CHINA’S OUTBOUND INVESTMENT IN ASEAN ECONOMIES IN THREE PERIODS: CHANGING PATTERNS AND TRENDS

Abstract

Southeast Asian economic sentiments toward China tend to dither between competitive and cooperative instincts. Initial warmth among the Association of Southeast Asian Nations (ASEAN) members toward the China-led Belt and Road Initiative (BRI) is slowly giving way to project-related concerns as well as fears that “China is buying the world”. This paper examines Chinese outward foreign direct investment (OFDI) in global and ASEAN contexts shortly after the start of the country’s “going out” strategy. The analysis draws on country- and firm-level investment data. It shows that a handful of ASEAN economies have become more important to Chinese investors as their motivations, capabilities and needs evolve. Nonetheless, with the exception of three (Cambodia, Laos and Myanmar), ASEAN economies have not become “reliant” on Chinese investment post-BRI launch, once one considers the increased weight China carries as a foreign investor in the developing world. This is either because these countries generally do not rely on FDI, or because traditional foreign investors from industrialized economies and more advanced ASEAN member states are far more entrenched than Chinese investors in the host economies.