in South-East Asia also concerns purely economic issues. In particular, the competition between the technological giants of the two countries. Yes, because the digital market in the ASEAN area is experiencing a very strong growth, made even more impressive and rapid by the Covid-19 pandemic. It is not a coincidence that a bit all the big companies are investing in the area: Amazon, Facebook, Google and Microsoft on one side, Alibaba and Tencent on the other. For example, as Nikkei Asian Review underlined, on cloud computing: Singapore is one of the main headquarters of data centres at world level. Mark Zuckerberg’s company is building one, its first in Asia, from 170 thousand square meters in the city-state making about billion dollars of investment.

It is not the only case. Amazon will open a new center in Jakarta by early 2022. Microsoft has announced the opening of two plants, in Indonesia and Malaysia. Chinese actors don’t just stand by and watch. Alibaba already has three data centers active in Indonesia and by the end of the year it will open one in the Philippines. The company founded by Jack Ma also announced investments of over USD 1 billion over the next three years in Asia-Pacific startups. Tencent has also taken root in the South-East, with offices spread across several countries of the region. On the other hand, the growth prospects are considerable: 650 million people and a constant increase in the penetration of connection and digital devices. An unparalleled trajectory in the world that offers a wide range of opportunities for e-commerce, fintech and online entertainment. It is therefore no coincidence that there is strong competition to win the trust of the local middle class.

However, the South-East is not just a battleground between the US and Chinese technological giants. Local realities are emerging on a regional scale and are attracting the attention of international realities. For example, Singapore Grab’s super app benefits from Amazon andMicrosoft’s cloud services. Alibaba and Amazon are competing for the supply of services to the Indonesian Tokopedia.