China looking to improve trade with ASEAN neighbours

Chinese companies and their counterparts in the ASEAN bloc (Association of Southeast Asian Nations) are exploring business opportunities in each other’s markets, propelled by the Regional Comprehensive Economic Partnership pact coming into effect.

A report by United Overseas Bank (China) found that South-east Asia and the Hong Kong Special Administrative Region tied as the top overseas investment destinations among the companies it surveyed.

The bank polled 588 top executives or decision-makers of Chinese mainland companies with an annual sales revenue of 100 million yuan (£11.5 million) to 4 billion yuan or higher.

The Americas ranked third among the companies surveyed, followed by North Asia and Europe.

The bank found that more than 40% of the companies planned to expand their operations in South-east Asia over the next three years. Singapore, Thailand and Malaysia were the top three investment destinations for Chinese companies, the survey showed.

Hotel and property, construction/infrastructure and consumer goods were the three sectors that companies on the mainland were most interested in overseas.

Adaline Zheng, alternative CEO and head of wholesale banking for UOB China, said South-east Asian markets were showing stronger demand for these sectors as they are still at a relatively earlier development stage. Meanwhile, China has taken the lead worldwide in these industries.

The poll found that about 40% of companies in the ASEAN region wished to expand their businesses in the Chinese mainland. Some 46% of wholesale companies and 45% of construction and engineering firms from ASEAN economies expressed an interest in such plans.

Companies from Thailand and Singapore were the most positive about in investing in the Chinese mainland market, according to the UOB report.

The bank’s findings support data from China’s General Administration of Customs in early May that showed that ASEAN continued to be China’s biggest trade partner during the first four months of the year, accounting for 15.7% of the country’s total foreign trade value. The value of bilateral trade jumped 13.9% year-on-year to 2.09 trillion yuan by the end of April.

The survey found that market sentiment is generally upbeat, with 94% of the interviewed company bosses believing the business environment is sound. On forecasts for their companies’ performance for 2023, 92% of them held a positive attitude.

Despite the general optimism, companies should address two major challenges — of soaring inflation globally and diversified demand in the supply chain, said Jimmy Koh, managing director for group strategic communications and brand department at UOB.

Although inflation is expected to be lower in the next six months to two years, 89% of the surveyed Chinese mainland companies said they would remain affected, especially by rising cost of operations and raw materials, according to UOB.

• The ASEAN countries are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.

 

Number of new self-employed businesses grows 14.3% in Q1

A total of 5.03 million self-employed businesses were set up in China in the first quarter of 2023, up 14.3% year-on-year, official data has shown.

That compares to 3.24 million during the same period of 2019, according to data from the country’s State Administration for Market Regulation.

As of the end of the first quarter, the country’s registered self-employed businesses had reached 116 million, accounting for two-thirds of China’s total business entities.

The main areas of growth in the number of self-employed businesses were culture, sports and entertainment (up 39% year-on-year); transportation, warehousing and postal services (up 25.1%); accommodation and catering (up 19.8%); and wholesale and retail (up 10.4%).

A report on the China Daily website commented: “With the development of new technologies, industries and business modes, new self-employed businesses such as livestreaming and individual business running via WeChat have appeared and injected new vitality for China’s economic transition.

“After Covid, self-employed businesses recovered quickly, playing an important role in facilitating people’s lives and smoothing economic micro-cycles, the administration said, adding that it will take effective measures to promote the high-quality development of individual businesses.”