China finds S-E Asia’s allure irresistable as investment soars

MANILA: Dominated by Japanese investment since the 1980s, Southeast Asia has found a new source of funds in China.

Chinese companies poured a record US$14.6 billion (RM62.6 billion) of foreign direct investment into Southeast Asia in 2015, almost double from the previous year and a gargantuan leap from US$156 million a decade ago, according to Maybank Kim Eng Holdings Ltd.

They are also diversifying from manufacturing, mining and agriculture into financial and commercial services, such as advertising and travel.

China is rapidly accumulating foreign assets as it transforms into a global power.

China is turning its eye to Southeast Asia in part to source cheaper manufacturing and partly through President Xi Jinping’s plans to recreate the ancient Silk Road trading routes between Asia and Europe.

Xi pledged 540 billion yuan (RM338.6 billion) in financing and encouraged state-run banks to contribute another 300 billion yuan in overseas capital to support his Belt and Road initiative.

Citigroup Inc research shows Chinese investment into the five largest Southeast Asian nations — Singapore, Malaysia, Thailand, Indonesia and the Philippines — climbed to US$13.5 billion last year, exceeding flows from Japan for the first time. Bloomberg