What a globalising China means for ASEAN: Two-way benefits on the rise


A new report from HSBC Global Research outlines the following:

  • Trade between China and ASEAN reached USD358bn in 2013, up from only USD37bn in 2000
  • Rising levels of investment in both directions represent the next phase in the relationship
  • This benefits a number of sectors – especially banking, manufacturing and real estate – and is also having an impact on how equities behave across the region

Key numbers

– ASEAN combined would be the seventh largest economy and the third most populous country globally, with a combined GDP of USD2.4trn in 2013 and a population of 600m.
– Since 2002, the tariffs for more than 90% of the goods in the ASEAN-China Free Trade Area have been reduced to close to zero.
– About 12% of ASEAN’s exports went to China in 2013, up from 6.5% in 2003; more than 16% of ASEAN’s imported goods came from China in 2013, up from less than 8.5% in 2003.
– China has been ASEAN’s largest trading partner since 2009, while ASEAN has been China’s third largest trading partner since 2010.
– Bilateral trade between China and ASEAN surpassed USD358bn in 2013, up from only USD37bn in 2000.
– Around 25% of China’s coal imports originate from Indonesia, more than from any other country.
– Annual growth of cumulative FDI from China to ASEAN averaged 54% over 2003-12. The numbers for Singapore, Laos and Myanmar were 62%, 81% and 89%, respectively.
– ADB’s Regional Investment Framework in the Greater Mekong Subregion has about USD51.5bn of projects in its pipeline.
– China’s Exim Bank has lent more money than the World Bank to developing countries. It has provided credit support to build or renovate 24 highways, 3 railways, 1 port, 3 airports and 9 bridges in the Mekong region and ASEAN.
– China has proposed setting up an Asia Infrastructure Fund, resembling the ADB in form and function, with up to USD100bn in start-up capital.
– Investments are led by Chinese state-owned enterprises (SOEs), at more than 80% of flows so far.
– China Railway Group (CRG) is planning a USD9.6bn project which could be the largest ever FDI in Cambodia. CRG’s USD4.8bn Indonesia coal railway project is the largest single Chinese FDI initiative in ASEAN.
– Chinese investment group Bright Ruby set a record for a private-sector property transaction in Singapore by purchasing Park Hotel Group for USD1.2bn in 2013.
– Thailand’s Charoen Pokphand (CP), one of China’s first foreign investors, now has more than 200 subsidiaries in food processing, retailing, and other businesses.
– ICBC Singapore branch has opened accounts for several central banks in the region to facilitate depositing RMB converted from US dollar reserves.
– RMB60bn in foreign exchange trading and RMB150bn in cross-border RMB settlements were conducted with ICBC Singapore Branch in 2013.

The report was written by Herald van der Linde, Head of Equity Strategy, Asia-Pacific, Trinh Nguyen, Asian Economist and Qu Hongbin, Co-Head of Asian Economic Research 經濟研究亞太區聯席主管 屈宏斌.

Most recent episodes

Audio TMI - ESG: Time to Decide

The pressure to comply with ESG initiatives is being felt by corporates like never before, with ESG-compliance a common concern among treasury departments. TMI talks to Lavinia Bauerochse (Deutsche Bank) about treasury’s ...


Embedded Finance: A 101 Guide for Treasurers

Our latest TreasuryCast guest, Aman Narain (HSBC) sits down with TMI's Eleanor Hill to consider the ways in which treasury might be impacted by embedded finance. In this podcast, Aman explains the differences between embedded finance and BaaS, shares his hopes for the future in this space, and provides...


Audio TMI - A Modern, Agile, and Efficient Machine

UniCredit's Raphael Barisaac and Massimo Ortino explain how the fir...

What’s on the Horizon for Short-term Investments?

The treasury community has risen to the ongoing challenge of rising interest rates and inflation, with corporate cash serving as the sought-after safety net. Here, Daniel Farrell (Northern Trust Asset Management) and Karl Adams (ICD) consider how the latest MMF reform proposals affect short-term...


Transitioning a Corporate from LIBOR to CME Term SOFR

The loans market has predominantly moved to forward looking term rates, and both corporate borrowers and global lenders are increasingly turning to CME Term SOFR as the forward looking risk-free benchmarks to support their activities. Listen to this podcast, featuring Gavin Lee, Marco Bianchi (CME...


HSBC’s Sibos Spotlight – View from Sibos

TMI's Eleanor Hill invites Neil Atkinson, Nadine Lagarmitte, and Vinay Mendonca (HSBC) to discuss the critical treasury topics and conversations highlighted at this year's Sibos conference in Amsterdam. Amongst a wealth of market insights, our guests consider the most critical developments emerging from...


ECB’s Targeted TLTRO Tweaks Set to Drain Excess Market Liquidity

Welcome to the latest edition of Liquidity Link Live, your exclusive market analysis provided by Northern Trust Asset Management, one of the world’s largest cash managers. Tune in each month to discover the very latest insights on the UK, Eurozone and US markets. This edition was recorded on the 7th...


Asian Treasury Trends: Learnings and Opportunities

Former corporate treasury professional, Valerie Heng (Deloitte) joins Eleanor Hill to discuss the hot topic of treasury transformation, alongside other key shifts treasurers should be aware of. In this podcast, Valerie uses her knowledge of the Asian Treasury market to explain how the role of the...


Collaborative Trade Finance: How to Unlock Liquidity at Speed

Imagine if trade finance applications were fully collaborative and corporates could communicate with every trade participant via an open digital hub.  In this podcast, Vincent Almering (Interfood Holding B.V.) and Enno-Burghard Weitzel (Surecomp) explain to TMI's Ben Poole how collaborative trade...