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Southeast Asian firms eyeing collaboration with China

2023-12-06 HKT 17:38
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  • Southeast Asian firms eyeing collaboration with China
Digitalisation, advancements in financial technology, cross-border banking and commerce, as well as smart construction are among the potential expansion agendas of Southeast Asian firms operating or planning to operate in Hong Kong as they eye new opportunities in China.

On a visit to the Greater Bay Area, a delegation of companies from Belt and Road countries visited Shenzhen and Guangzhou on Monday and Tuesday, touring leading tech and auto giants such as Huawei, Tencent and BYD.

The delegation was led by Secretary for Commerce and Economic Development Algernon Yau.

Participants described the trip as an “eye-opening” experience, highlighting significant improvements in business efficiency and technological advancements in areas such as facial recognition, digital payments, deliveries, as well as “smart city” concepts.

“We have seen in the past, people just want to open factories in China, but now it's eye opening to see the emergence of new industrialisation, modern technology companies. We are not only talking about telecommunications. We are talking about those high-tech firms on both financial digitalisation and even for climate change,” said Sitthichai Jiwattanakul, general manager of the regional lender Bangkok Bank.

Pointing to more fierce competition in the banking field, Sitthichai said it’s essential for banks to pivot towards digitisation, or risk lagging behind.

“All areas such as digitalisation and technologies... Thailand is looking forward to [advancing] in these areas. And they want to come here. They [also] want to collaborate with Chinese companies on cloud services. We are looking for the backbone of the new business era,” he said.

He added that Bangkok Bank hopes to link more Southeast Asian investors to the Greater China area through its branches in Hong Kong and the mainland, while enhancing its cross-border financing and remittance payments services for corporations in the area.

Meanwhile, Rachel Lau, managing partner at RHL Ventures – a Malaysian multi-family private investment firm focusing on investing in small and medium innovation and tech firms – said she hopes to collaborate with mainland companies in transferring advanced technology to Southeast Asian countries.

“We are heavily invested in chips, hardware semiconductors, and Malaysia as well as Southeast Asia have been a big supporter of the US and China semiconductor industry,” Lau noted, adding that she believes there could be more collaboration with Chinese investors or companies on fabrications and metal positions value chains.

Lau also said that despite global economic uncertainties, Southeast Asian economies have shown resilience, with about 8 to 9 percent annual growth across the region.

“Southeast Asia is a relatively strong region. Right now we see a lot more opportunities and capital flowing. Obviously, Southeast Asia has also benefited from the US-China trade wars. A lot of companies are diversifying out in terms of whether it's a supply chain, capital, in terms of facilities. People are starting to move it over to Southeast Asia as a diversification tool. And we see that continuing in a very strong way,” she added.

Lau said she believes Hong Kong, with its advantages such as free capital flows and a common law system, could serve as a gateway for businesses to enter the China market, and the firm has been negotiating with the Belt and Road Office to set up an office in the city.

Cyrus Pun, alternate director of Myanmar corporation Yoma Strategic Holdings which focuses on real estate development, said the firm will seize potential opportunities in China.

Pun said demand for real estate was high in Myanmar thanks to higher disposable income for the middle class, which also contributed to the growth in the consumer market.

And there's room for expansion.

“I think e-commerce was what was driving that investment decision as well. So we all see great potential for e-commerce to expand in Myanmar. In fact, if you talk to people on the ground in Myanmar, there are a lot of people buying on the Chinese platforms, whether that is Taobao or PDD, but a lot of buying systems and infrastructure are not quite there,” Pun said.

"Myanmar entrepreneurs are very creative and resourceful. There are many small enterprises that try to enable that by being the mediums to facilitate those trades. But it's done on a small scale. Because of that, I think going forward, there's got to be a convergence of different parts of that value chain to be able to expand that business.”

Southeast Asian firms eyeing collaboration with China