Speeding up industrial chain supply chain integration China and ASEAN two-way investment surge

Under the epidemic, two-way investment between China and ASEAN not only did not see a cooling, but became more and more hot.

According to Chinese statistics, from January to April this year, China’s direct investment in non-financial sectors in ASEAN reached US$3.94 billion, a year-on-year increase of 43.3%, which was more than three times the growth rate of China’s investment in 53 countries along the “Belt and Road”; As a result, ASEAN’s actual investment in China increased by 13% year-on-year. In the first four months, China’s actual use of foreign capital has shrunk by 6.1%, which is quite impressive.

The rapid increase in two-way investment between China and ASEAN is attributable to the fact that the upgraded version of the China-ASEAN Free Trade Area takes effect, and on the other hand, it is also related to the characteristics of the epidemic on both sides. The spread of the epidemic in China has been basically blocked, and the overall ASEAN epidemic is relatively light, which provides conditions for the rational flow of personnel and two-way investment.

In an interview with reporters, Beijing scholars believe that the current global industrial chain supply chain pattern is undergoing profound changes due to the epidemic. In order to maintain the security of their own industrial chain supply chain, some countries and multinational companies will tend to concentrate the industrial chain and supply chain to regional, bilateral or domestic, and a small-scale "self-reliance" situation may become the norm. Under such circumstances, China and ASEAN need to further strengthen investment cooperation to jointly maintain the safety and stability of the industrial chain supply chain.

Zhang Jianping, director of the Regional Economic Cooperation Center of the International Trade and Economic Cooperation Research Institute of the Ministry of Commerce of China, said that the epidemic exposed the risks behind the excessively small and long supply chain of the global industrial chain, and the demand for regional economic integration in Asia was therefore more urgent. China should step up efforts to promote the signing of the Regional Comprehensive Economic Partnership Agreement (RCEP) within this year, to help China and ASEAN two-way investment to a higher level.

Zhang Yansheng, chief researcher of the China International Economic Exchange Center, also said that under the epidemic situation, the European and American economies have struggled to restart and the market demand has been greatly reduced. It is of great significance for China and ASEAN to strengthen the integration of the industrial chain supply chain to deal with the impact of the epidemic. Both sides should take the opportunity to expand the production network and build a new industrial chain and industrial cluster.

The signal that the two sides will further strengthen cooperation has emerged. China and ASEAN issued a joint statement a few days ago, promising to keep the market open, eliminate unnecessary trade restrictions, and create a favorable trade and investment environment.

Chinese State Councilor and Minister of Foreign Affairs Wang Yi said during the two sessions of the country that it will promote "one step further" in relations with ASEAN, strengthen the "Belt and Road" initiative and ASEAN interconnection planning, and expand emerging areas such as smart cities, artificial intelligence, e-commerce, etc. Cooperation.

According to official data, about half of China's direct investment stocks in ASEAN are concentrated in Singapore, followed by Indonesia, Malaysia and other countries. From the perspective of industry distribution, manufacturing is China's largest investment in ASEAN, accounting for more than 20%. From the perspective of the value chain distribution of investment, direct investment by Chinese companies in ASEAN is mainly sales and other services and processing and manufacturing, both of which account for more than 80%, while R&D investment only accounts for a small proportion.

Analysts believe that China's future investment in ASEAN countries should be tailored to local conditions. For Singapore, consider knowledge-intensive and technology-oriented investments; for Indonesia, Thailand, and Malaysia, market-oriented investments should be used, and greenfield investment, cross-border M&A, etc. should be used to enter the ASEAN market; for Vietnam, Cambodia, and other countries Carry out capacity transfer investment to help these countries achieve industrialization.

Zhu Zhaoyi, a researcher at the International Economics Research Institute of the University of International Business and Economics, said that with the combination of China's capital and brand advantages and the comparative advantages of labor force and raw materials in ASEAN countries, the in-depth integration of China and ASEAN regional industrial chain will drive the growth of bilateral trade volume and promote both sides. Economic and trade cooperation reached a new level.