China and ASEAN enterprises are traveling in both directions

Recently, a business outlook survey report released by Dahua Bank (China) Co., Ltd. (Dahua Bank China) showed that China's enthusiasm for "going global" and "bringing in" ASEAN enterprises is not decreasing, and China's economic and trade cooperation with ASEAN is "crossing" into the future. Among them, over 40% of Chinese companies plan to expand to Southeast Asia in the next three years, and 40% of ASEAN surveyed companies hope to expand their business in mainland China.

The heat of investment exchanges between China and ASEAN continues to increase

The Regional Comprehensive Economic Partnership Agreement (RCEP) came into effect in 2022, injecting new vitality into cross-border trade and further deepening mutually beneficial cooperation between China and ASEAN. In the first four months of 2023, ASEAN continued to remain China's largest trading partner, with a year-on-year growth of 13.9% in bilateral trade value, accounting for 15.7% of China's total foreign trade value.

The report points out that in 2023, Chinese companies' enthusiasm for going abroad will not decrease, with over 90% of surveyed Chinese companies having strong overseas expansion needs. The main driving force for their overseas expansion is to improve profitability and revenue, as well as enhance international reputation. ASEAN continues to become a highly favored market for Chinese companies, with over 40% of Chinese companies planning to expand into Southeast Asia in the next three years. The top three investment destination countries are Сингапур, Таиланд, и Малайзия.

At the same time, ASEAN enterprises are also actively expanding into the Chinese market. According to the report, 40% of ASEAN surveyed companies hope to expand their business in mainland China, including 46% of wholesale trade enterprises and 45% of manufacturing and engineering enterprises. Companies from Thailand (52%) and Singapore (46%) have the strongest willingness to invest in the mainland Chinese market.

Zheng Jun, Vice President and Head of Wholesale Banking at Dahua Bank in China, said, "With the official implementation of RCEP, China and ASEAN have further strengthened trade and industrial chain cooperation, and the enthusiasm for investment exchanges between the two sides continues to increase

Ninety percent of Chinese companies are very optimistic about the development prospects in 2023

The report also shows that as China fully recovers and "struggles with the economy," Chinese companies interviewed have stated that they will implement a series of plans to fully promote business growth. The main measures include digitizing business, diversifying supply chain, expanding new customer base, improving employee skills, or reducing costs.

Research shows that 90% of Chinese companies are very optimistic about the development prospects in 2023 and believe that their business will improve.

It is worth mentioning that although Chinese companies have a positive attitude towards their future development prospects, they still face two major challenges: global high inflation and diversified supply chain demand. Among them, 89% of Chinese companies surveyed reported being affected by high inflation, while 30% felt that the impact of inflation was severe. The impact of inflation on companies includes increased operating costs, increased raw material costs, reduced profits, and increased equipment/machine costs.

The main challenges faced by enterprises in building a diversified supply chain are procurement difficulties, rising supply costs, and timely supply and stocking requirements. The interviewed Chinese companies are also actively responding by establishing stronger supplier relationships, digitizing supply chain management, and reserving raw materials in advance to ensure the stability of the supply chain.

At the same time, as China's economy moves towards high-quality and sustainable development, enterprises also attach great importance to sustainable transformation. The report indicates that almost all surveyed Chinese companies indicate that sustainable development is important or crucial to them, but only nearly half of the surveyed companies have implemented sustainable development measures. One of the main obstacles that constrain enterprises from implementing sustainable development measures is the ability to obtain sustainable financing.